Intellectual PropertyPatents

Exploring Companies’ Manipulation of Pharma Patents

Have you ever wondered how pharmaceutical companies manage to profit handsomely even after the expiry of their patent? You can stop wondering now, as we’ve laid out the ins and outs of pharma patent manipulation for all to see.

The pharmaceutical patent system was created to assist pharmaceutical companies in protecting their best interests. However, over time, it has evolved into a means for them to maintain a monopoly and maximise their profits. Most pharma companies find a way to skirt the rules governing intellectual property rights, causing issues for the general public.

Here’s a look at how companies manipulate pharma patents, leading to the extension of their exclusivity over a drug’s manufacturing and sales.

How Do Pharma Companies Profit off Patents?

Rapid technological advancements enable the production and development of useful drugs. However, this process is expensive, costing businesses billions of dollars. Most governments have a patent system in place to protect their interests and encourage further innovation. Furthermore, the pharmaceutical industry must deal with the risk of costly research, which may jeopardise its survival. Moreover, these companies need pharma patents to prevent large-scale production of generic drugs from cutting into the profits which they have sown.

How Do You Patent a Pharmaceutical Drug?

  1. Firstly, collect all the information needed to draft the patent application, including the innovation description, lab reports, and processes involved
  2. Thereafter, go over Section 3 and 4 of The Patents Act, 1970 to ensure that the invention is patentable, and ensure  that it meets all the patent protection requirements 
  3. Then you may go ahead and file a patent application for intellectual property rights with the Patent Office, with the applicable documents and fees payable
  4. Further, after you apply for the patent, publish the application online and in the required journals
  5. Afterwards, submit your patent for an examination, and ensure that you clear the patent scrutinization phase. Answer all the objections raised and resolve any issues raised. 

How Long Do Patents Last for Pharmaceuticals?

Patents in India have a life of 20 years from the date of applying for registration. Also, licenses which are intellectual property rights, such as patents are territorial in nature, and hence are valid only in limited geographical boundaries. Additionally, to gain patent protection in another country, the applicant must apply to the respective patent office of that country. Further, after 20 years, some companies even put drug patents for sale to ensure continued monetary benefits. 

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Who Are the Top 20 Pharma Companies?

The figures mentioned below are valid as of 2019, we’ve found fit to use these figures to negate the extreme economic volatility caused due to the COVID-19 crisis from our findings. 

Sl No Pharma Company (2019) Growth (% per Quarter) Market Cap ($ billion)
1 Johnson & Johnson 7.5% 372.2
2 Roche 12.7% 239.6
3 Pfizer -6.9% 235.8
4 Novartis 14% 226.3
5 Merck 7.3% 213.3
6 Eli Lilly 9% 133.6
7 Novo Nordisk 17% 132.1
8 AbbVie -14.7% 119.1
9 Amgen -5.9% 116.8
10 Sanofi 3.9% 115.7
11 GlaxoSmithKline 7.2% 105.7
12 AstraZeneca 4.5% 103.7
13 Gilead Sciences 0.3% 81.2
14 Bristol-Myers Squibb -7.9% 78.1
15 CSL 5.4% 65.9
16 Bayer -4.9% 63.4
17 Celgene 37.1% 61.4
18 Takeda Pharmaceuticals  141.8% 53.4
19 Merck KGaA 13% 52.2
20 Allergan 8.1% 48.7

Ways in Which Big Pharma Controls the Pharmaceutical Market

Big Pharma engages in pay-for-delay agreements with generic drug makers, wherein they pay them not to launch a generic version of a drug. However, such tactics end up costing the public, specifically the American public almost $3.5 billion annually. 

Furthermore, citizen petitions filed by companies put pressure on the FDA to postpone the review and approval of a generic drug petition. Furthermore, authorised generics are drugs developed by the brand-name company itself that contains the same product but are marketed under a different name. Essentially, they sell the drug patents and buy the rights themselves to extend their monopoly by producing generics themselves.

How Do Companies Exploit and Manipulate Pharma Patents?

Evergreening

Pharma companies extend their monopoly by filing for new patents on the distinct effects a drug has. As a result, this substantially extends the term of patent protection, allowing pharma companies to extend their commercial benefits.

Patent Thicket

A patent thicket is a dense web of interrelated and connecting intellectual property rights, a pharma company uses to extend its commercial monopoly over a drug. New entrants face significant difficulties while entering a market when patent thickets are used.

Product Hopping

Product hopping is the process by which large pharma companies prevent generic drug makers from mass-producing their products. They do so by reformulating their products and adding fillers to extend patent life. 

For instance, AbbVie filed 247 patents on its drug Humira, extending patent life to 39 years. The drug generates almost two-thirds of the company’s revenues, bringing in over $100 billion since its launch.

Conclusion:-

From this, we can be certain that pharma companies make use of several strategies to prevent generic drug competition and maximise their profits. Hence it can be said that by filing for fresh patents by making small changes, pharma companies extend their monopoly over a drug’s production and marketing. Unfortunately, such lucrative practices result in the common man getting the shorter straw of the deal.

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