[Ip-health] Pharma’s secret weapon to keep drug prices high

Tahir Amin tahir at i-mak.org
Wed Jun 15 07:49:57 PDT 2016


By Priti Radhakrishnan

June 14, 2016

Skyrocketing drug prices are forcing states to take unprecedented measures
to rein in health care spending. Vermont
just became the nation’s first state <http://governor.vermont.gov/node/2784>
to require prescription drug pricing transparency. The New York
and Massachusetts
attorneys general have launched investigations into major pharmaceutical
companies’ and insurers’ drug pricing policies and strategies.

These are important steps. But they ignore a key driver of the problem:
secondary patents. Familiar to only a few people inside the insular world
of intellectual property law, secondary patents work like this: Companies
file for additional, defensive patents to thicken the protection around
their original base patents. These additional patents rarely represent
anything new in terms of science. Instead, their purpose is to prolong a
company’s monopoly and, along with that, its ability to charge high prices
for its drugs. Some drugs have dozens of secondary patents. Abbott Labs,
for example, has over 108 patents on its HIV drug Kaletra.
Take the case of Sovaldi
a treatment for hepatitis C developed by Gilead Sciences. In the United
States, Gilead prices Sovaldi at up to $1,000 a pill, or about $84,000 for
a complete course of treatment. This pricing strategy helped Gilead clear
$18 billion in profits last year, while taxpayer-funded Medicaid programs,
state health programs, and patients have trouble affording this
astronomically priced drug.

Sovaldi is comprised of a base compound — sofosbuvir — for which the pharma
giant has filed three patents. On top of that, Gilead has pursued an
additional 24 patents, with more likely to come.

My organization, the Initiative for Medicines, Access & Knowledge
<http://www.i-mak.org/> (I-MAK), aims to ensure that people with hepatitis
C and HIV around the world get the medicines they need to survive and lead
healthy lives. We have evaluated Gilead’s patent portfolio and found that,
based on US and international patent law, Gilead does not deserve any of
its 27 patents for Sovaldi. Both the base and secondary patents for the
drug are based on old science and commonly known techniques. Yet because of
its defensive patenting strategy, Gilead will maintain an iron lock on its
market share and charge exorbitantly high prices to Americans with
hepatitis C until well into the 2030s.

Harvoni <https://www.statnews.com/2016/03/08/harvoni-hepatitisc-ads/>,
another medication that treats hepatitis C, combines sofosbuvir and a drug
called ledipasvir. Currently, Harvoni has 27 secondary patents. If these
were removed, people in the US could access far cheaper versions of the
same drug as soon as 10 years earlier. Based on I-MAK’s conservative
estimates, this could open access to treatment for millions of people in
the US, saving patients and payers like Medicare and Medicaid $5 billion
over an eight-year period. In the US, Harvoni is priced at $94,000 for a
course of treatment. In middle-income, high-population countries like
Argentina, Brazil, and China, people are forced to pay thousands of dollars
for sofosbuvir. Stripping away unmerited patents would reduce drug costs
and increase access for millions of people in the US and around the world.

Pharmaceutical companies love to claim that winnowing their armada of
patents would be a disincentive to innovation and would limit research into
new drugs. Don’t believe it. The industry devotes shockingly little funding
to research and development. Companies spend roughly one-third of their
revenues on marketing <http://www.who.int/trade/glossary/story073/en/> and
only half as much on research and development, while spending big on armies
of lawyers to devise and defend secondary patents and other so-called “life
cycle management” strategies. Drug research funding has been declining
for more than a decade, while strategies of secondary patenting have
steadily increased.

We support patents — just not those that are unmerited and that unjustly
prolong companies’ market power and prevent legitimate competition.

It’s time to reevaluate and modernize the current standards for awarding
all patents, but especially secondary patents. In the 10 years since we
founded I-MAK, we have won multiple cases challenging secondary and other
unmerited patents. This has helped government health programs and patients
around the world access cheaper medicines and live better. As a result of
public-interest intervention, China, Ukraine, and Egypt have already
knocked down secondary patents for Sovaldi.

By ensuring that patents are fairly awarded, governments can ensure that
medicines are affordable and available to those who need them. This is
especially important in the US, which is the only OECD nation
with no government regulations on drug pricing.

Our patent system should reward only true inventions in science and
medicine. In the face of public health epidemics and out-of-control drug
pricing, we need a patent system that achieves a better balance between the
interests of corporations and the public.

*Priti Radhakrishnan is cofounder and director of the Initiative for
Medicines, Access & Knowledge (I-MAK), a US-based nonprofit group of
scientists and lawyers working globally to get people lifesaving medicines.
Before founding I-MAK, she worked as a health attorney in the US,
Switzerland, and India.*

Priti Radhakrishnan can be reached at priti at i-mak.org

Tahir Amin
Co-Founder and Director of Intellectual Property
Initiative for Medicines, Access & Knowledge (I-MAK)
*Website:* www.i-mak.org
*Email:* tahir at i-mak.org
*Skype: *tahirmamin
*Tel:* +1 917 455 6601/+44 771 853 9472

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