Big name drugs are facing generic and biosimilar entry after years of exclusivity.
Nine of the pharmaceutical industry’s best-selling drugs are losing patent exclusivity in the coming years. Notably, Humira, Keytruda, Revlimid, and Eliquis, the top four of the pharmaceutical industry’s best-selling drugs in 2020, are set to face generic and biosimilar entry.
Brand vs Generic Drugs
Generic drugs work in the same way as brand name drugs. Though the names may be different, generic drugs are just as effective as brand name drugs. When a new drug is developed, it is patented and sold under a brand name. When a drug is patented, only the pharmaceutical company that holds the patent is allowed to manufacture the drug. This exclusivity period protects the brand name drug from generic competition. Once the patent or patents on the brand name drug expire, generic versions of that drug may be developed and sold by other companies. Generic drugs are typically about 80-85% less expensive than brand name drugs.1
What is a patent thicket?
A patent thicket occurs when multiple additional patents are filed on the same drug. This extends the exclusivity of the drug beyond the end of the initial patent. Five of the top best-selling drugs in the United States have a total of 584 patent applications filed after their initial FDA approval.2 Patents can be filed on not just the drug composition itself, but on the devices used to deliver the drug as well. For example, Humira has patents on the autoinjector device used to deliver the drug as well as a separate patent for just the “firing button” on the device.2 Each additional patent can add years of exclusivity to the drug, keeping it protected from generic entry.
How do patent thickets affect cost?
Patent thickets do not allow for competition and can keep a drug from going generic for years or even decades. Without competition in the marketplace, pharmacy benefit managers are unable to negotiate rebates with manufacturers. Rebates reduce the overall costs for prescription drugs. Patent thickets obscuring the ability to negotiate for savings leads to patients paying higher costs for prescription drugs.
Patent Extensions Increase Additional Sales
Humira, Keytruda, Revlimid, and Eliquis pulled in $55.5 billion in sales in 2020 alone. Humira generates around 43% of AbbVie’s total revenue while Keytruda generates around 30% of Merck’s revenue.3 Through patent extensions, manufacturers were able to make billions more in additional sales without the threat of competition. Humira, the world’s top drug by sales, has over 257 patents attached to the drug which has caused AbbVie to face scrutiny over the years.3 AbbVie has settled multiple lawsuits since 2017 surrounding its so-called patent thickets and has been subject to a congressional probe. Now, Humira is facing biosimilar competition in 2023, with Amgen launching Amjevita. With Humira facing biosimilar competition, Keytruda is expected to become the world’s best-selling drug in 2023. Keytruda will lose market exclusivity sometime in 2028.
Contact our pharmacy practice to learn more about patent thickets and their impact on your plan spend.
- “Generic Drug Facts”, U.S. Food & Drug Administration, accessed January 19, 2023, https://www.fda.gov/drugs/generic-drugs/generic-drug-facts
- “A “Patent Thickets” are Anti-Competitive and Lead to Higher Drug Costs”, PCMA, accessed January 19, 2023, https://www.pcmanet.org/patent-thickets-are-anti-competitive-and-lead-to-higher-drug-costs/
- “The top 15 blockbuster patent expirations coming this decade”, Fierce Pharma, accessed January 19, 2023, https://www.fiercepharma.com/special-report/top-15-blockbuster-patent-expirations-coming-decade