Recently, after running an article about Novo Nordisk’s lawsuit against generic drug maker Mylan, BioSpace ran a mini-poll, asking, “Should companies be allowed to sue other companies to prevent generic versions of drugs?”
The topic often rises to the top during discussions of how the government can force drug companies to reduce prices. History indicates that when a generic drug hits the market, competition can push their prices 80% below the brand price, sometimes even lower.
Many high-priced drugs, particularly biologics, have little or no competition. And drug companies have developed numerous strategies to protect their profitable branded drugs from competition, and one of them it to file lawsuits against generic drug companies to delay generic entry onto the market.
In the BioSpace poll, 55.17% of respondents said, Yes, companies should be allowed to sue competitors to prevent generic versions of their drugs, and 41.38% said no. A much smaller group, 3.45%, said they were unsure.
In the Novo Nordisk-Mylan case, the suit is an attempt to block Mylan from marketing a generic version of Novo Nordisk’s diabetes drug Victoza (liraglutide). Victoza was first approved in the U.S. in 2010 in adults with type 2 diabetes. On June 17, 2019, the U.S. Food and Drug Administration (FDA) approved Victoza injection to lower blood glucose levels along with diet and exercise in children and adolescents aged 10 to 17 years with type 2 diabetes. The drug is a glucagon-like peptide-1 (GLP-1) receptor agonist, the first to be approved for this age group.
In 2018, Victoza had U.S. sales of $2.7 billion, accounting for 16.2% of the company’s revenue. Patents expire in July 2021, December 2022, February and December 2023, November 2024, February 2026 and March 2033.
Each time a patent ends, generic drug companies attempt to market a copy of the drug for whatever indication is going to become up for grabs.
This assorted use of patents is common to the industry and legally appropriate. It can be something of a contentious issue on the part of Congress, however. In February 2019, seven pharmaceutical executives were grilled by the U.S. Senate Finance Committee over drug pricing.
AbbVie, which markets the best-selling drug in the world, Humira (adalimumab), is often brought up by critics when it comes to these patent protections, and the February hearing was no exception. It is protected by 130 patents. In 2018, sales for the drug hit almost $20 billion.
In the hearing, Senator John Cornyn (R-Texas) went after AbbVie, saying, “I support drug companies recovering a profit based on their research and development of innovative drugs. But at some point, that patent has to end, that exclusivity has to end, to be able to get it at a much cheaper cost.”
AbbVie’s chief executive officer Richard Gonzalez responded, “That patent portfolio evolved as we discovered and learned new things about Humira.”
For example, the primary patent, the composition-of-matter patent, expired in 2016. But as the company developed the drug for new diseases, it developed patent protection for those indications.
Not long afterwards, in March, the United Food and Commercial Workers Local 1500 (UFCW Local 1500) filed a class action lawsuit against AbbVie for allegedly using a group of patents to maintain a monopoly on Humira. The lawsuit also alleges that AbbVie and several of its biosimilar competitors colluded to split the Humira market between the U.S. and Europe.
UFCW Local 1500 is the largest grocery-worker union in New York State. The lawsuit was filed in U.S. District Court for the Northern District of Illinois.
The suit argues that the union membership and others in similar situations paid artificially high prices for the branded version of Humira, which deprived them of the benefits of significant competition from biosimilars, which are basically generic versions of biologic drugs.
The complaint states, in part, that AbbVie’s patents are “designed solely to insulate Humira from any biosimilar competition in the U.S. for years to come.” It also argues that many of the patents are overlapping and noninventive and were filed as a way to prevent U.S. biosimilar competition by forcing protracted litigation.
The lawsuit also claims that AbbVie entered into “illegal market-division agreements,” according to The Center for Biosimilars, and seven other drug manufactures are co-defendants in the case. They are Amgen, Samsung Bioepis, Mylan, Sandoz, Fresenius Kabi, Pfizer, and Momenta.
The suit claims, “AbbVie has cooked up a monopoly scheme that has U.S. patients paying higher monopoly prices while patients in Europe benefit from competition.”
AbbVie holds approximately 130 patents for Humira. Because of a variety of deals and what the lawsuit dubs a “patent thicket,” the first biosimilar competitor won’t hit the U.S. market until 2023, which will be 20 years after the drug first launched.
Not content to just fight for the union workers, the lawsuit cites the entire U.S. healthcare system, stating, “AbbVie’s scheme to keep out biosimilar competition has cost the U.S. healthcare system billions of dollars. For example, Wells Fargo analyst Davis Maris calculated that AbbVie’s 9.7 percent price hike on Humira in 2018 cost the country’s healthcare system approximately $1.2 billion.”
Amgen, Bioepsis, Mylan and Pfizer have previously settled patent disputes with AbbVie over Humira. The complaint argues these settlements were “illegal market division agreements.”
There are four broad tactics the industry is using to battle biosimilar competition, according to Christine Simmons, executive director of the Biosimilars Council, a division of the Association for Accessible Medicines. They are:
- Gaming the FDA’s Risk Evaluation and Mitigation Strategies. Although designed to protect patients, she wrote in 2018, they “are increasingly used to restrict biosimilar makers from gaining access to samples of brand-name biologics needed for biosimilar development.”
- Patent expansion. Biopharma companies are filing more and more “non-innovative” patents on the drugs they want to protect, forcing biosimilar manufacturers to weave their way through a maze of patent lawsuits.
- Rebate traps. Simmons wrote, “Upon market entry of a competitive biosimilar, some brand manufacturers have threatened to remove the rebates they provide to payers unless the biosimilar is effectively excluded from the market.”
- Distorted marketing. Simmons indicated that some companies are disseminating misleading information or raising concerns about the safety and effectiveness of biosimilars, even though they must go through a stringent FDA testing and review program similar to those for new drugs. However, it has been pointed out that there may still be differences, because of the nature of biologic drugs—based as they are on living systems, they won’t be identical to the branded biologic drugs, but “similar.”
The Novo Nordisk-Mylan case and the AbbVie cases are only a few examples. If a biologic is a big seller, companies will take aim at biosimilars. AbbVie is the target for the most biosimilar competition. At least eight companies have settled lawsuits with AbbVie to wait to launch their biosimilars to the drug until 2023 in the U.S. AbbVie and Boehringer Ingelheim settled in May 2019. In Europe, at least four have already launched, and some discounts are as high as 80 percent in some of the Nordic markets.
Earlier this year, Genentech filed at least 18 lawsuits to prevent competitors from launching generic versions of Esbriet (pirfenidone) for idiopathic pulmonary fibrosis (IPF), a progressive, irreversible and ultimately fatal disease caused by scarring of the lungs, which eventually prevents the patient from breathing.
There is only one other drug approved for IPF, Boehringer-Ingelheim’s Ofev (nintedanib). Genentech’s wholesale price for Esbriet is $100,000 per year, and 2018 sales are expected to hit $1 billion. Ofev has a similar price, about $96,000 per year.
In December 2018, several generic drug companies filed abbreviated new drug applications (ANDA) for Esbriet. The San Francisco Business Times noted at the time, “Those companies aren’t required to go through the intensive, three-phase drug-development process that InterMune did as the original drug developer. (Esbriet was rejected by the FDA before a new clinical trial helped it win approval.) Instead, they can piggyback on the branded drug’s clinical data and can claim the branded drug’s patents are invalid, unenforceable or won’t be infringed by the generic.”
Biopharma companies are doing what companies are expected to do, particularly if they are public corporations—maximize profits. And part of that is to protect their best-selling drugs with whatever legal strategies they can come up with.
The public and payers, including government payers, of course, want the same highly effective, innovative drugs to be available at as low a cost as possible while still allowing companies to be profitable enough to develop and manufacture more cutting-edge drugs.
In that respect, there’s a definite philosophical tension built into the system that can be extremely frustrating for both groups. Patent battles are only one aspect of how biopharma companies approach their goals, while lawmakers, despite their complaints about this, are cautious about undermining the patent system that is part of the U.S. and world’s economic infrastructure important to protecting intellectual property and stimulating innovation.
