Jul 30, 2025
On July 22, The Capitol Forum held a conference call with Tahir Amin, co-founder of I-MAK, for a conversation on I-MAK’s new report “Overpatented, Overpriced” and how pharmaceutical companies use the patent system to delay generic competition and sustain high drug prices. The full transcript, which has been modified slightly for accuracy, can be found below.
TEDDY DOWNEY: Good morning, everyone. And welcome to our Conference Call on Patenting and Pricing Medicare-Targeted Drugs. I’m Teddy Downey, Executive Editor here at The Capitol Forum. And we’re joined by my all-time favorite patent expert, Tahir Amin, Co-Founder of I‑MAK, for a conversation about how pharmaceutical companies use the patent system to delay generic competition and sustain high drug prices.
We’re going to be talking primarily about I-MAK’s new report, “Overpatented, Overpriced.” They also have a new drug patent book database, which is incredible. Tahir, thank you so much for doing this today.
TAHIR AMIN: I appreciate it, Teddy. It’s always a pleasure to join you to talk about these things.
TEDDY DOWNEY: And before we get started, quick reminder, if you have questions during the call, type them into the questions pane on the control panel. Or you can email us at editorial@thecapitolforum.com. We’ll try to get to your questions toward the end of the conversation.
And let’s just get into “Overpatented, Overpriced.” You look at some specific drugs. Maybe you can just give us the background of how you came up with that idea and sort of why now for these particular drugs. And then I would love to go from there and get into the specific tools that the companies use to sort of protect themselves against competition.
TAHIR AMIN: Yeah, thanks for making that the opener. Because it takes us back to 2018 when my organization, we basically wanted to sort of unpack what was the patenting situation around a lot of these top-selling drugs in the United States?
And so, back in 2018, we looked at the top-selling drugs in, I think it was 2017, 18 at that time. And what we found was the numerous patents, dozens, even hundreds of patents, that were surrounding some of these top‑selling drugs. I mean, obviously, some of the listeners, and I know you do, Humira was one of those drugs which became the poster child of where drug companies, in this case AbbVie, are able to amass hundreds of patents and then use them in litigation to beat off the competition, to make them surrender in court and delay entry. In that case, it was a biologic drug, so biosimilars.
And that really then put us on this trajectory of like, how do we help sort of tell the story of what is going on in the patent system? And it was out of that, that basically we ended up with this latest version of what we did in 2022. And that’s when we first released the database that you mentioned in the opening.
And we’ve just updated that now with ten more drugs, many of which, I think, all of them are actually, were in the last round of negotiations for the Inflation Reduction Act. And then we’ve also included the drugs Ozempic, Wegovy, and Rybelsus, which were part of the current negotiation round for the Inflation Reduction Act.
So, this database now holds 20 pharmaceutical products, which are some of the best-selling ones in the United States. And we have identified all the patents that we can identify that relate to these drugs. And that’s not to say that it’s an exhaustive list, because anybody who’s worked in the patent profession or is familiar with it, sometimes it’s very hard to find what patents relate to which drugs. Because the way they’re written, as a lawyer that’s worked in the intellectual property space, lawyers deliberately obfuscate terms so that examiners can’t find them, so that anybody searching can’t find them.
And then when you get into the biologic sector, which many of the top‑selling drugs are today, then the technicalities get even more difficult and sort of very close wording nuances make a difference, whether a patent covers a drug or doesn’t cover a drug. And so, sometimes it becomes very subjective, and that’s why we end up in court.
So, that’s how really this whole project came about. And then what we did with this latest report, which came out a couple of months ago, was to then pick two of the drugs that were part of the negotiation rounds last year. And that’s Eliquis and the drugs that are going to go into the next round of negotiation, Ozempic, Rybelsus and Wegovy. And it’s really just to tell a story of how the patent system is skewing both how we get generics into the market, but also how it’s skewing the negotiations that are taking place in the Inflation Reduction Act.
Because essentially, the drug Eliquis, for example, has been generic in Europe since 2022. Yet, here we are negotiating a drug to lower the price on a patent that’s still under patent in the U.S. And we can get into perhaps the reasons why it’s still under patent. Perhaps that’s your next question.
But that was the whole purpose is to really show like, yeah, we’ve made some moves. We’ve made some progress with the Inflation Reduction Act. For the first time, the United States is now negotiating drug prices like rest of the industrialized world in the global North. But is it enough? And is the patent system still making us pay more even through those negotiations?
TEDDY DOWNEY: Yeah, I’d love to get into some of the specifics of the strategies for these drugs that you looked at, Eliquis, Ozempic, Rybelsus and Wegovy. Let’s just go down the list or whatever is easier for you, by drug or by list.
But you mentioned patent term extensions. I’m familiar with follow‑on patenting and patent thickets. You’ve written about that before. Maybe you can walk us through patent term extensions and how that specifically is coming up with these drugs.
TAHIR AMIN: Yeah, I think patent term extensions is this thing that we’ve, I mean, for anybody who’s not familiar with the space or probably has no idea what we’re talking about – people get confused between, oh when we hear companies are extending patents. Well, how do they extend patents?
You’ve mentioned the follow‑on patents. So, these are patents which are filed after the main patent. So, just to bring it to basics, when a company is doing its research and development, it will file the initial patent that may then go on to become the underlying patent for a product.
So, let’s, for argument’s sake, say it’s the compound, the main compound, and that is filed and you get 20 years of patent term typically. So, what happened in the 70s and 80s, companies were saying, well, by the time we go through research and development, we only have X number of years left of that main patent. So, for example, let’s say it takes me as a company, eight to ten years to develop my drug through the process, get it approved by the regulatory authorities. Then I only have 10 years of market exclusivity where I sell the product.
And so, there was this bargain that was struck and it was a system of allowing generics into the market in the United States in the 80s. There was a massive bill which kind of changed the patent landscape dramatically. It’s called the Hatch-Waxman Act, which some of your listeners may be familiar with. It was 1984.
And there was this bargain that was struck. There was a trade-off. Generics could come into the market without having to do the full clinical trials, which was how it used to work previously. They could just do the sort of phase three bioequivalence to show that their product is equivalent with the first branded product. And they could also challenge some of the patents in order to get into the market if the patents were weak.
And in return, the branded company said, well, we want to lengthen, at least have a more guaranteed longer exclusivity period. So, there was this trade‑off where patent term extension would give up to five years of an extended period of the main patent of the underlying active ingredient. And at least they would get 14 years. The guarantee was you’d get up to 14 years of patented exclusivity.
But in addition to that, companies were also given, the branded companies, when they do their first new drug filing or application, in the small molecule space, they get five years of market exclusivity. Not many people often talk about that. We always get so focused on the patents.
But this five years guarantees the drug company a pure monopoly. Nobody can contest it. And it’s a pure monopoly.
And then running alongside that five years is the patent, the main patent still. So, usually there’s still some life left on the main patent by the time the market exclusivity ends, depending on how long approval took.
And then in addition, for every new indication, for every new dosing, you get three years of clinical investigation exclusivity. So, these were all incentives that were built in, in the 80s, to help drug companies kind of do all these kind of tweaks and modifications and all this follow-on patenting that you see today. But they get market exclusivity. But yet, they were still doing all the follow-on patenting.
So, what you have then is you have these overlapping extension systems. There’s many different ways that companies can extend their patent.
So, let’s talk about Eliquis, for example, one of the drugs we look at. The main patent on Eliquis was filed around 2002. So, by traditional sort of patenting terms, you get 20 years from 2002. That patent should come off in 2022.
But because of some regulatory delays and this agreement, this trade-off that was made in the 80s, BMS were given an extra four years. So, now the patent expires in 2026. So, we can’t get generics in.
In addition, BMS filed all sort of follow-on patents, and they’ve utilized one of those follow-on patents in courts to prevent generics coming in until at least 2028.
Now, we haven’t seen the settlement. We don’t know if there’s a settlement yet. And it might be that some generics might not be able to come in on 2028 either. We might only get one entrant, and that usually means the prices are not going to come tumbling down. FDA studies have shown if you get more than six entrants in, prices can come down up to 95 percent.
So, competition is an interesting term. People like to say, and I think there’s a misleading way of describing competition when branded companies say, one generic has come in. That’s not going to bring the price down. Competition is when you’ve got three or four. They usually say, rule of thumb, five.
And then with settlement agreements, what kind of settlement agreement is it? Because if it’s limited volume that a generic can supply over the first six, seven years, which is what companies are doing now, that’s not competition. But yet we’re often sort of kidded into thinking that’s competition.
Not to digress, in Eliquis’s case, in that extra four years of patent term extension – so, I’m not talking about the follow‑on patents, just the patent term extension, which is a statutory patent term extension – we estimate BMS will make $39 billion. So, we’ll be paying BMS for that branded version, $39 billion.
And then if you add on the follow-on patent that they’re using in court, which gives them another year and a half or something, that’s another $11 billion. So, overall, BMS is eking out an extra $50 billion in revenue because of the extension and the follow-on patent.
TEDDY DOWNEY: And ostensibly, this patent term extension in the Hatch‑Waxman Law was sort of a fig leaf to the industry. Hey, look, we want to make sure that your amount that you get is sufficient to attract investment. But what you’re saying is, not only was that $39 billion not enough, they’re doing more conduct afterwards to also keep competition out. They’re not saying, oh, you know what? That $39 billion, that’s enough. That’s part of this statutory deal that we had. They want more. Is that the right way to think about that?
TAHIR AMIN: It is. And I’m probably making a bad sort of reference here. It reminds me of the the Rolling Stones, “Can’t Get No Satisfaction.” That’s what these guys are. They just can’t get no satisfaction. If you look at it historically over the years, they pushed and pushed and pushed for more and more and more and more.
And that’s what’s happening right now. And they will continue doing that because they’ll keep using the “innovation argument” that we need more incentives to kind of be incentivized to do the actual R&D. And they’re not even—as we’ve shown in another report we’ve done, and we’ll get into Ozempic, Wegovy, and Rybelsus, Novo Nordisk—they’re not even spending all their money on R&D, as they claim. They’re doing share buybacks. In Novo Nordisk’s case, they spend more on share buybacks than they do on R&D, according to our understanding. And that’s been a common business practice now since the 80s when all this really kind of kicked off.
So, this bargain that was struck in the 80s was to kind of drive more investment, as you said. That’s how the whole economy around intellectual property was kind of, that was the agreement. But now, with the sheer financialization, which is where basically it’s all about shareholder value, that has become the dominant factor. And it’s not R&D, which is what this whole agreement was supposed to be about.
TEDDY DOWNEY: And maybe the best way to do this is just focus on Eliquis and just go through everything there. Were there any other jarring follow-on patents, patent thickets, or other conduct that’s sort of like legal shenanigans or legal strategies to fend off competition, that stick out to you that we can talk about? And then once we’ve talked about that, we can move on to the Novo Nordisk stuff.
TAHIR AMIN: No, I think at the moment, as we see it is, it’s the patent term extension, which takes them to 2026. And then they’re utilizing one patent. But we found they have up to 40 patents on the drug, even though only three are listed on the Orange Book. A lot of people like to point out, as our critics say, well, there’s only three on the Orange Book. But they have the whole arsenal.
Sometimes patents that are not on the Orange Book can still be asserted in litigation. People often forget about that. Even though the Orange Book patents are usually the ones that seem to be of more value. There are a number of cases out there where companies will assert a patent that’s not on the Orange Book.
And people need to remember, not every patent has to be listed on the Orange Book. The FDA itself says that you should actually do a full rigorous due diligence to see all the patents because the Orange Book only lists a limited number of patents that are required under statute.
TEDDY DOWNEY: How did they have standing in court to fend off competition when the patent is not listed in the Orange Book? I thought that was the whole point of the Orange Book is to make it so that if you want to enter, you could just look at that and say, hey here’s what I need to focus on.
I mean, I should talk to David, my colleague here, obviously. I wish he was on this call with us. He knows the answer to that. But even though I’ve read a lot about the Orange Book the past few years, I still am a little bit confused as to how you could use that in litigation.
So, I’m interested to hear, they have 43 in the Orange Book. What are the other 37 doing? Like, how does that present a risk to a generic wanting to enter?
TAHIR AMIN: Yeah, so there are three listed on the Orange Book. And then we’ve counted several others. They haven’t used them as yet, as far as we know in the courts. But we know from other drugs, other cases, where companies have used non-listed patents on the Orange Book.
For example, Celgene, in relation to the drug Revlimid, the cancer drug, they asserted a different crystalline patent, which wasn’t on the Orange Book against one of the potential competitors. And they are able to do that. It just goes outside of the Hatch-Waxman system. And as long as they can claim there’s infringement of a patent, it doesn’t always have to happen within the rubric of the Orange Book, at least as far as I’m aware.
But, of course, paragraph 4 litigation is usually where a lot of the game is played. But if a company feels that there’s another patent that they have in their arsenal that they can use to delay a competitor, they’re going to use it.
TEDDY DOWNEY: Let’s go onto Novo Nordisk in a second. But this just seems like beyond a broken system. If you can just come up with all sorts of ways to prevent competition, even go outside of the framework that Congress set up to facilitate generic entry, are we just at the point where this system is just so broken it needs reform? Or are there things that—obviously, this negotiation has been allowed for drugs, you can have the government negotiate on prices now for limited number of drugs. But what can happen to sort of either narrow the problem to address some of these specific problems that you’re seeing? Or do we need comprehensive legislative reform because Hatch-Waxman is just not a reasonable way to facilitate entry?
TAHIR AMIN: I think your latter point. I think Hatch-Waxman needs to be essentially—we need to really start again with the bargain that was struck. I think it’s out of date. I think the way the pharmaceutical companies have gamed it through various strategies, whether it be the follow on patenting, in addition to the patent term extension, which was supposed to appease them, and the settlements that they have, that strategy, maybe filing patents, or using patents in litigation, which are not even listed on the Orange Book. The list goes on.
And I think we have to look at what are the consequences of the system as it is today. Blockbuster drugs today, compared to what they were back in the 80s. I mean, let’s talk about Wegovy, Rybelsus, and Ozempic. In our finding, the main patent—so a similar story to Eliquis—the underlying patent, the main patent, which was filed in 2006, should technically come off in 2026, according to that 20 year period.
But because of the patent term extension, this bargain under Hatch‑Waxman, they got granted another five years because of the regulatory delay and what have you. They filed a whole bunch of other patents. By our counts, we’ve identified 320 patent applications of which 154 have been granted, 49 of those are on follow‑on. So, new indications, formulations.
Because the drug, the underlying active ingredient, Semaglutide, is a bit of a Swiss army knife, because it’s got so many potential uses. It’s still the same active ingredient. And many of these uses are being identified just by serendipity, because it was originally for diabetes. They recognized that people were losing weight. So hey, let’s just file another patent. So, none of this is real R&D.
Sometimes people use these things off-label. Physicians try them out. And then the drug companies get wind of it and say, okay, that might be a good idea for a patent. And so, that all gets bucketed into R&D. Of course, somebody has to develop drug trials and stuff. But what is a patent for? It’s supposed to be novel and non-obvious, not because you found out that you already know the mechanism of action.
But anyway, in that extra five years that Novo Nordisk got through the patent extension, we projected, based on earnings and forecasted revenues, they’re going to make $166 billion in revenue.
Now, when I look at that figure, and I look back at what people thought in the 80s, I wonder if they actually thought that was the kind of numbers we’d be looking at, in terms of today’s market. And that, to me, tells me why we need to go back to the point we were discussing, why we need to look at Hatch-Waxman.
TEDDY DOWNEY: $166 billion just from the patent extension, not from all those other–
TAHIR AMIN: Not from all the other patents, no. Not for the fact that they’ve spun out a different branded version for obesity, Wegovy, which is the same underlying active ingredient. They filed a whole—they changed the dose. They’ve got patents running until 2039 or something. I mean, some of the patents run until 2042. Whether they’ll realize that full extent, probably not. But they’ll use it in litigation to get as much as that time in their favor, which is what happens.
And so, yeah, $166 billion that we’re going to be paying on this branded version before competition can enter. That, to me, strikes me as like, did our legislators at the time even have—I mean, they probably didn’t have the—they couldn’t see the future. So, what is it that we can’t address that now?
TEDDY DOWNEY: One of the things with these Semaglutides is sort of a cheat code or a—what we’ve seen is these compound pharmacies sort of saying, well, there’s a shortage and kind of taking some shortcuts to provide people with a lower cost option. Obviously, that’s arguably (a) against the law and (b) not really a solution. But are you seeing that?
I mean, because this $166 billion number is just so huge and because these costs are so sort of astronomical, have you seen more—I mean, that’s obviously one shortcut. Are you seeing more of that?
And how is that coming into the patent discussion? Are you expecting just a wave of patent litigation? Or as a person watching this, that’s obviously not really a solution, but it’s something that’s come up. And I’m curious to get your thoughts on how that factors in here.
TAHIR AMIN: Yeah, it’s been interesting watching this compounding phenomena, you might say, around these drugs. Because these drugs are being—so many people have been desiring them, to use them for different purposes. And the compounding stuff, as far as I’m aware now, is the FDA had said, because there was a shortage, because companies like Novo Nordisk and Eli Lilly—these are GLP-1 drugs, in case anybody’s not familiar with them. Eli Lilly’s is Tirzepatide, which is Mounjaro and Zepbound. And Novo Nordisk’s three drugs are Ozempic, Wegovy and Rybelsus, originally used for diabetes. And the compounding was allowed because there was a shortage, particularly for the weight loss use. But the FDA has shut that down now.
So, now we’re seeing litigation happening where the Novos and the Eli Lilly’s are suing some of these compounders. And so, the availability now has become, has shrunk again. And I’ve spoken to various people. I did a podcast a couple of weeks ago, or a month ago, with some ladies who are taking the GLP drugs. And then all of a sudden, the compounding versions have gone. And they’re struggling now to get these drugs.
And so, it’s a real problem. And so, now we’re all at the mercy of Novo Nordisk and Eli Lilly, because the FDA has removed what was a kind of ability for compounders to come into the market to meet the need. Now that’s being stopped saying, because Novo Nordisk and Eli Lilly have ramped up production, allegedly.
TEDDY DOWNEY: And it’s interesting that that could be a tool if the companies ever sort of artificially limit the supply, potentially. But obviously, again, not a real solution. And it’s interesting that we haven’t even talked about bundling and tying and the PBMs. We’re just talking about the patents.
But if you are able to get through that patent thicket after the patent term extension, which, as you point out, can now be worth over $166 billion. That’s just such an eye-popping number. It does seem a little extreme.
But let’s say you do get through all of that. And then you have to deal with the PBMs and any kind of exclusive contracts or exclusive dealing to prevent you from getting on the formulary. So, if you’re a generic company, this seems like a real feat. You’ve got to be a real gymnast to jump through all these hoops here.
And I’m curious, one of the things we look at, and I see in the press a lot, well, there’s a patent cliff coming. There’s a patent cliff coming. To your point, that’s really the start of this process, right? When you get to court and then you have to deal with the PBMs and you need five competitors, not one.
I’d love to get your thoughts on what we see when there’s a patent cliff. And then also some of the stories about—you mentioned something I’m not quite familiar with, with the settlements that, the novel ways that they’re coming up with settlements with generic companies that prolong, oh, you’ve got volume limits? I’m not familiar with all the sort of innovative legal strategies that are being used here in these settlements.
But if you can talk about those a little bit, and then just the difficulty of getting a real patent cliff the way that Hatch‑Waxman was envisioned, that would be interesting to chat about.
TAHIR AMIN: Yeah, can I just sort of start with the term patent cliff? That’s a pretty recent kind of term that’s come about in the kind of early 2000s. I don’t know if any of you use Ngram, I think it’s called, the Google thing, which tracks word usage over time, I don’t know what you call it, Ngram or something. And if you type in the word patent cliff, you’ll see that there’s a flat line until about 2000. And then all of a sudden, it just spiked.
And I’m fascinated by language, because language is what shapes culture. And we have been shaped by this language of patent cliff, which is supposed to signal this doomsday, that we’re all supposed to feel bad for companies. All of a sudden, they’re going to lose billions of dollars that they’ve been making through exclusivity, through monopoly. And now it’s all over.
TEDDY DOWNEY: It’s funny you see it as bad. Because I just think about it as the price going down, right? Like I just see it as, well, the price is going to become affordable. So, patent cliff, I’ve always associated intellectually as a good thing. But you’re saying no, no. That’s like a Wall Street term of like the doomsday.
TAHIR AMIN: It is.
TEDDY DOWNEY: How do you fight off doomsday?
TAHIR AMIN: Yeah, it’s a term that has entered our sort of lexicon and has shaped how we feel about this. Oh, that’s not good. And then, oh, that makes us feel some kind of sensibility to, oh, well, these companies have to do something about that. And here we go. And then they do all these shenanigans, whether it be follow-on patterns. And all this is mapped out to your question of they’re already looking ten years ahead of what’s coming down the line.
I mean, it’s like look at, for example, the drug Keytruda, which is the best‑selling drug at the moment. I think the GLP ones, these weight loss drugs are going to surpass it given the estimates. But at the moment, Keytruda is like the best-selling cancer drug. It’s got so many more indications than ten drugs put together.
The CEO, Rob Davis, who I happened to have the fortune of testifying last year in the health committee, he was asked by Senator Ray Lohan, saying basically when their main underlying pattern on the main molecule is supposed to expire in 2028, will you allow biosimilars on the market? And he gave a very nuanced answer, which not many people picked up at the time. He said, yes, we will. But he didn’t mention the fact that they’ve already planned to switch to a subcutaneous form, which is an injection, as opposed to the IV version that’s currently on the market. And they already have patents lined up for that, which will extend it out to 2039.
So, these plans are made out. It’s called lifecycle management, which I’m sure some of your listeners are familiar with. It’s, again, another term that’s entered our culture and business culture of basically keeping a popular product, its franchise, going for as long as possible. And you do these tweaks, and you use every loophole.
And this is written in books by lifecycle management strategists. They say this out very openly. Companies say it openly. And in the case of Merck and Keytruda, Rob Davis, the CEO, on an earnings call said, we’re going to switch 35 percent to 40 percent of the patients over to subcutaneous. That means then the clock starts again under the patent for that.
And this is the avoidance of the patent cliff that we’re talking about. And he called it. Well, it’s not going to be a patent cliff. It’s going to be patent hills. And Merck has filed, at least by our count, up to 300 patent applications on Keytruda, of which 100 have been granted. And I think it’s probably more than that, because trying to figure out which is what is a really tall order.
So, this is the patent cliff model now. And this is what we have to deal with. And this is why we have to start addressing these tactics, what you’ve said in relation to Hatch-Waxman, but also in the biologic sector, where it’s even more rampant and much more severe.
TEDDY DOWNEY: And let’s talk about solutions. Obviously, there are some potential solutions. You look a lot at Medicare data. Some of these tactics are being addressed little by little. Obviously, the FTC went after all the improper Orange Book listings. That’s one small piece or big piece, depending on the drug. There’s PBM reform that have moved through Congress and are constantly being threatened about in Congress. And there’s FTC litigation on PBMs.
But when it comes to patents, where is the Patent Office? What has come out of the Patent Office? I know you’ve done some work on a paper that came out of the Patent Office last year related to some of the data that you’d put out. What’s going on now? Where should we be looking as interested stakeholders? And how will there be improvements and fights related to this broken patent process, broken Hatch-Waxman process?
TAHIR AMIN: Yeah, there’s a lot to unpack there. You’ve got so many different pieces. We’ve talked a little bit about Hatch-Waxman. So, I’m going to just park that one to that side.
And your point about the Patent Office is important. Because ultimately, this is where it all starts. The Patent Office is supposed to be operating as a public agency in the interest of the public.
But anybody who has studied the economics of the Patent Office will realize that it’s – and it’s a term that’s used – they are suffering from regulatory capture, as in basically their clients, their focus is really on the commercial clients that pay the fees for their patents. And they’re not really thinking in terms of the public interest, even though they may claim they are because they’re driving “innovation.” Which many of these patents are pretty poor in quality.
And so, this report that you were mentioning, that the Patent Office put out, was trying to sort of counter some of the findings that we had found in our report since 2018 and even more recently.
First of all, it doesn’t address—and it says so even on a footnote in the report for anybody who wants to read it—it says it doesn’t directly address all the data that we found.
TEDDY DOWNEY: What is the name of the report, just quickly, so people can look it up?
TAHIR AMIN: Drug Exclusivity. And the report only focuses on Orange Book patents. It doesn’t even look at the biologic sector. It only focuses on Orange Book patents. And as we’ve already discussed, the FDA itself says not all patents are listed on the Orange Book.
And I think listeners and people who may listen to this afterwards, or people who are in this debate, only think that it’s only the patents that end up in litigation that matter. That is a misnomer. As somebody who’s worked in the IP field and having spoken to endless scientists, the problem starts as a generic or a biosimilar competitor having to navigate these patents as they’re being filed because you’re doing your R&D to come up with your version.
So, what you’re doing is these are all landmines. This is even before you get to litigation. So, even though a company may only use 10 or 12 patents in litigation in the end, that’s not the number that matters. What matters is the hundreds or the dozens that they’ve already amassed because you’re having to work your way through them. And they become either a deterrent to a competitor to say, actually, I can’t do this because it’s going to cost me God knows how much to get through this. Or it costs millions to get through it. And what you do then is you end up with a settlement.
Now, I know I skipped the question what you said about these new types of settlements and I’m kind of veering off a little bit, but I want to answer that question. And I think the FTC came out with a report early this year showing the new ways that pharmaceuticals in the pharmaceutical space that settlements are occurring.
And the one example I want to give, which was actually in the Patent Office report, because they were trying to say, because we had said Revlimid had up to 40 years of patent protection, of which we won’t see competition until 2026.
And I think it’s important to distinguish between patent protection and market exclusivity or market monopoly. They’re two different things. And we try to distinguish that.
In fact, in all our writings now, we say a company has amassed 40 years of patent protection. They have patents that run on a particular drug, in whatever form, for 40 years. And that’s true. They have patents that do that. How much of that market exclusivity they will get depends on what happens in court.
So, to give you the Humira example, even though they had patents running until 2034, they struck a bargain to let competition in 2023. But they got seven extra years from their underlying patent which was supposed to end in 2016. Those seven extra years were worth $114 billion by some accounts in revenue. That’s a good day’s work for them. All those patents that they filed, the lawyers and what have you, that’s what this game is.
So, what the Patent Office is trying to do to undermine this conversation around, oh, companies are amassing lots of patents. They’re saying, well, they don’t get exclusivity for that full period. Yeah, we know that. But it’s a game that is being played to extract as much as possible beyond the main patent.
TEDDY DOWNEY: And just so I understand, the Patent Office is basically doing a report that essentially regurgitates industry talking points. Is that a fair way?
TAHIR AMIN: A hundred percent. That is a fair way to do it.
TEDDY DOWNEY: Is that the type of rigor that you’ve come to expect, the lack of rigor, out of the Patent Office? That they can just call up an industry trade association, call up PhRMA, and say, hey, we’re interested in some of your talking points? And then launder that into a report? From my perspective, it seems just outright scandalous that that would be some kind of conclusion of the Patent Office to end up there.
TAHIR AMIN: I mean, I’m not saying they did that. But what it sounds like, it does sound like it. Now, one of the examples they give is Revlimid. And they say, oh, well, actually, I-MAK is wrong, because they said there would be 30 years of monopoly. We never said that. We said potentially. It depends on the court case. But they don’t look at the nuance. They like to paint it in a particular way.
And then they use that Revlimid, Celgene’s Revlimid, a cancer drug, to say that, oh, well, competition ended in 2022. But what they didn’t look at is they didn’t look at what the settlement was. And the settlement says—and it’s on Celgene’s site, BMS’s site—that there was basically a staggered volume restriction for the one company that entered.
So, basically, that meant that the generic that got the settlement could only make 7 percent of the annual volume that Celgene made. And then it increased to 12 percent. Then it increased to 15 percent. And it goes up to 12 percent. And then only full generic entry can enter in 26. That is what the Patent Office is portraying as competition. And if that is the definition of competition, then I’ve got a bridge to sell to you.
TEDDY DOWNEY: I just want to stay on this for a second. It just strikes me that it wouldn’t take very long to actually dig into the details. I mean, you call it nuance. But my experience with this is you just do more research to learn what’s actually going on. It’s actually kind of hard to do a cursory level—it’s hard to end at such a superficial level and be like, this is our conclusion.
TAHIR AMIN: Yes.
TEDDY DOWNEY: Especially if the whole point is to do a study. How many years did they spend doing this study to end up not knowing anything about this market? Or without coming up with conclusions that are not useful to any reasonable person who wants to make a decision? It strikes me as very troubling that that superficial level of research is being done at the Patent Office.
But we’ve done a version of this call for a while now. It’s been a while since our last one. But the last time we spoke, there was a problem at the Patent Office for just allowing way too many patents through that are not actually real inventions, that are just sort of based on utility or some lower threshold.
Are you seeing that just more of a pervasive problem at the Patent Office that not only have they lowered that standard, but that they’re just so catering to the branded drug companies, that there’s just no useful research coming out of there? I guess the point is, has it gotten even worse than lowering the standard at the Patent Office?
TAHIR AMIN: I think the demise, if you want to call it that—some people may disagree with that word—but the demise has been set in, the rot has set in, a long time ago. And whether it’s gotten worse or not is, I don’t think—and these are policy choices. I think these are actual policy choices.
One of the problems with the Patent Office is—I think this report reflects—is it doesn’t take any responsibility itself for granting these patents. It just says, oh, we’re just going to look at what the eventual market exclusivity was of the drug. And it’s not as long as what people claim it is. And that’s it. We’re not even going to talk about all the patents that we grant, because all we do is we just grant them. And then the market, the courts, the litigation system, sorts it out.
That’s the system we have. And the Patent Office is happy with that. Frankly, I think that’s diabolical. Because you’re supposed to be the vanguard of a public interest, and that contract is not there anymore. And the social contract of a government right, which is what a patent is, is essentially turned into a private right, almost like there is no public say in it.
And so, when you go back to this idea of, well, what patent should we be granting, and the bar, and the whole thing is—as I like to say, and people may challenge this, and I’m happy to have this discussion—the patent system today is not about invention. It’s an investment for exclusivity system.
If all have to say is that I’ve invested, I’ve come up with some utility, and I get a patent. The novelty factor, the non-obviousness factor, has pretty much kind of just become diluted and is kind of almost secondary. Because we want to drive and grow the economy through “innovation.” And innovation is a much lower standard than invention. This all happened in the 60s, 70s, and 80s, and the economy turned this way, probably because of technology, the way it was evolving, but largely because to drive investment.
And so, this is why we have so many more patents today. And that is a fundamental problem. It’s an economic policy problem, which is hurting millions, not only in the U.S., but around the world.
TEDDY DOWNEY: And I want to stay on this for a second. Because you mentioned policy choices, but there are also personnel choices. And the Biden administration had a really comprehensive anti-monopoly regime in place, but it was fairly focused at the FTC, the DOJ, maybe a few other areas. You could see it popping up, notably at the Department of Transportation, late during Pete Buttigieg’s tenure, but really kind of scattered, not totally comprehensive across the whole government.
It seems like what you’re saying is that the Patent Office was effectively left—it did not—and who are the types of people that go in, have been at the Patent Office? Are we seeing a shift with the Trump administration? Is it business as usual?
There’s sort of the high-level appointee. And then there’s sort of the, obviously, Republicans, they’ll call it the deep state, but sort of the bureaucracy. Are both, you said the rot has set in. Do we have that from the top down? Is it all the way through? Where do you see—and has it changed at all?
TAHIR AMIN: Yeah, I think this is not a Republican or a Democrat sort of difference. I think both parties have created the rot. In fact, in many ways, it started from Carter in the late 70s, and it’s happened all the way through.
In many ways, I think it’s the impact of neoliberalism, to use that term. Which is a loaded term for some people. But it’s effectively what has created this way of reducing any kind of government sort of overview of systems and leaving it in the interests of the market. And I think we’re going to get potentially—what we’re seeing in the Patent Office now under the current administration, we’re seeing a lot of the things that maybe were slightly moving in a different direction with the Biden administration under Kathy Vidal, who was the Director. There was a little bit of space there where there were some things that she’s proposed that eventually have now been removed. And now we’re back to a worse version.
So, we’re often oscillating between this, we’re kind of slightly trying to fix a few things, but not really, to getting worse. And it never gets better. And you’re right. The patent system is almost off limits for any kind of critique for any of the administrations.
TEDDY DOWNEY: What’s interesting about this is the Republican Party obviously is, you know, there is bipartisan interest in Congress to address the PBM issue, which is fundamentally a drug price issue at some level. You have even Trump going out of his way to talk about trade tariffs on pharma, most favored nation clauses and pharma.
So, there’s clearly a political will around drug prices. How do you explain the disconnect between the high-level rhetoric, the policy initiatives related to drug prices outside of the Patent Office? But then the Patent Office seemingly just, not only going about its way, but getting even worse, even as that rhetoric ratchets up elsewhere?
TAHIR AMIN: Yeah, it’s amazing that we’ll do everything but go to the source of the root of the problem, right? And I think the reason for that is because patents are seen as this engine of the economy and the investment flow. And if we mess with that, the sky’s going to fall in. And I think that’s what prevents people even tackling.
I mean, there are bills out there that are bipartisan bills. There’s one called the Ethic Act, which just got put through Senate by Josh Hawley, Senator Welsh. And it goes it tries to tackle some of the problem. But we never get so far upstream where we say, actually, why are we granting these patents in the first place?
And until we address that fundamental issue, we are going to be stuck in this place for a long time. And I think it serves a lot of interested parties to keep it that way, whether because people think it serves the U.S. economy, which I don’t think it does. In fact, I think it’s actually denigrating the R&D capabilities that the U.S. has. Because what we’re doing is we’re focused on these little increments, as opposed to actually really bringing new value, new knowledge, into the marketplace.
And people can have all sorts of debates about that. And that’s why I think the innovation, the language of innovation, has handicapped us to do less, as opposed to do more.
TEDDY DOWNEY: Yeah, I mean, the incentive is to get more lawyers, not more scientists.
TAHIR AMIN: More scientists. And put those billions of revenue into real lab work and your employers. Instead, I’d rather pay off my shareholders and investors.
TEDDY DOWNEY: And I want to talk about litigation. Is there any litigation that you’d point to that actually is promising that some courts, some court fights, are pushing in the right direction, that you’ve got some court decisions that are encouraging? Or is it bleak?
And if not that, state investigation, anything where we can sort of say, hey, these people get the problem and are digging into it, anything worth following other than even at the legislative level? Courts, states, something where there’s movement.
TAHIR AMIN: I think from a congressional level, there have been six bills sort of around patents. I call them sort of patent adjacent, as in they don’t tackle the granting of patents, as in raising the bar for what deserves to get a patent. But what it does, it tries to minimize the number of patents you can use in litigation.
So, it’s trying to address some of the patent thicket problem, where companies amass lots of patents and use them in litigation. Or at least threaten to use them. That’s as good as we’ve got in Congress.
And I think we have to applaud at least that. And it’s bipartisan. And we say, okay, at least you’ve seen some of the problems. And I think we didn’t have that six, seven years ago. So, I see that as progress, even though it doesn’t bring really tangible sort of meaningful change to people’s lives at this point.
I think in terms of cases, I’m not aware of anything that really strikes me as tackling that fundamental upstream problem. And I think we’re a long way away from that. I think there are some cases, some antitrust cases, which are brewing through the court. I think there’s one where, and again, it’s private actors bringing it. Mylan was, I haven’t followed it for the last few months, but I know they were involved in an antitrust case over the product, the insulin glargine, Lantus, and basically all the tactics that Sanofi used, including Orange Book patent listings and other things to delay competition.
And we did a report back in 2023, where we looked at how much Sanofi was able to earn because of the delay of five years, because of all the patent games they played. They earned an extra $14 billion. That meant less insulin for a lot of people.
And so, this is happening in court, whether that will be a decision that lands in favor of those of us who are interested in strong competition, we’ll see. So, I don’t know where that is.
TEDDY DOWNEY: And when you go to Congress, when you’re lobbying Congress, you’re talking to Congress, you’re talking to key decision makers, did the eye-popping amounts of money get people’s attention? Do you think that changes some people’s interest in doing this?
Because even when we first started talking about this, the numbers were not even really quite close to what we’re talking about now. I mean, it might have been ten years ago or whatever. But these are just such eye-popping astronomical numbers. Does that get more attention? Does that pique the interest of lawmakers more now?
TAHIR AMIN: I think the Humira example still sort of vibrates through people. I think that was the first one which really struck people. And that’s what led from 2019 onwards—at least in terms of the periods that we’ve really focused on this issue here in the U.S—that’s what has led to some of the actions now with these bills. Five years later, we’re seeing them still hanging around in Congress, trying to go through.
But I think in terms of the recent report with the Ozempic and Wegovy, we’re still waiting to—these things take about six months to filter through. So, we’re still kind of speaking with people. And obviously, with the election cycle, a lot of things didn’t—nothing was really happening.
And so, now we’re in this new Trump administration, we’re waiting to see where they want to act and what they want to do. And I kind of predicted that they would focus on the PBMs and not the drug companies, and that’s largely been the case. I think even though the Most Favored Nation rulie is something that seems to have had a lot of attention, I think there’s a number of reasons why I don’t think that will lead to anything.
But yeah, I don’t think there’s enough vigor in terms of taking on these issues. When you look at $166 billion, that’s outrageous. It just seems to me there’s so much going on in the political space at the moment, that that doesn’t seem to be bothering people.
TEDDY DOWNEY: Are there any generic companies that are willing to just be more aggressive and litigious and just hire a bunch of lawyers and deal with all this stuff that you think is worth paying attention to, sort of pioneers on the generic side? I mean, that would be one interesting way to look at this. But from my experience, there are so many generics that used to just do generics that now also do branded, it’s very confusing. I’m like, wait, Teva’s—wait. Are they the generic? Are they the brand?
Wait. Who’s suing who? I mean, what’s your take on the state of the generic industry and their willingness to fight these fights and also the capacity to really have five or six for each drug? I mean, there’s been so much consolidation. There’s been so much hollowing out of the generic industry. I’m curious to get your assessment of where that is.
TAHIR AMIN: Yeah, I think the consolidation that’s happened in the generic space, it’s kind of hurt the ability to have more robust competition. If there is a potential light, there’s companies like Sandoz, which have spun out of Novartis, which was always a generic arm of Novartis, but now has spun out independently. They seem to have, at least from the conversations I’ve had with them, they recognize the patent problem.
And I think to its credit, the AAM, which is the generic sort of lobby group in the U.S. they’ve always been identifying some of the issues with the patent sort of system and some of the games that get played the continuous litigation and so forth.
I think there’s this kind of launching aggressively is what used to happen in the 70s, where a company would just launch and then get, see where the litigation ended. That’s kind of died. That doesn’t really exist anymore, I think because of the way the law has shifted. It’s not in their favor. Some companies might still try and do it, but it’s less, it’s very few, far between.
So, no. I think companies, generics, they’re always looking for opportunities to get into the market. I mean I’ve had conversations with companies that have been trying to get in, for example, they’ve spent millions litigating. I mean, I don’t want to name names because I can’t.
But one example I can remember that’s a company, a biosimilar, spent $40 million just litigating, trying to get it to market. And it’s insane. So everything’s a barrier for them. And I think the biosimilar market is going to shrink if we do not change something soon. We’re going to have less and less biosimilars, in the U.S. at least.
But I think there are some potential stars out there who are finding ways. I mean, one great example is – and it’s not the U.S. unfortunately—is Canada, apparently on Ozempic, the underlying patents and the semaglutide. And Sandoz recognized that Novo Nordisk forgot to renew the patent. So, they might be able to get it a year or two earlier which could save billions in Canada. But we, unfortunately, don’t have any good news like that here in the U.S.
TEDDY DOWNEY: Are the rules internationally as problematic as here? Are there any jurisdictions internationally – we’re over time and I’ve got to let you go – but anything internationally to look at where other countries are doing something interesting, not being so sort of captive to pharma just on figuring out this pricing and patent problem?
TAHIR AMIN: I mean, we just have to look at—I’m not saying Europe’s perfect. Don’t get me wrong. But we just have to look at the fact that generics or biosimilars enter into Europe on average, by our count, looking at these drugs that we’ve looked at, anywhere from four to six years earlier. That says a lot already.
And I’m not saying there aren’t patent standard issues in Europe as well. They’ve got some of those same problems. But at least they don’t have some of the processes that the U.S. has which allows these thickets to be built around patents that cause heavier delays in litigation and so forth.
So, even just from that procedural aspect, I think there’s things that could be improved which are not happening at the moment. There have been some attempts. I mean, the bill by Welsh and Hawley is attempting to fix some of that. But it doesn’t go far enough. There could be a lot of different things that we could be doing even from a procedural thing. Never mind like assessing what should get a patent or not. Just from a procedural thing that helps these companies build up all these patents. We could eliminate some of those routes.
TEDDY DOWNEY: Well, as always super fascinating conversation. “Overpatented, Overpriced” available on the I-MAK’s site. Please read it. Very, very interesting. Tahir, thank you very much for doing this. Such an incredible conversation. So much to ponder and dig into.
TAHIR AMIN: Yeah, I appreciate it, Teddy. Thanks for having me on again.
TEDDY DOWNEY: All right. And thanks to everyone for joining the call today. This concludes the call. Bye-bye.
TAHIR AMIN: Bye.
