Both Republican and Democratic senators have criticized moves by drug makers to extend the life of their monopolies on sales. But action on high drug prices, a major concern for consumers, has been so far negligible in this Congress.
Senators on the Senate Health, Education, Labor, and Pensions Committee complained during a hearing earlier this week about drug makers that game the system. There was also criticism from Democrats about President Trump’s pick to lead Health and Human Services: Alex Azar, who led the U.S. division of Eli Lilly, a pharmaceutical company.
Drug makers have used a technique called evergreening to extend the life of a patent for a brand-name drug.
Sen. Patty Murray, D-Wash., lashed out that “companies are systematically continuing to layer new patents on old drugs to keep competitors off the market.”
Some of her Republican colleagues joined the criticism.
“An obstacle is what is called the patent thicket strategy that too many drug companies pursue,” said Sen. Susan Collins, R-Maine. “Humira, which is the best-selling drug in the world with $16 billion in annual sales, does not have a generic equivalent because its manufacturer has obtained more than 100 patents with various changes to block generic companies from coming to the market.”
When the Food and Drug Administration approves a new drug, it gives the manufacturer 17 years of sales exclusivity. After that time is up, then a generic drug maker can make and sell a cheaper version of the product.
However, a drug maker can get a new patent for a slight modification for a product, and effectively get a new patent.
“What you do is you keep coming up with a slightly different population that needs the drug,” said Gerard Anderson, a professor at the Johns Hopkins Bloomberg School of Public Health. “It is not about cancer, it is about breast cancer but breast cancer with this condition or that condition in addition to the breast cancer.”
Technically, a generic drug maker can still make a cheaper version of the original drug, but it cannot make a version of the newer drug with a slight modification.
“If you are a hospital you only want to have one drug on your formulary,” Anderson said. “You don’t want to give the wrong drug to the wrong person so it is easier to have just one drug on formulary as opposed to two.”
He added that a hospital usually only buys one drug due to safety concerns, to make it easier to ensure the wrong person does not get the wrong drug. So a hospital would likely go more for the newer version.
Some drugs for rare diseases, also called orphan drugs, can have 10 or more applications. Some of the applications are part of a focus on personalized medicine, which is an initiative to tailor medications to a patient.
Anderson said that any solution to evergreening would require new legislation, not regulatory moves. Legislation concerning patents and generic drugs was last passed in 1984 as the Hatch-Waxman Act.
“In 1984 when [Rep. Henry] Waxman and [Sen. Orrin] Hatch put the law together, they never thought of personalized medicine,” he said.
Legislation could target how a patent is structured, which Sen. Rand Paul, R-Ky., alluded to at the hearing.
“I think the evergreening is a big thing and we have to come to a bipartisan agreement where we say where patents end,” he said.
A report from the National Academies of Science and Engineering recommended limiting patents as well. It called for shrinking the market exclusivity on sales for rare disease (orphan) drugs to seven years.
The generic drug and insurance industry are fighting for Congress to clamp down on the practice.
Back in July, America’s Health Insurance Plans testified at a congressional hearing that evergreening does not “typically provide an enhanced clinical benefit to consumers.”
Anderson acknowledged that any legislation to tackle evergreening must draw a fine line to not stifle innovation and prevent drug makers for pursuing such treatments.
“You still want the pharmaceutical industry to innovate and to do clinical testing on that population,” he said. “Otherwise you don’t know if the drug works for that population.”
Congress has taken some measures to combat high drug prices, solely focused on spurring more generic drugs competition. These include allowing the FDA to approve generic drugs faster if there is only one sole source manufacturer of a generic, which can lead to price spikes as no competition can lower prices.
But that legislation was an answer in part to cases such as the infamous price spike orchestrated by former pharma CEO Martin Shkreli. His company, Turing Pharmaceuticals, acquired an antimalarial drug that had been off patent for years called Daraprim. It then raised the price by 5,000 percent from $13 a pill to $750.
Shkreli, later ousted from Turing after being charged and later convicted of securities fraud, was able to raise the price because there was no competition for Daraprim, since drug only served a small population.