Policymakers Are Falling for a Drug-Pricing Myth

Brand-name drugmakers are manipulating the patent system to block cheap generics from reaching patients. At least, that’s what some lawmakers in Washington have been led to believe.

But this narrative, which activist groups have pushed for nearly two decades, unravels under scrutiny. As I demonstrate in a recent study, the data that activists cite as evidence actually undermine their claims.

It’s critically important for lawmakers to know the truth. Because if Congress weakens patent protections based on a myth, it could deter lifesaving research without leading to cheaper drugs.

It’s Not ‘Evergreening,’ it’s How Innovation Works

In recent years, activists have focused their ire on a practice they’ve dubbed “evergreening.” They claim that pharmaceutical companies game the system by patenting incremental changes to already Food and Drug Administration (FDA)-approved drugs—such as new formulations or dosing regimens—in order to delay generic competition and keep prices high.

But developing new versions of a product that’s already on the market is not patent abuse. It’s how innovation works in every industry.

Apple and Samsung invest immense amounts of time and money to ensure that each new generation of smartphones features better cameras and batteries than older models. Ford and Toyota invest billions to design vehicle models that become safer, comfier, and more fuel-efficient with each passing year.

Drug companies are no different. Even after they secure initial FDA approval for a new medicine, they constantly search for new uses for the drug, as well as ways to make it easier to take, reduce its side effects, or increase its effectiveness.

Consider the new class of GLP-1 medicines used to treat diabetes and obesity. The first drugs in this class required daily injections. Then, drugmakers refined the products, so that patients only needed to jab themselves once a week. Now, multiple companies have launched pill forms that eliminate the need for needles at all.

Making these changes generally requires a new round of clinical trials and regulatory review. That’s because the FDA treats each version—an injection, a daily pill, a different dose—as a separate product and reviews it at a different time. When the research supports it, companies may obtain new patents or FDA exclusivities for the new versions.

Follow-On Inventions Do Not Extend Patent Term

But crucially, these new patents or exclusivity periods don’t extend the original products’ 20-year patent terms or regulatory exclusivity periods. A patent on a newer oral version of a medicine, for instance, does not extend protections for an injectable version approved years earlier.

Simply put, once the original product’s patent term and exclusivity period expires, rival manufacturers can launch generic versions.

And they do. Studies spanning several decades show a strikingly consistent pattern. Generic drugs typically enter the U.S. market roughly 12 to 14 years after the FDA first approves a new molecular entity. That timeline has remained stable over time, even for drugs that have undergone extensive post-approval research that resulted in new patents and exclusivity periods for new versions.

Today, generics account for nine out of every 10 prescriptions filled in the United States—the highest rate in the developed world. If drug makers are attempting to abuse the patent system to unfairly evergreen their products, they’re failing abysmally.

The current patent system allows generic manufacturers to introduce cheaper, copycat versions of older drugs, while still incentivizing companies to invest in post-approval research. If lawmakers weaken the incentives that fuel this post-approval research, patients will still get generic versions of the original drugs right on schedule—as they currently do. But they’ll miss out on new medical uses and safer, more accessible, and easier-to-take versions that are never developed along the way.