DOSE OF REALITY: MERCK SURPASSES MILESTONE IN PRODUCT-HOPPING STRATEGY TO BLOCK COMPETITION, KEEP PRICES HIGH ON BLOCKBUSTER CANCER DRUG KEYTRUDA
Big Pharma Giant Closer to Further Extending Monopoly Pricing on Top Money-Making Oncology Drug After Already Delaying Competition by Years Gaming the Patent System
Big Pharma giant Merck recently surpassed a major milestone in the brand name drug maker’s latest scheme to further delay competition and maintain monopoly pricing on blockbuster cancer drug Keytruda — securing approval from the U.S. Food and Drug Administration (FDA) for a new, subcutaneous version of the drug.
As coverage from The New York Times notes, as patent exclusivity on the current version of Keytruda approaches the end of its life, already significantly extended by patent abuse, Merck is following “a well-worn playbook…by develop[ing] a new version of the drug, given as a shot under the skin,” that will “keep Keytruda revenue flowing.”
The company expects “up to 40 percent of Keytruda users” to shift to the new version of the drug, called Keytruda Qlex, according to The New York Times. “Merck’s new shot will most likely slow the adoption of cheaper copycat infusions, keeping prices higher for longer at the expense of Americans.”
Merck’s strategy is an example of product hopping, one of Big Pharma’s preferred patent abuse tactics for delaying competition from more affordable alternatives and keeping prices higher on their blockbuster drugs for longer.
“Merck is just the latest in a long line of drug companies that have introduced new versions of their medicines that allow them to keep charging high prices even as their original patents expire,” The New York Times notes. This strategy is known as “a product ‘hop,’ [where] a company rides out its monopoly on the original drug, and then, a few years before competition reaches the market, the drugmaker ‘hops’ to a new version that remains protected by patents.”
Executives from Merck have touted the new version of Keytruda as “a meaningful advance,” and Merck’s CEO even claimed that the new subcutaneous version of the drug is an “invention.” However, as the Initiative for Medicines, Access & Knowledge (I-MAK) recently explained, Keytruda Qlex is created by “combining Keytruda’s known immune PD-1 checkpoint inhibitor (pembrolizumab) with a form of the enzyme hyaluronidase… [h]yaluronidase, and variations of it, is a well-understood ingredient that companies have long used to enable subcutaneous delivery of biologic drugs.” In fact, other Big Pharma companies, including Bristol-Myers Squibb and Roche, have used it to create injectable versions of their blockbuster products as well.
So, the truth is, there is little actual innovation associated with Merck’s new version of Keytruda — the change in delivery method and its timing is about extending monopoly pricing power, keeping prices high for patients, and maximizing Merck’s profits.
Two Clear Examples of Big Pharma’s Patent Abuse Playbook: Humira & Keytruda
In addition to Merck’s Keytruda, The New York Times cites another example of Big Pharma’s use of “product hopping” in the form of AbbVie’s blockbuster autoimmune drug Humira.
While Humira finally faced its first competition in the U.S. starting in 2023, over the course of its more than 20 years on the market, AbbVie applied for more than 300 patents on Humira, securing more than half of them. 94 percent of the patents filed on Humira came after the drug was initially approved by the FDA. This strategy helped block competition for years and generated almost $200 billion for AbbVie. In 2022, the drug brought in more money for the company, $21 billion, than all 32 teams in the NFL combined, $19 billion.
AbbVie’s Humira is an example that Merck seems to be following with Keytruda.
According to research from I-MAK, Merck has filed for 129 patent applications on Keytruda – more than half of which were filed after the drug’s initial approval by the FDA. The Big Pharma company has been granted 53 patents on this one drug alone, and I-MAK estimates that Americans will spend at least $137 billion on Keytruda while the drug faces no competition due to its extended exclusivity that already totals more than eight years — without reflecting the added impact of the Big Pharma giant’s new patent strategy.
In addition to the impact of Merck’s strategy to further block competition on Keytruda, this week, the nonpartisan Congressional Budget Office (CBO) released a revised estimate on the impact of The Optimizing Research Progress Hope And New (ORPHAN) Cures Act, a Big Pharma-backed policy that will help drug manufacturers keep prices high on blockbuster brand name drugs at the expense of seniors and taxpayers. While Merck’s Keytruda was left out of CBO’s original estimate, in its revised analysis, with Keytruda included the CBO estimates that the impact of this Big Pharma-backed policy nearly doubled, from $4.9 billion to $8.8 billion. Now armed with more accurate information on the policy than when it was passed in a larger legislative package, lawmakers should repeal the Big Pharma blockbuster bailout that will help brand name drug companies keep prices high on top money-makers like Keytruda.
Read more on Merck’s product hopping playbook on Keytruda in The New York Times HERE.
Read more on the CBO’s updated analysis of the ORPHAN Cures Act with Keytruda included HERE.
Read more on Big Pharma’s patent abuse HERE.
Learn more about bipartisan, market-based solutions to hold Big Pharma accountable HERE.
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