Patenting Strategies on Inhaler Delivery Devices.

BACKGROUND: Patients with asthma and COPD rely on inhalers to control symptoms. Yet, these products remain expensive, in part because brand-name manufacturers have obtained numerous patents on inhalers, including on their delivery devices. Recent antitrust litigation has raised questions about the boundaries of listing device patents with the US Food and Drug Administration (FDA), particularly when patents do not claim any active ingredients. RESEARCH QUESTION: How have manufacturers relied on device patents to preserve market exclusivity on brand-name inhalers? STUDY DESIGN AND METHODS: We identified patents on brand-name inhalers approved for asthma and COPD between 1986 and 2020 using the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book). We extracted information about patents from LexisNexis TotalPatent One and Google Patents and searched device patents for mention of active ingredients or other prespecified features linking the patent to the relevant drug. For each inhaler, we determined the duration of protection added by device patents. RESULTS: The FDA approved 53 brand-name inhalers for asthma and COPD from 1986 through 2020, 39 of which had at least one device patent. One hundred thirty-seven distinct device patents were in the final cohort, representing 49% of all patents listed on inhalers. Seventy-seven percent of device patents made no mention of active ingredients or their molecular structures, and 72% made no mention of any relevant prespecified feature connecting the device patent to the drug product. For the 39 brand-name inhalers with one or more device patents listed in the Orange Book, device patents extended the duration of market protection by a median of 5.5 years (interquartile range, 0.0-10.5 years) beyond the last-to-expire nondevice patent. INTERPRETATION: Patent and regulatory reform is needed to promote generic competition and to ensure that patients with asthma and COPD have access to affordable medications.

Patient and Payer Incentives to Use Patented Brand-Name Drugs vs Authorized Generic Drugs in Medicare Part D.

Importance: In response to scrutiny over high drug prices, manufacturers of insulin and direct-acting antiviral agents for treating hepatitis C have recently introduced authorized generic alternatives to their patented brand-name products. These authorized generic drugs have list prices at least 50% lower than the list price of the brand-name drugs, which should result in savings to patients. However, it is unclear whether these authorized generic drugs are offered on Medicare Part D formularies because they may not provide savings to plans or Medicare. Objective: To assess Medicare Part D formulary coverage for 4 brand-name formulations of insulin and direct-acting antiviral agents and their authorized generic formulations. Design, Setting, and Participants: This cross-sectional study used Medicare Prescription Drug Plan Formulary and Pricing Information Files from quarter 3 of 2020 and Medicare Part D plan enrollment for September 2020. Four patented brand-name drugs (sofosbuvir and velpatasvir fixed-dose combination tablets [Epclusa], ledipasvir and sofosbuvir tablets [Harvoni], insulin lispro [Humalog], and insulin aspart [Novolog]) and their authorized generic formulations for all Part D stand-alone prescription drug plans (n = 959) and Medicare Advantage prescription drug plans (n = 3148) were studied. Main Outcomes and Measures: Beneficiary-weighted formulary coverage of brand-name and authorized generic products; beneficiary out-of-pocket costs; and prerebate plan, manufacturer, and Medicare spending on brand-name and authorized generic products. Results: In quarter 3 of 2020, 97% of beneficiaries were in plans that covered brand-name drugs only or both brand-name and authorized generic drugs; approximately 3% were in plans that covered authorized generic drugs only. Observed authorized generic drug list prices were 67%, 62%, and 50% lower than list prices for Epclusa, Harvoni, and each brand-name insulin product, respectively. Medicare beneficiaries using authorized generic drugs could save $270 per year for 12 vials of Humalog and $2974 for a full course of Harvoni. Plans, however, have limited incentives to encourage authorized generic drug use because rebates for brands likely exceed savings available with authorized generic drugs, particularly for beneficiaries with spending that reaches the Medicare Part D coverage gap. Conclusions and Relevance: The results of this cross-sectional study suggest that authorized generic drugs for insulin and direct-acting antiviral agents may lower out-of-pocket spending for patients but are unlikely to provide savings for Part D plans or Medicare. Instead, these drugs allow manufacturers to offer products at a lower list price without materially lowering net prices or profits.

Higher Drug Prices from Anticompetitive Conduct: Three Case Studies.

U.S. consumers pay high drug prices. Brand-name drug companies claim that these prices are justified by pathbreaking research and development. But, sometimes the prices result from anticompetitive conduct. This article offers three case studies of how such behavior can increase price based on wakefulness drug Provigil, the allergic-reaction-treating EpiPen, and infection-treating Daraprim. The article contends that behavior that makes no sense other than by harming a competitor, that undercuts a regulatory regime, or that involves collusive conduct should not be protected. In targeting this behavior, antitrust scrutiny promises to lower drug prices.

Sharing, samples, and generics: an antitrust framework.

Rising drug prices are in the news. By increasing price, drug companies have placed vital, even life-saving, medicines out of the reach of consumers. In a recent development, brand firms have prevented generics even from entering the market. The ruse for this strategy involves risk-management programs known as Risk Evaluation and Mitigation Strategies ("REMS"). Pursuant to legislation enacted in 2007, the FDA requires REMS when a drug's risks (such as death or injury) outweigh its rewards. Brands have used this regime, intended to bring drugs to the market, to block generic competition. Regulations such as the federal Hatch-Waxman Act and state substitution laws foster widespread generic competition. But these regimes can only be effectuated through generic entry. And that entry can take place only if a generic can use a brand's sample to show that its product is equivalent. More than 100 generic firms have complained that they have not been able to access needed samples. One study of 40 drugs subject to restricted access programs found that generics' inability to enter cost more than $5 billion a year. Brand firms have contended that antitrust law does not compel them to deal with their competitors and have highlighted concerns related to safety and product liability in justifying their refusals. This Article rebuts these claims. It highlights the importance of samples in the regulatory regime and the FDA's inability to address the issue. It shows how a sharing requirement in this setting is consistent with Supreme Court caselaw. And it demonstrates that the brands' behavior fails the defendant-friendly "no economic sense" test because the conduct literally makes no sense other than by harming generics. Brands' denial of samples offers a textbook case of monopolization. In the universe of pharmaceutical antitrust behavior, other conduct--such as "pay for delay" settlements between brands and generics and "product hopping" from one drug to a slightly modified version--has received the lion's share of attention. But sample denials are overdue for antitrust scrutiny. This Article fills this gap. Given the failure of Congress and the FDA to remedy the issue, antitrust can play a crucial role in ensuring generic access to samples, affirming a linchpin of the pharmaceutical regime.

Strategies that delay or prevent the timely availability of affordable generic drugs in the United States.

High cancer drug prices are influenced by the availability of generic cancer drugs in a timely manner. Several strategies have been used to delay the availability of affordable generic drugs into the United States and world markets. These include reverse payment or pay-for-delay patent settlements, authorized generics, product hopping, lobbying against cross-border drug importation, buying out the competition, and others. In this forum, we detail these strategies and how they can be prevented.

Unsettling drug patent settlements: a framework for presumptive illegality.

A tidal wave of high drug prices has recently crashed across the U.S. economy. One of the primary culprits has been the increase in agreements by which brand-name drug manufacturers and generic firms have settled patent litigation. The framework for such agreements has been the Hatch-Waxman Act, which Congress enacted in 1984. One of the Act's goals was to provide incentives for generics to challenge brand-name patents. But brand firms have recently paid generics millions of dollars to drop their lawsuits and refrain from entering the market. These reverse-payment settlements threaten significant harm. Courts nonetheless have recently blessed them, explaining that the agreements reduce costs, increase innovation, and are reasonable based on the presumption of validity accorded to patents. Although scholars and the Federal Trade Commission have voiced strong arguments against courts' leniency, these have fallen on judicial deaf ears. In this Article, I apply the framework that the Supreme Court articulated in Verizon Communications v. Law Offices of Curtis V. Trinko, LLP, which underscored the importance in antitrust analysis of a regulatory regime addressing the challenged activity. In particular, the Hatch-Waxman Act provides Congress's views on innovation and competition in the drug industry, freeing courts from the thorny task of reconciling the patent and antitrust laws. Unfortunately, mechanisms that Congress employed to encourage patent challenges--such as an exclusivity period for the first generic to challenge validity--have been twisted into barriers preventing competition. Antitrust can play a central role in resuscitating the drafters' intentions and promoting competition. Given the Act's clear purpose to promote patent challenges, as well as the parties' aligned incentives and the severe anticompetitive potential of reverse payments, courts should treat such settlements as presumptively illegal. If the parties can demonstrate that the payments represent a reasonable assessment of litigation success, then they can rebut this presumption. If not, courts should conclude that the agreements violate the antitrust laws.