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.
Trump
Indian Pharma Stocks Tumble Amid Trump’s Drug Price Cut Order: Industry Braces for Patent Clampdown
In a significant development that sent shockwaves across global pharmaceutical markets, U.S. President Donald Trump signed an executive order aimed at drastically reducing prescription drug prices in the United States. The move has triggered a sharp decline in Indian pharmaceutical stocks, raising concerns about the future of generic drug exports and the potential tightening of global patent regimes.
Trump Pushes for Global Price Parity
President Trump’s executive order, signed on Monday, mandates that U.S. drug prices should align with the lowest prices paid by other developed nations. Under the proposed “Most Favoured Nation” policy, the U.S. would no longer pay more for prescription medicines than any other country. The administration has given pharmaceutical companies 30 days to propose pricing solutions. Should they fail to deliver “significant progress” within six months, further government intervention is expected.
In a social media post, Trump argued that American consumers were unfairly burdened by high drug prices, noting that medicines manufactured in the same facilities are sold for significantly less in other countries. He emphasized that the United States bears a disproportionate share of global research and development costs, indirectly subsidizing affordable drugs for the rest of the world.
Indian Pharma Sector Reacts
The announcement caused immediate ripples in Indian stock markets. Shares of major pharmaceutical firms such as Sun Pharma plunged nearly 7% during early trading, while others including Lupin, Aurobindo Pharma, Divi’s Laboratories, and Glenmark Pharma also experienced a selloff.
Although Trump’s pricing directive primarily targets patented and branded drugs, experts warn of indirect consequences for India’s generic drug industry, which is heavily reliant on the U.S. market for exports.
“The concern lies in the potential policy response from multinational pharma companies,” said P.V. Appaji, former Director General of the Pharmaceuticals Export Promotion Council (Pharmexcil).
Threat of Patent Barriers Looms
Industry analysts believe that global drugmakers may respond to the price caps by tightening intellectual property regulations to prolong their market exclusivity and recover R&D investments. Potential measures include data exclusivity, automatic patent term extensions, patent linkage mechanisms, broader patentability criteria, and evergreening tactics.
Such practices, if adopted widely, could delay the entry of generic drugs into global markets and restrict the availability of off-patent drugs for Indian manufacturers. “These moves threaten to shrink the pipeline of medicines going off-patent, directly impacting India’s generic export prospects,” warned Ravi Uday Bhaskar, another former Pharmexcil chief.
India’s Stance on Patent Flexibilities
India has historically resisted stringent patent norms in trade negotiations, advocating for access to affordable medicines as a public health priority. The country does not recognize data exclusivity and maintains that regulatory authorities can rely on existing clinical trial data to approve generics. It also rejects patent linkage, preventing unnecessary legal hurdles that could delay the launch of affordable versions.
“India blocks evergreening by disallowing patents for minor modifications to existing drugs,” said Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI).
However, if global pharmaceutical giants succeed in influencing trade agreements to include such provisions, Indian generic drug manufacturers may face significant challenges. The development and export of specialty generics—high-value, complex generics—could particularly be affected.
The Road Ahead
While the immediate impact of Trump’s executive order may be limited to branded drugs, the broader implications could be far-reaching for India’s pharmaceutical industry. Any moves to fortify global patent laws or extend exclusivity periods could undermine India’s position as the “pharmacy of the world” and disrupt access to affordable medications in many countries.
As the U.S. pushes forward with its aggressive drug pricing reforms, industry stakeholders and policymakers in India will need to closely monitor international negotiations and advocate for a balanced approach that safeguards innovation without compromising global health access.
Could Intellectual Property Retaliation Be the Game-Changer in Trade Wars?
In response to President Donald Trump’s tariff policies, many countries are considering retaliation, primarily through higher tariffs and import restrictions. While these measures may impact the U.S. economy, they also pose risks for the countries imposing them. The goal is to make the pain felt in the U.S. greater than the consequences suffered by the retaliating nation. While this strategy may hold true in many cases, countries like the European Union (EU), Canada, and other trading partners could take a more direct and potentially more damaging approach—targeting the United States’ intellectual property (IP) rights.
Intellectual property, particularly patents and copyrights, has long been a cornerstone of U.S. economic dominance. In 2024, the United States received nearly $150 billion in royalties and licensing fees alone, which makes up over 5% of total after-tax corporate profits. But these fees represent only the direct payments for IP use; they don’t account for embedded costs in products like software and technology, which are often used globally in consumer goods.
One possible retaliatory strategy involves countries announcing that they will no longer respect U.S. patents and copyrights for as long as Donald Trump continues his tariff policies. This kind of action would target U.S. companies that rely on their intellectual property rights for profit, such as tech giants like Microsoft and pharmaceutical companies like Pfizer and Merck.
The concept of not honoring foreign patents is not without precedent. During World War I, the U.S. invoked the Trading with the Enemy Act to allow the compulsory licensing of patents held by German companies. This measure allowed U.S. businesses to use these patents without permission, as long as they paid a minimal licensing fee set by the U.S. government. Countries like Canada, the EU, and others could implement a similar policy to challenge the United States’ trade practices.
The potential benefits of this type of retaliation are twofold. First, it would allow consumers in the retaliating countries to access cheaper products—such as generic drugs, which could drastically reduce the cost of life-saving medications like those used in cancer and heart disease treatments. Second, it would lower the cost of everyday goods like computers, by bypassing the licensing fees for software from companies like Microsoft.
For consumers, this could mean cheaper access to essential products and technologies, making it a win-win situation. Imagine having access to affordable generics of expensive drugs or the latest software without the added cost of licensing fees. This approach would directly benefit the people in those countries, and it would provide a powerful counterweight to the economic challenges posed by Trump’s tariffs.
Such an approach would also hit U.S. corporations where it hurts—potentially changing the landscape of global trade in ways that tariffs alone may not. If other nations got accustomed to accessing cheap drugs, software, and entertainment content, it could shift global perceptions of U.S. intellectual property practices. This shift could permanently disrupt the revenue models of many major U.S. companies that rely on high licensing fees and patent monopolies. For instance, without the constraints of patent monopolies, Americans themselves could spend far less on prescription drugs—possibly saving around $550 billion annually.
Intellectual property, particularly patents and copyrights, has long been a cornerstone of U.S. economic dominance. In 2024, the United States received nearly $150 billion in royalties and licensing fees alone, which makes up over 5% of total after-tax corporate profits. But these fees represent only the direct payments for IP use; they don’t account for embedded costs in products like software and technology, which are often used globally in consumer goods.
One possible retaliatory strategy involves countries announcing that they will no longer respect U.S. patents and copyrights for as long as Donald Trump continues his tariff policies. This kind of action would target U.S. companies that rely on their intellectual property rights for profit, such as tech giants like Microsoft and pharmaceutical companies like Pfizer and Merck.
The concept of not honoring foreign patents is not without precedent. During World War I, the U.S. invoked the Trading with the Enemy Act to allow the compulsory licensing of patents held by German companies. This measure allowed U.S. businesses to use these patents without permission, as long as they paid a minimal licensing fee set by the U.S. government. Countries like Canada, the EU, and others could implement a similar policy to challenge the United States’ trade practices.
The potential benefits of this type of retaliation are twofold. First, it would allow consumers in the retaliating countries to access cheaper products—such as generic drugs, which could drastically reduce the cost of life-saving medications like those used in cancer and heart disease treatments. Second, it would lower the cost of everyday goods like computers, by bypassing the licensing fees for software from companies like Microsoft.
For consumers, this could mean cheaper access to essential products and technologies, making it a win-win situation. Imagine having access to affordable generics of expensive drugs or the latest software without the added cost of licensing fees. This approach would directly benefit the people in those countries, and it would provide a powerful counterweight to the economic challenges posed by Trump’s tariffs.
Such an approach would also hit U.S. corporations where it hurts—potentially changing the landscape of global trade in ways that tariffs alone may not. If other nations got accustomed to accessing cheap drugs, software, and entertainment content, it could shift global perceptions of U.S. intellectual property practices. This shift could permanently disrupt the revenue models of many major U.S. companies that rely on high licensing fees and patent monopolies. For instance, without the constraints of patent monopolies, Americans themselves could spend far less on prescription drugs—possibly saving around $550 billion annually.