Driving Down Drug Prices: Why It’s Good to Challenge Bad Patents
Alex Moss | April 1, 2024
Ensuring that patents are granted only for genuinely new and useful inventions is vitally important, especially in industries like pharmaceuticals, where high drug prices can have life or death consequences. That’s why we need mechanisms like inter partes review (IPR) proceedings that make it possible to challenge wrongly granted patents before the agency that created them: the U.S. Patent and Trademark Office.
IPR proceedings, created as part of the America Invents Act of 2011, empower any individual to challenge patents that are the same or obvious modifications of things that already existed. In essence, they offer a means to eliminate patents that offer no genuine invention and, therefore, should never have been granted. Such patents unfairly hinder others from innovating and competing, which stifles the development of new products and keeps prices artificially high.
This is particularly critical in the pharmaceutical sector, where patents often serve as formidable barriers to entry for generic drug manufacturers and biosimilar producers. Indeed, IPR proceedings have been instrumental in fostering competition and driving down prices. For instance, consider a scenario where a brand-name drug company secures a patent for a minor variation in an existing medication, extending its monopoly without introducing any substantive innovation. This delays the availability of more affordable generic alternatives, thereby keeping prices elevated for patients and healthcare payers. Through IPR, researchers, patients, and generic manufacturers can challenge such patents, paving the way for generic competition and substantial price reductions.
Empirical research conducted by Charles Duan of American University’s Washington College of Law, demonstrates the tangible benefits of IPR in making essential medications more affordable and accessible. A recent study by Victor Van De Wiele, Aaron Kesselheim, and Sean Tu further validates IPR's efficacy in facilitating competition and resulting in price reductions for biologic therapeutics.
To illustrate the impact of IPR proceedings, the Public Interest Patent Law Institute (PIPLI) is releasing case studies on five medications whose prices plummeted due to successful IPR challenges. These include:
Abiraterone acetate (marketed as Zytiga), a prostate cancer drug, which saw a price drop of up to 98%.
Prasugrel (marketed as Effiant), a cardiovascular disease treatment, becoming 97% cheaper after IPR opened the door to generic competition.
Glatirimer acetate (marketed as Copaxone), a multiple sclerosis treatment, experiencing a 75% price reduction post-IPR proceedings.
Rivastigmine (marketed as Exolon patch), a dementia treatment, witnessing a 75% decrease in price following IPR.
Buprenorphine (marketed as Suboxone), an opioid addiction treatment, becoming 50% cheaper after IPR proceedings.
These case studies provide concrete examples of how IPR proceedings directly contribute to lowering drug prices, underscoring its pivotal role in addressing patent barriers and fostering a more competitive pharmaceutical landscape. Some skeptics argue that since most IPR proceedings involve patents in non-pharmaceutical sectors, their impact on drug prices is negligible, but as these case studies show, their impact on drug prices is substantial, generating price reductions of 50% to 98% for affected pharmaceuticals.
By facilitating administrative challenges to wrongly granted patents and fostering a more competitive marketplace, IPR proceedings play a pivotal role in ensuring that the benefits of innovation are equitably distributed and that patients have access to affordable, life-saving medications. Empirical research makes that crystal clear. It’s time to stop asking if IPR helps lower drug prices and start using it to its full effect more often.