The Impact of Patent Thickets on Prescription Drug Prices in the US

Prescription drugs in the United States are known for their high costs, creating a burden for many Americans. A recent study published in the journal JAMA sheds light on one of the major contributors to these high prices – the overuse of the U.S. patent system.

The study, led by S. Sean Tu, a drug and patent law expert at the University of Alabama, reveals a concerning trend in the pharmaceutical industry. Since 1990, the number of patents for small molecule drugs has more than tripled, with drugs approved in 2019 averaging 6.9 patents per drug, compared to just 2.1 patents in 1990.

Most of these additional patents are classified as “minor” patents, which do not directly relate to the drug’s active ingredients but instead cover modifications to inactive components, changes in drug administration methods, and the development of specialized delivery devices like auto-injectors. This accumulation of extra patents on a single drug leads to the creation of a “patent thicket,” which hinders the entry of generic drugs into the market and sustains high drug prices over extended periods.

The study highlights that this proliferation of patents has significantly prolonged the exclusivity period for drug manufacturers, with the average patent life increasing from two years in 1990 to 6.1 years in 2019. This extended exclusivity period allows branded companies to maintain monopoly prices for longer durations, limiting price competition and ultimately burdening patients and healthcare systems with unnecessary expenses.

The Study’s Findings

Using publicly available data, Tu and his team analyzed small molecule drugs approved by the FDA and the associated patents filed for these drugs. By categorizing the types of patents linked to each drug and their impact on the drug’s patent term, the researchers revealed the concerning trend of patent overgrowth in the pharmaceutical industry. The study focused on drugs approved between 1990 and 2019, with a patent tracking period of five years, though the researchers suspect that the current scale of the patent thicket may be underestimated, as patent activity has been observed up to nine years post-FDA approval.