WEBVTT 1 00:00:00.580 --> 00:00:04.580 There are three main methods that I'm interested in that deal with patent 2 00:00:04.940 --> 00:00:09.940 practice, since I'm a patent law person. Broadly, they're evergreening, 3 00:00:10.289 --> 00:00:12.980 patent thicketing, and product topping. 4 00:00:13.000 --> 00:00:17.820 Evergreening is where you get a new patent that basically extends the life of 5 00:00:17.821 --> 00:00:19.620 your original patent. For example, 6 00:00:20.620 --> 00:00:24.780 albuterol has been used for asthma patients since the 1980s, 7 00:00:25.221 --> 00:00:29.300 and the patents on that drug have long expired. However, 8 00:00:29.330 --> 00:00:34.260 drug companies have patented the devices that are now used to deliver 9 00:00:34.580 --> 00:00:39.020 albuterol. They patent things like the dosage counters, the dispensers, 10 00:00:39.021 --> 00:00:43.620 the nozzles, the canisters, the valves, the list goes on and on, right? 11 00:00:43.621 --> 00:00:46.380 Basically anything that they can patent, they're patenting. 12 00:00:46.630 --> 00:00:50.940 And I can't blame them because if even one patent delays or prevents generic 13 00:00:50.941 --> 00:00:53.100 entry, it will pay for itself. 14 00:00:53.240 --> 00:00:56.580 The second thing that I'm interested in is product topping. 15 00:00:56.580 --> 00:01:01.060 This is where firms will try to get patients to move from drugs with expired 16 00:01:01.061 --> 00:01:04.340 patents onto drugs that are new, 17 00:01:04.341 --> 00:01:08.540 drugs that have patent protection and are higher priced. 18 00:01:08.560 --> 00:01:11.780 The third strategy is called patent thicketing. 19 00:01:11.781 --> 00:01:15.540 This is where you get many patents directed towards the same product. 20 00:01:15.541 --> 00:01:18.620 These patents may expire at the same time, 21 00:01:18.620 --> 00:01:22.420 so it's really not about extending the life of the patent, 22 00:01:22.650 --> 00:01:27.340 it's about increasing transaction costs for generics to get onto the market. 23 00:01:27.781 --> 00:01:32.580 It's one thing to have to invalidate one or two patents before I can go to the 24 00:01:32.580 --> 00:01:32.581 market, 25 00:01:32.581 --> 00:01:37.500 it's a completely different thing to have to invalidate 12 or 15 or 26 00:01:37.501 --> 00:01:40.780 sometimes even a hundred patents before I can get to market, 27 00:01:40.781 --> 00:01:42.819 even if these patents are very similar. 28 00:01:43.740 --> 00:01:46.940 The Humira patent thicket consists of over a hundred patents. 29 00:01:47.650 --> 00:01:50.380 They don't allow this kind of gamesmanship in Europe. 30 00:01:50.381 --> 00:01:54.660 There are much fewer patents on Humira in Europe. And guess what? 31 00:01:54.850 --> 00:01:59.180 They already had biosimilars to Humira on the market two years ago. 32 00:01:59.830 --> 00:02:02.980 You might say, "Well, it's not a big deal. 33 00:02:02.981 --> 00:02:05.620 It's only two years." With that said, 34 00:02:05.621 --> 00:02:09.300 this drug costs about $80,000 a year per patient, right? 35 00:02:09.430 --> 00:02:13.780 So AbbVie has made over $21 billion on this drug 36 00:02:14.501 --> 00:02:15.780 in just 2021. 37 00:02:16.070 --> 00:02:20.220 That amounts to about $57.5 million a day. 38 00:02:21.070 --> 00:02:25.260 So even a day's worth of delay really causes problems. 39 00:02:25.350 --> 00:02:29.460 The article that we recently published in the New England Journal of Medicine 40 00:02:29.461 --> 00:02:33.460 has shown that there's been a real increase in the number of these, 41 00:02:33.461 --> 00:02:38.220 what are called 'method of use' patents. In the last 20 years, 42 00:02:38.221 --> 00:02:41.500 it's really gone up from 2,000 to 8,000 of these things. 43 00:02:41.840 --> 00:02:46.700 Manufacturers have overcome these patent thickets based on these 44 00:02:46.701 --> 00:02:50.020 method of use patents by creating what's called a 'skinny label'. 45 00:02:50.661 --> 00:02:55.180 So if you have a drug that has patents that protect the use of -- 46 00:02:55.301 --> 00:02:59.790 let's say drug X for diabetes. If that patent expires, 47 00:02:59.791 --> 00:03:04.510 then I should be able to use drug X for diabetes. Then, 48 00:03:05.480 --> 00:03:09.270 if the manufacturer comes up with a new use for that same drug -- 49 00:03:09.271 --> 00:03:12.270 so drug X is now used for cancer -- 50 00:03:13.030 --> 00:03:16.910 Congress understood this problem and created a system by which you could carve 51 00:03:16.911 --> 00:03:20.870 out the old indication in the label. So in this example, 52 00:03:20.871 --> 00:03:24.710 the generic firm would create a label that said you can use this drug for 53 00:03:24.950 --> 00:03:27.190 diabetes and not mention anything about cancer. 54 00:03:27.340 --> 00:03:32.230 This skinny labeling pathway is under threat because generic firms have to 55 00:03:32.231 --> 00:03:32.911 copy. 56 00:03:32.911 --> 00:03:37.510 They're mandated by the FDA to use very similar language to the drug that 57 00:03:37.990 --> 00:03:41.870 is already out there. So, now brand manufacturers are saying, 58 00:03:42.170 --> 00:03:46.990 "You violate my new patent because you copied my old label." The 59 00:03:47.191 --> 00:03:51.790 weird thing is the FDA forces the generic company to use labels that are very 60 00:03:51.791 --> 00:03:56.670 similar to the brand. And the brand, mind you, controls the label, 61 00:03:56.671 --> 00:03:59.190 right? So if I'm a smart brand company, 62 00:03:59.370 --> 00:04:03.030 I'm going to try to make the label look like it covers the new cancer 63 00:04:03.031 --> 00:04:07.470 indication, and the generic company has to copy that label. And if they do that, 64 00:04:07.471 --> 00:04:09.870 then I'm going to sue for induced infringement. 65 00:04:10.130 --> 00:04:13.830 How does this tie into the most recent New England Journal paper that we 66 00:04:13.831 --> 00:04:14.431 published? Well, 67 00:04:14.431 --> 00:04:19.190 these thickets are comprised in large part by these method of use patents. So, 68 00:04:19.430 --> 00:04:23.550 we're starting to see that patents are being listed for all sorts of 69 00:04:23.551 --> 00:04:27.510 indications. If It was the difference between diabetes and cancer, 70 00:04:27.820 --> 00:04:29.350 that's a good thing, right? 71 00:04:29.350 --> 00:04:33.630 We want people to find really new uses for old drugs. 72 00:04:33.760 --> 00:04:38.110 However, these methods of use are very similar to each other. 73 00:04:38.111 --> 00:04:42.910 For example, Vascepa, which is basically fish oil, 74 00:04:42.911 --> 00:04:47.790 right? It has 67 patents associated with 40 different 75 00:04:48.311 --> 00:04:51.750 unique use codes, 69 use codes are associated with it in total. 76 00:04:51.980 --> 00:04:55.550 Here is just an example of these different method of uses. 77 00:04:55.600 --> 00:05:00.230 "A method of reducing triglyceride levels in patients suffering 78 00:05:00.470 --> 00:05:05.310 from severe hypertriglyceridemia." Basically, 79 00:05:05.360 --> 00:05:07.990 if you've got really high triglyceride levels, 80 00:05:08.100 --> 00:05:12.150 this drug will help lower your cholesterol levels. The second use is: 81 00:05:12.151 --> 00:05:16.950 "The method of reducing triglyceride levels in patients on statin 82 00:05:16.951 --> 00:05:17.470 therapy, 83 00:05:17.470 --> 00:05:22.470 suffering from severe HTG." The third use is: 84 00:05:22.471 --> 00:05:26.830 "The use of Vascepa to lower triglycerides and low density 85 00:05:27.130 --> 00:05:31.750 lipoproteins in adult patients with elevated triglyceride levels." These 86 00:05:31.751 --> 00:05:33.990 indications are very similar, right? 87 00:05:34.050 --> 00:05:39.029 You can imagine it would be hard to create a label that carves out 88 00:05:39.030 --> 00:05:40.310 one but not the other. 89 00:05:40.740 --> 00:05:45.350 Unless Congress or the Supreme Court steps in, 90 00:05:45.870 --> 00:05:50.270 this skinny label attack will likely increase. Why is this bad? 91 00:05:50.271 --> 00:05:52.830 Because we won't get generics on the market as quickly, 92 00:05:52.900 --> 00:05:56.190 especially since it's fairly easy, like I just showed you, 93 00:05:56.191 --> 00:06:00.640 to get a lot of patents on new methods of uses that really aren't that different 94 00:06:00.641 --> 00:06:01.390 from each other. 95 00:06:01.390 --> 00:06:05.160 I don't think things are going to get better unless people really start getting 96 00:06:05.161 --> 00:06:06.600 mad at these crazy prices. 97 00:06:06.840 --> 00:06:11.600 Ben Rome has done a great study showing that the average launch price of a drug 98 00:06:11.601 --> 00:06:14.800 was about $2,000 in 2008, which is still pretty high, 99 00:06:14.801 --> 00:06:19.720 but in 2020 almost 50% of the 100 00:06:19.721 --> 00:06:23.360 drugs that launched were at $150,000. 101 00:06:24.250 --> 00:06:26.560 That is absolutely insane to me. 102 00:06:26.561 --> 00:06:31.360 We're transferring a huge amount of wealth from the public to 103 00:06:31.361 --> 00:06:32.194 drug companies. 104 00:06:32.680 --> 00:06:36.480 Employers are going to have to pay higher insurance premiums for these drugs. 105 00:06:36.481 --> 00:06:41.080 Taxpayers are going to have to pay higher taxes for Medicare and 106 00:06:41.320 --> 00:06:42.520 Medicaid to cover these drugs. 107 00:06:42.820 --> 00:06:46.240 And I understand these drugs are hugely important. Literally, 108 00:06:46.241 --> 00:06:48.120 some of them are lifesaving. However, 109 00:06:48.670 --> 00:06:52.760 I think drug companies are getting wise to the fact that they can really charge 110 00:06:53.040 --> 00:06:54.880 whatever they want. If I asked you the question, 111 00:06:54.881 --> 00:06:59.080 "How much are you willing to pay to live?" I think the answer would be, 112 00:06:59.140 --> 00:07:03.000 "All of the monies. All of it, all of my money! 113 00:07:03.001 --> 00:07:07.960 I want to live." Drug companies have been increasing the prices to a level that 114 00:07:07.961 --> 00:07:11.360 really isn't sustainable, and frankly, it's not justified. 115 00:07:11.641 --> 00:07:15.000 When we make these huge payouts to drug companies, 116 00:07:15.290 --> 00:07:18.440 we have to give up other things. We give up funding for education, 117 00:07:18.441 --> 00:07:20.360 we give up funding for infrastructure, 118 00:07:20.361 --> 00:07:23.600 we give up funding for social security. 119 00:07:24.050 --> 00:07:25.880 If you want to think about it on the other side, 120 00:07:25.881 --> 00:07:28.320 we give up funding for the police, funding our military, 121 00:07:28.321 --> 00:07:30.400 or even being able to pay down our own debt. 122 00:07:30.770 --> 00:07:34.440 This shouldn't be a Republican or Democrat issue. 123 00:07:34.441 --> 00:07:38.320 Both parties should be fighting against these high costs. 124 00:07:38.580 --> 00:07:41.640 One interesting solution that is very, 125 00:07:41.641 --> 00:07:43.600 very recent is being set up by California. 126 00:07:43.890 --> 00:07:48.440 California is getting into the drug manufacturing business 127 00:07:48.530 --> 00:07:50.840 because these costs are just getting too high. 128 00:07:51.170 --> 00:07:52.920 I would love to see the government getting 129 00:07:54.600 --> 00:07:57.960 involved into the manufacturing business for drugs. 130 00:07:58.090 --> 00:08:01.600 These are classic public goods. You know, if the government did this, 131 00:08:01.830 --> 00:08:06.320 then we might have fewer drug shortages. We might have lower drug prices. 132 00:08:06.321 --> 00:08:07.760 Overall, of course, 133 00:08:07.761 --> 00:08:11.440 I think the industry will fight tooth and nail to keep government out of their 134 00:08:11.680 --> 00:08:12.960 business. With that said, 135 00:08:13.110 --> 00:08:17.800 I think that that's a much better long-term solution than what we 136 00:08:18.080 --> 00:08:18.640 have right now.