In a significant development in the ongoing debate over U.S. drug pricing, Richard Saynor, CEO of Sandoz, a leading generic pharmaceutical company, has called on former President Donald Trump to address the issue of “lazy patent expansion” in his efforts to reduce prescription drug costs. Saynor’s remarks come as Trump seeks to implement a “most favored nation” policy, aiming to align U.S. drug prices of other nations. While supporting this initiative, Saynor emphasized the need for reform in the generics market to ensure sustainable access to affordable medications.
The Problem: Patent Thickets and Evergreening
Saynor criticized the practice of “evergreening,” where brand-name drug manufacturers file numerous patents on slight modifications of existing drugs to extend their market exclusivity. This strategy, often referred to as creating “patent thickets,” has been used to delay the entry of generic competitors, thereby maintaining high drug prices. For instance, blockbuster drugs like AbbVie’s Humira have been subject to extensive patent filings, with over 140 patents filed per top-selling drug, causing prices to remain high and limiting competition.
Impact on Generic Drug Market
Generic drugs account for approximately 90% of prescriptions in the U.S. and are significantly more affordable than their branded counterparts. However, the proliferation of patent thickets has led to shortages and limited availability of generics. Saynor highlighted that the rebate system, which involves pharmacy benefit managers, further inflates drug costs, making it more challenging for generics to compete.
Proposed Solutions
To address these issues, Saynor advocated for reinstating a six-month exclusivity period for first-to-market generics, a policy that could incentivize the development and availability of affordable alternatives. Additionally, he cautioned against proposed pharmaceutical tariffs, which could disproportionately impact generics due to their low margins and reliance on overseas production.
Legislative Efforts and Challenges
Bipartisan efforts to reform the patent system have been introduced in Congress, targeting practices like patent thickets, product hopping, and pay-for-delay agreements. Despite strong support, these bills have faced obstacles in becoming law, often due to legislative gridlock and opposition from industry stakeholders.
Global Implications
Trump’s “most favored nation” policy, which seeks to align U.S. drug prices with those paid by other countries, has raised concerns internationally. In the UK, for example, where branded drugs cost significantly less than in the U.S., pharmaceutical firms may respond by raising prices elsewhere or withholding drugs from certain markets. This could strain healthcare systems globally and potentially discourage pharmaceutical innovation.
Conclusion
As the U.S. continues to grapple with high drug prices, addressing the issue of “lazy patent expansion” is crucial for fostering a competitive and affordable pharmaceutical market. While Trump’s policy initiatives aim to reduce costs, comprehensive reform of the patent system is necessary to ensure long-term access to essential medications for all Americans.