Study: Pharma companies stack up patents to keep drug prices high longer

A research team led by S. Sean Tu of the University of Alabama published a study Monday in JAMA examining how pharmaceutical companies exploit the US patent system to extend their market monopolies. The study analyzed small-molecule drugs approved by the Food and Drug Administration between 1990 and 2019, since other drug types such as biologics are not systematically tracked in a public FDA database.

The findings show that the average number of patents per approved drug rose from 2.1 in 1990 to 6.9 in 2019 — more than tripling over three decades. Most of that growth came from so-called "nonprimary" patents, which are generally unrelated to a drug's active ingredient and instead cover minor changes to inactive ingredients, updates to how the drug is used, or the design of specialty delivery devices such as auto-injectors.

Patent thickets delay generics

This buildup of extra patents creates what's known as a "patent thicket," which delays the arrival of cheaper generic versions on the market, keeping prices elevated for longer without any real clinical improvement. The study found that the growth in patents per drug extended the average period a drug remained under patent protection from two years in 1990 to 6.1 years in 2019.

The authors note that because patent protection typically determines how long brand-name manufacturers can charge monopoly prices, the rapid growth of nonprimary patents may limit price competition that would otherwise benefit patients and the healthcare system by helping avoid unnecessary spending.

The researchers also caution that their estimates likely understate the true scale of current patent thickets, since the study used a five-year follow-up window after FDA approval, while patent-related activity today can extend up to nine years after a drug reaches the market.