Thanks To Evergreening And Legal Threats, AbbVie Has Earned $114 Billion Since 2016 From A Drug Whose Key Patent Expired Back Then
Techdirt has been writing about evergreening - making small changes to a drug, often about to come off patent, in order to gain a new patent that extends its manufacturer's control over it - for ten years now. The evergreening approach betrays the implicit bargain that lies at the heart of patents - that a company is granted a government-backed monopoly for a limited period, in return for allowing competitors to produce their own version when the patent term ends. The idea is that once a patent expires, competition will kick in, leading to significant price reductions and wider use of the previously patented invention.
Arguably the popularity of evergreening has increased in recent years, as pharma companies have realized that it is cheaper and easier to extend an existing monopoly by using various minor tricks than to spend millions trying to come up with a completely new blockbuster drug. That was made explicit in a remarkable set of PowerPoint slides from the management consultant company McKinsey, presented to executives at the drug company AbbVie, discussed at length by Mike in 2021. They outlined ways in which patents for AbbVie's Humira, a biologic drug that is used by many to treat arthritis, Crohn's disease, and other diseases, could be extended.
The McKinsey slides mentioned two principal methods for keeping out so-called biosimilars" - drugs that are functional equivalents from rival companies - once the Humira patent had expired. One was to Differentiate the product through extensions/next-gen products" - essentially, repackaging Humira, or finding slightly different ways to use it - and the other was simply Delay/block biosimilar entry through legal/lobbying actions".
A new article in the New York Times explains how Humira has generated $114 billion for AbbVie since 2016 - the year the drug's key patent expired - by applying precisely these techniques. For example, AbbVie has sought to blanket Humira with patents: it applied for 311 of them, and was granted 165. Some of them are typical evergreening:
an early Humira patent, which expired in 2016, claimed that the drug could treat a condition known as ankylosing spondylitis, a type of arthritis that causes inflammation in the joints, among other diseases. In 2014, AbbVie applied for another patent for a method of treating ankylosing spondylitis with a specific dosing of 40 milligrams of Humira. The application was approved, adding 11 years of patent protection beyond 2016.
The patent strategy for Humira was designed to make it more difficult for a biosimilar to follow behind," Bill Chase, an AbbVie executive, said at a conference in 2014.
AbbVie has coupled these kinds of trivial reformulations of its drug with legal bullying:
AbbVie has been aggressive about suing rivals that have tried to introduce biosimilar versions of Humira. In 2016, with Amgen's copycat product on the verge of winning regulatory approval, AbbVie sued Amgen, alleging that it was violating 10 of its patents. Amgen argued that most of AbbVie's patents were invalid, but the two sides reached a settlement in which Amgen agreed not to begin selling its drug until 2023.
Over the next five years, AbbVie reached similar settlements with nine other manufacturers seeking to launch their own versions of Humira. All of them agreed to delay their market entry until 2023.
The article explains how using this two-pronged attack has enabled AbbVie to increase Humira's list price by 60% since 2016 - when the main patent expired and competition should have brought the price down - to over $80,000 per year. As a result, patients have had to forgo treatment or spend huge sums for the drug. Some have been forced to resort to extraordinary measures:
her company plans to fly Ms. Andersen, 48, to the Bahamas, so that a doctor can prescribe her a four-month supply of Humira that she can pick up at a pharmacy there. Humira is much cheaper in the Bahamas, where the industry has less influence than in [sic] it does in Washington and the government proactively controls drug pricing.
The New York Times article concludes as follows:
Even now, as AbbVie prepares for competitors to erode its Humira sales in the United States, the company will have a new way to make more money from the drug. Under the terms of the legal settlements it reached with rival manufacturers from 2017 to 2022, AbbVie will earn royalties from the knockoff products that it delayed.
That exposes a more subtle issue alongside the obvious problem that drug patents drive up prices. The biosimilars delayed by AbbVie are framed here as knockoff products", as if a company that takes advantage of an expired patent is somehow cheating. It's not, it's how the patent system is supposed to work, but rarely does, as the egregious case of AbbVie and its $114 billion sales since patent expiry shows only too clearly.