Big Pharma fights patent disclosure demand from investors

A number of of the world’s largest pharmaceutical corporations are combating shareholder proposals to drive 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 traders 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 reviews ought to present particulars on whether or not their patent methods are designed to increase the exclusivity of top-selling medication and what impression that is more likely to have on affected person entry, based on the shareholders, which embrace Mercy Funding Companies and Trinity Well being.

Eight of the 9 corporations are combating the proposals on the Securities and Change Fee. Firms routinely problem shareholder proposals on the SEC and sometimes win. BMS continues to be concerned in discussions with the traders.

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 tons of of patents past the first patent protecting a selected 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.

“If you happen to don’t have competitors then producers can simply run costs amok and that’s what you might have seen within the US, which is the only most costly healthcare system on the earth,” stated Lydia Kuykendal, director of shareholder advocacy at Mercy Funding Companies.

She stated variations within the patent programs between the US and EU imply European sufferers usually acquire 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 rivals had been solely in a position to launch this 12 months within the US due to an intensive “patent thicket” created across the drug, declare rivals.

“You’ll be able to’t litigate by 100 patents: its simply too costly and too dangerous,” stated Rachel Goode, head of authorized and Mental Property at Fresenius Kabi, a healthcare firm which makes generic medication.

She stated 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 aren’t incremental improvements that enhance therapies for sufferers, stated 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.

Massive pharma defends their patent methods, arguing that mental property safety is required to justify persevering with funding in current 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 informed the SEC the shareholder proposals ought to be excluded for a number of causes, together with that they’re an try to “micromanage the enterprise” and contain advanced scientific and authorized matters outdoors the experience of shareholders. Implementing the proposals might undermine the corporate’s core enterprise mannequin, stated Merck in response to a proposal made by The Capuchin Franciscan Province of St. Joseph.

US senator Elizabeth Warren
US senator Elizabeth Warren has requested the US patent workplace to analyze Merck’s requests for brand spanking new patents on its most cancers drug Keytruda © REUTERS

The Capuchin Order’s proposal cites a 2021 examine 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 purposes relate to “strategies of manufacturing and processes that can be utilized to fabricate the drug”, which may thwart competitors even after the first patent on the drug has expired, stated 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 12 months, notching up about $24bn in gross sales. The drug is scheduled to lose exclusivity supplied by its main patent in 2028 however many analysts consider Merck will be capable to use its “patent thicket” to delay the introduction of competitor medication.

“The Keytruda patent property actually does go nicely past 2028,” stated Umer Raffat, analyst at Evercore ISI. “They’re innovating past the present drug compound and this technique ought to help Merck’s earnings into the following 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 spanking new patents on Keytruda, together with a brand new supply methodology — an injection underneath the pores and skin.

“It isn’t in any respect clear that Merck is doing something aside from extending its monopoly energy over the drug,” Warren stated.

A Merck spokesperson stated the corporate had developed many inventions that enhanced the advantages of Keytruda to achieve a larger variety of sufferers and improve efficacy of the therapy. “When applicable, Merck search to guard its extra innovation,” he added.

Merck stated it continued to level to late 2028 because the most definitely timeframe for biosimilar entry into the market.

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