Drug companies are using legal loopholes to extend patents for their most lucrative brand name products and delay the entry of cheaper generics on to the market, according to a report from the National Institute for Health Care Management.
Intellectual property protections enacted over the past two decades have increased the average patent life of new drugs by at least 50% according to the report. Although patent protections were intended to provide incentives for innovation, they have brought higher prices for consumers and heftier profits for brand name makers. Brand name drugs now have patent lives averaging 14-15 years, compared with eight years in the early 1980s.
The report charges that drug companies have used legal loopholes to extend the active life of patents covering their most lucrative drugs, thus keeping cheaper generics out of the market. “Congress has passed a lot of laws, all well intentioned, but they have been a great windfall for the pharmaceutical industry,” said Nancy Chockley, president of the non-profit group that prepared the report. “The current system appears to be out of balance, and it is costing Americans billions of dollars.”
Pharmaceutical Research and Manufacturers of America, the main industry trade group, sharply criticised the report. Citing the fact that the non-profit group behind the report gets some funding from managed care companies, the group's president, Alan Holmer, said: “The sponsors' self serving agenda is to reduce patent terms for medicines to save money for themselves.” The report comes as Congress is embroiled in a debate over how to lower drug costs, especially for elderly people without insurance.