A number of of the world’s largest pharmaceutical corporations are combating shareholder proposals to power them to reveal data on their use of a controversial patent technique that may delay rivals from launching cheaper variations of blockbuster medication.
A coalition of moral buyers have requested Johnson & Johnson, Merck, Pfizer, Eli Lilly, Gilead, Amgen, Regeneron, Bristol Myers Squibb and AbbVie to publish a report on the method they observe when making use of for a number of patents on a single drug.
The experiences ought to present particulars on whether or not their patent methods are designed to increase the exclusivity of top-selling medication and what affect that is prone to have on affected person entry, based on the shareholders, which embrace Mercy Funding Providers and Trinity Well being.
Eight of the 9 corporations are combating the proposals on the Securities and Trade Fee. Firms routinely problem shareholder proposals on the SEC and sometimes win. BMS continues to be concerned in discussions with the buyers.
The shareholder proposals come amid a public debate over drug corporations’ use of so referred to as “patent thickets”, whereby they file a number of and typically a whole lot of patents past the first patent masking a specific compound. Critics allege the technique delays the launch of generic medicines by rivals even after the 20-year exclusivity interval on the first patents of blockbuster medication elapses.
“For those who don’t have competitors then producers can simply run costs amok and that’s what you may have seen within the US, which is the only costliest healthcare system on the planet,” mentioned Lydia Kuykendal, director of shareholder advocacy at Mercy Funding Providers.
She mentioned variations within the patent techniques between the US and EU imply European sufferers sometimes achieve entry to cheaper, generic medication as much as 5 years earlier than their American counterparts.
Humira, the world’s best-selling drug, which has amassed $200bn in international gross sales for AbbVie, confronted competitors in Europe in 2018. However the first biosimilar opponents had been solely in a position to launch this yr within the US due to an intensive “patent thicket” created across the drug, declare rivals.
“You’ll be able to’t litigate by way of 100 patents: its simply too costly and too dangerous,” mentioned Rachel Goode, head of authorized and Mental Property at Fresenius Kabi, a healthcare firm which makes generic medication.
She mentioned many branded drug corporations deployed a so-called “double patenting” approach, whereby they claimed the identical or an apparent variation of an invention in a couple of patent. These should not incremental improvements that enhance therapies for sufferers, mentioned Goode.
The US Patent and Trademark Workplace and Meals and Drug Administration are reviewing their work practices to make sure extra well timed entry to market of generic and biosimilar medication following a request from the Biden administration, which is concentrating on excessive drug costs.
Huge pharma defends their patent methods, arguing that mental property safety is required to justify persevering with funding in present medication. These investments drive improvements that profit sufferers, reminiscent of new dosing regimens, supply strategies and mixtures with different medication that present actual advantages to sufferers, they are saying.
The eight corporations have instructed the SEC the shareholder proposals must be excluded for a number of causes, together with that they’re an try and “micromanage the enterprise” and contain advanced scientific and authorized matters exterior the experience of shareholders. Implementing the proposals might undermine the corporate’s core enterprise mannequin, mentioned Merck in response to a proposal made by The Capuchin Franciscan Province of St. Joseph.
The Capuchin Order’s proposal cites a 2021 research by I-Mak, a analysis group specializing in well being inequity, which discovered Merck had filed 95 secondary patents on its most cancers drug Keytruda. Two out of 5 of those patent functions relate to “strategies of manufacturing and processes that can be utilized to fabricate the drug”, which might thwart competitors even after the first patent on the drug has expired, mentioned the Order in its proposal.
I-Mak analysis suggests Merck has sought as much as 180 patents on Keytruda, which is forecast to be the world’s top-selling drug this yr, notching up about $24bn in gross sales. The drug is scheduled to lose exclusivity supplied by its major patent in 2028 however many analysts consider Merck will be capable of use its “patent thicket” to delay the introduction of competitor medication.
“The Keytruda patent property actually does go effectively past 2028,” mentioned Umer Raffat, analyst at Evercore ISI. “They’re innovating past the present drug compound and this technique ought to assist Merck’s earnings into the subsequent decade.”
Final week US Senator Elizabeth Warren despatched the director of the US patent workplace, Kathi Vidal, a letter urging nearer scrutiny of Merck’s requests for brand new patents on Keytruda, together with a brand new supply technique — an injection beneath the pores and skin.
“It’s not in any respect clear that Merck is doing something aside from extending its monopoly energy over the drug,” Warren mentioned.
A Merck spokesperson mentioned the corporate had developed many inventions that enhanced the advantages of Keytruda to succeed in a better variety of sufferers and enhance efficacy of the therapy. “When acceptable, Merck search to guard its extra innovation,” he added.
Merck mentioned it continued to level to late 2028 because the probably timeframe for biosimilar entry into the market.