Patents play a key role in medical innovation. In the healthcare field, patents cover intellectual property in medicine, including medications, devices, treatment regimens, software, and surgical procedures. Granted by the United States Patent and Trademark Office, patents protect developers of medical intellectual property (“patentees”) by legally preventing infringement by competitors, prohibiting the unlicensed production of the patented idea, item or method for 20 years (1). To be issued a patent, medical intellectual property must be new, useful, and non-obvious (2). If intellectual property satisfies these three criteria, the patentee is allowed legal monopoly and competitors are barred from producing similar products (1). With the first medical patent issued in the late seventeenth century, patents have a complicated history in medicine owing to their benefits for patentees and disadvantages for consumers (3).
Crucial benefits granted by patents to patentees include legal protection and commercial advantage, two key components that the patent system uses to promote further innovation of the patented product (4). The legal monopoly allowed by the patent safeguards the development of the product by essentially allotting the patentee time to refine and perfect the product before introducing it to the market (4). Although patents last for 20 years after filing, research and development in medicine often takes at least half of this time (5). Thus, patents are key in preventing competitors from copying the product and introducing it to the market earlier (5). Additionally, patents can help patentees recoup financial losses from creating the product. Medical innovations such as prosthetic limbs and anti-cancer drugs can take years and millions of dollars to create and refine, and patent protection can enable the patentee to recover those funds once the product hits the market (4). Patents are designed to expire after the product has been created, refined, and introduced into the market, at which point the patented information can be shared with competitors, who can use the innovation in creating similar products (4).
While the advantages of patents benefit the medical industry, the disadvantages of patents affect consumers – the average person. Because patents prevent the development of similar products by competitors, patentees can charge high prices for their products. For example, the patented and unique immunosuppressive drug Humira costs $8000 per dose, resulting in a $200 billion monopoly due to the legal exclusion of similar medications (6). The patent system has also received criticism from health economists for enabling “patent abuse” that prevents the innovation it is intended to protect. By using a strategy known as “evergreening,” patentees add on new patents to their previously patented products to prolong their monopoly (7). In the case of Humira, patentees avoided expiration of the drug’s monopoly in 2016 by filing 75 additional patents for protected minor adjustments that kept the drug patented until 2023 (8). “Evergreening” thus prevents innovation by encouraging only negligible improvements in the patented product itself and excluding competitors from accessing and producing similar products. This form of patent abuse appears most commonly in the pharmaceutical industry — although patents are intended to last 20 years, the top 12 brand drugs typically monopoly for an average of 38 years due to “evergreening” (7). Thus, abuses of the patent system prevent the development and distribution of affordable generic versions of patented products and enable high prices for monopolized products, which hurts consumers (4).
To remedy these disadvantages from affecting consumers while maintaining the benefits of the patent system, health economists argue that additional restrictions must be implemented (9). Thus, economists contend that the three criteria of a patent must be narrowed, especially the “useful” requirement (9, 10). By strengthening this standard, innovations in a patented product must demonstrate more than marginal utility, which could complicate “evergreening.” Additionally, some have argued that some forms of innovations in medicine, such as COVID-19 vaccines, should be supported by government funding, which would safeguard financial losses from the innovation while enabling competitors to create similar products, rather than secured by patents (9). The patent system itself protects innovations by granting patentees time to develop their product and the opportunity to regain financial capital, but abuses of this system by patentees lead to problems for consumers.
1: United States Food and Drug Administration. 2020. Frequently asked questions on exclusivity and patents. FDA. URL: fda.gov/drugs/development-approval-process-drugs/frequently-asked-questions-patents-and-exclusivity.
2: United States Patent and Trademark Office. 2019. Patent subject matter eligibility. USPTO. URL: uspto.gov/web/offices/pac/mpep/s2106.html.
3: Young, J. 1961. The toadstool millionaires: a social history of patent medicines in America before federal regulation. Princeton University Press. URL: jstor.org/stable/j.ctt13x0zs0.
4: Khachigian, L. 2020. Medical patents: reconciling the human right to health with the incentive to invent. Drug Discovery Today 25(7)1135-1141. DOI: 10.1016/j.drudis.2020.04.009.
5: Berger, J., Dunn, J., Johnson, M., Karst, K. and Shear, C. 2017. How drug life-cycle management patent strategies may impact formulary management. American Journal of Managed Care 22(16). URL: ajmc.com/view/a636-article.
6: Robbins, R. 2023. How a drug company made $114 billion by gaming the patent system. The New York Times. URL: nytimes.com/2023/01/28/business/humira-abbvie-monopoly.html.
7: Collier, R. 2013. Drug patents: the evergreening problem. Canadian Medical Association Journal 185(9):e385-386. DOI: 10.1503/cmaj.109-4466.
8: Momenghalibaf, A. 2015. How drug companies and bad parents put lives at risk. Open Society Foundations. URL: opensocietyfoundations.org/voices/how-drug-companies-and-bad-patents-put-lives-risk.
9: Lindsey, B. 2021. Why intellectual property and pandemics don’t mix. Brookings. URL: https://www.brookings.edu/blog/up-front/2021/06/03/why-intellectual-property-and-pandemics-dont-mix/.
10: Stanbrook, M. 2013. Limiting ‘evergreening’ for a better balance of drug innovation incentives. Canadian Medical Association Journal 185(11):939. DOI: 10.1503/cmaj.130992.