Consider the Source

The mainstream media tends to favor an expansive view of IP (Patent, Copyright, etc.), and the New York Times tends to be the avatar of such things.

As such, I consider it remarkable, and a statement against interest when the Gray Lady puts out an article detailing how a pharmaceutical company abused the patent process to keep competing drugs off of the market.  It shows a shift in attitude at the paper:

In 2016, a blockbuster drug called Humira was poised to become a lot less valuable.

The key patent on the best-selling anti-inflammatory medication, used to treat conditions like arthritis, was expiring at the end of the year. Regulators had blessed a rival version of the drug, and more copycats were close behind. The onset of competition seemed likely to push down the medication’s $50,000-a-year list price.

Instead, the opposite happened.

Through its savvy but legal exploitation of the U.S. patent system, Humira’s manufacturer, AbbVie, blocked competitors from entering the market. For the next six years, the drug’s price kept rising. Today, Humira is the most lucrative franchise in pharmaceutical history.

Next week, the curtain is expected to come down on a monopoly that has generated $114 billion in revenue for AbbVie just since the end of 2016. The knockoff drug that regulators authorized more than six years ago, Amgen’s Amjevita, will come to market in the United States, and as many as nine more Humira competitors will follow this year from pharmaceutical giants including Pfizer. Prices are likely to tumble.

Well, at least this story has a happy ending.

What follows is a case study in, "Evergreening," where a pharmaceutical firm uses tricks in the patent process to extend the period of exclusivity so that they can continue to overcharge the rest of us.

Why would they do this?  Because they can continue to hike prices, and the list price for the drug is now $80,000.00 a year.  (Not a screw-up on the decimal there)

………

AbbVie did not invent these patent-prolonging strategies; companies like Bristol Myers Squibb and AstraZeneca have deployed similar tactics to maximize profits on drugs for the treatment of cancer, anxiety and heartburn. But AbbVie’s success with Humira stands out even in an industry adept at manipulating the U.S. intellectual-property regime.

“Humira is the poster child for many of the biggest concerns with the pharmaceutical industry,” said Rachel Sachs, a drug pricing expert at Washington University in St. Louis. “AbbVie and Humira showed other companies what it was possible to do.”

………

The hope was that biosimilars would drastically drive down the cost of pricey brand-name biologics. That is what has happened in Europe. But it has not worked out that way in the United States.

Patents are good for 20 years after an application is filed. Because they protect patent holders’ right to profit off their inventions, they are supposed to incentivize the expensive risk-taking that sometimes yields breakthrough innovations. But drug companies have turned patents into weapons to thwart competition.

AbbVie and its affiliates have applied for 311 patents, of which 165 have been granted, related to Humira, according to the Initiative for Medicines, Access and Knowledge, which tracks drug patents. A vast majority were filed after Humira was on the market.

Some of Humira’s patents covered innovations that benefited patients, like a formulation of the drug that reduced the pain from injections. But many of them simply elaborated on previous patents.

The United States Patent and Trademark Office is broken, and the IP system is broken worldwide.

Unfortunately, the dynamic is that overreaching IP regulation creates excess profits, a portion of which are given to politicians to further extend the reach of these systems, which generates yet more excess profits.

Rinse, lather, repeat.