NEW REPORT: Rx patent abuse tactics block generic drugs 

Media Contacts

New report explains how drug companies manipulate patents to prevent competition

For immediate release: Wednesday, April 19, 2023

WASHINGTON — Most regular folks go glassy-eyed when someone starts talking about patent law. But patents are both the key to our innovative prescription drug industry and the reason why it is getting harder for patients to save money on lower cost generic substitutes. The U.S. PIRG Education Fund released a new report, “The Cost of Prescription Drug Patent Abuse: How drug companies abuse the patent system and demand inflated monopoly prices in Americaon Wednesday to explain the complex patent tactics that pharmaceutical companies use to block competition. 

“Drug companies are getting even more inventive in finding ways to abuse the patent system to keep competing drugs off pharmacy shelves,” said Patricia Kelmar, the report author and U.S. PIRG Education Fund’s health care campaigns senior director. “We want people to understand why — even after decades of waiting for a drug patent to expire — there still isn’t a lower-cost generic option available to them.”

When the U.S. Patent and Trademark Office (USPTO) grants a drug company a patent, the drugmaker receives the right to exclusive sales for 20 years, so it can set the price and raise it without fear of ceding market share to a lower-priced competitor. But when patents are invalidated or expire, competitors can introduce generics into the market. The competition leads to dramatic savings: New generic drug approvals in 2018 yielded annual savings of over $17.8 billion; in 2019 $24.8 billion in savings, and in 2020 $10.7 billion in savings. 

The report explains, in laypeople’s terms, how drug companies commonly use tactics such as “patent thickets,” “pay-for-delay” and “product hopping” to protect their monopoly pricing. It also shows how those tricks prevent competitors from selling lower-cost options to four common drugs: Lidoderm for shingles, Humira for rheumatoid arthritis, Revlimid for blood cancer, and Suboxone, an important opioid addiction treatment.  

President Joe Biden’s executive order to end anti-competitive practices specifically called for greater support for generic and biosimilar drugs in the marketplace to provide low-cost options for people who need them. The USPTO and the U.S. Food and Drug Administration have begun collaborating on some solutions

“With so many Americans struggling to afford crucial medications, our regulators must work faster to stop these patent abuses and bring competition back into the prescription drug market,” Kelmar said. “Drug companies should focus their creative genius on new treatments, not on simply finding new ways to extend patents indefinitely so they can preserve their monopoly prices.”