Big corporations will use multiple tactics to exploit patents to limit competition

[Ryan Cooper, 6-6-23, Prospect managing editor and The Week national correspondent, The American Prospect, “How Big Pharma Rigged the Patent System,” , accessed: 07-07-24, ES]

Another strategy is to “make slight modifications to the drug,” Robin Feldman, a professor at UC College of the Law, San Francisco, who studies patent abuses, told the Prospect in an interview. By making small changes to dosages, formulation, method of administration, and so forth, drug companies can then apply for a new patent or a patent extension and extend their monopoly. According to her research, “more than 78 percent of new patents are not new drugs,” she said. One common tactic is to strategically produce an extended-release form of the drug right before the original patent is about to expire, because the companies can then receive an additional three-year exclusivity right under “new clinical investigation” rules.

A lot of these patents are probably bunk even by the lax standards of U.S. law. On the rare occasion when generics manufacturers have taken Big Pharma to court to contest patent validity, they have won about three-quarters of the time, Feldman said. But again, that costs time and money—something the major drug companies are counting on.

Yet another strategy is to obtain non-patent exclusivities. The government grants companies that do certain kinds of research, like treatments for pediatric or tropical diseases, or develop “orphan” drugs to treat rare conditions, additional time-limited rights, like keeping their data private or a monopoly on marketing. (Congress wanted more attention paid to these particular disease areas, but it may have succeeded too well, as companies have piled on resources to develop treatments for relatively uncommon conditions that are often not very effective.)

Finally, there is the “pay for delay” tactic. When patents or other legal protections are about to expire, drug companies commonly take their enormous profits and offer generics manufacturers hefty bribes to stay out of the market, thus preventing competition. The Federal Trade Commission, which has filed some lawsuits against this practice, estimates that this tactic alone costs the country $3.5 billion in higher drug costs every year.