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Congress has long sought to control the cost of prescription drugs, which now exceeds $800 billion per year in the U.S. and is projected to keep rising. Part of the challenge in reducing cost is monopolies on biologics — therapeutic drugs derived from living material, which account for 50% of total drug spending. They include drugs like Humira, used to treat rheumatoid arthritis, and Skyrizi, prescribed for conditions including plaque psoriasis and Crohn’s Disease, as well as vaccines and insulin.

Analysts have long believed that drug manufacturers keep prices high on popular drugs by blocking biosimilar, or generic, products from entering the market. But to date, there’s been little data to prove this is actually going on and to evaluate the role patents play in these blocking strategies.

Until now. New patent data compiled by Michael D. Frakes and Melissa Wasserman sheds light on how drug companies may exploit the U.S. patent system to maintain exclusivity on highly profitable biological drugs far beyond the initial 20-year patent coverage.

Their database, the first comprehensive look at the patent portfolios of the 515 biologics approved by the U.S. Food and Drug Administration, provides insight that lawmakers can use to address “gaming” of the patent system.

“Congress has been working on this but they’re kind of doing so in the dark because they don't have all the patent data that we've been amassing,” Frakes said.

“There had been anecdotal sentiment, validated by some case studies, that suggests that manufacturers of these large molecule drugs are gaming the system. We really wanted to pin down, with more empirical precision, whether companies are getting a lot of patents on these large molecule drugs, and doing it in a way that is actually problematic, that falls on the gaming side.”

Their data indicates that companies have engaged in tactics such as patent “thicketing,” or filing multiple patents that may have little to do with a product’s effectiveness to deter legal challenges by competitors. Another is “evergreening,” or filing secondary patents over time to maximize a drug’s patent protection by delaying expiration of the initial 20-year term.

Most drugs don’t have a single patent on the molecule that is the active ingredient of a drug, Frakes explained. Companies also file patents on other aspects of the drug, such as its method of delivery — capsule, pill, or injection, for example — and the processes used to manufacture it. Some drugs have a patent portfolio exceeding 100 secondary patents.

“Our analysis finds suggestive evidence that firms are filing secondary biologics patents in a manner that maximizes the amount of time over which patents protect some aspect of the relevant drug,” Frakes and Wasserman write in Strategic Patenting: Evidence from the Biopharmaceutical Industry.

“Moreover, we find suggestive evidence that some of those secondary patents filed for such purposes are of more questionable legal validity."

Frakes, a professor of law and professor of economics at Duke University, and Wasserman, a law professor at the University of Texas at Austin School of Law, plan to leverage the database for further policy analysis and to simulate the effectiveness of proposals Congress is considering aimed at curbing such tactics. Those include the Affordable Prescriptions for Patients Act that would limit the number of patents a company can leverage in litigation by challengers seeking to introduce a biosimilar.

“All patenting is strategic in some sense, because the goal of the patent system is to exclude competitors,” Frakes said. “When we say strategic patenting, we mean using patents to overstay that welcome and to go too far in excluding competitors.”

Bringing transparency to patent tactics

Frakes and Wasserman have spent more than a decade studying how inefficiencies in the patent approval process allow low-quality patents to be approved, and their work is frequently cited in the debate over how to control drug costs. In that context, such inefficiencies ultimately contribute to the high cost of drugs by impeding the development and market entry of cheaper alternatives.

The U.S. spends nearly three times more than other industrialized countries on prescription drugs across all categories, according to a 2024 RAND report, and biologics are the fastest-growing sector and the highest generator of revenue in the pharmaceutical sector, Frakes said.

Small molecule drugs such as ibuprofen, penicillin, and antihistamines have simple chemical structures that are easily replicated and are widely available as low-cost generic drugs.

Biological, or large molecule, drugs are a newer class of drugs with complex molecular structures derived from living material that can’t be exactly reproduced. They can cost patients tens of thousands of dollars per year, and the exclusivity granted by patent protection can drive huge profits for manufacturers of “blockbuster” drugs like Humira.

But patent information on biologics hasn’t previously been available to either the research community or lawmakers, because while federal law mandates disclosure of patent information for small molecule drugs on the FDA’s approved list, it isn’t required for licensed biological products.

Producing the database was a formidable project requiring well over a year of work and a complementary mix of skill sets: Frakes is an economist, Wasserman a trained chemical engineer and former patent agent turned patent lawyer. In future research papers, they will delve deeper into analyzing the data to make policy recommendations.

“Our first goal was to build the database to be useful for the research community, to compile the information on large molecule drugs,” Frakes said. “Another goal was to use the database for policy analysis. Right now, the Senate is working on strategies to diminish the ability of these manufacturers to build these big patent portfolios. We wanted it to be useful for Congress.

“There are plenty of people who have communicated to us that they have really wanted this database and they’re as excited as I am.”