The cost of drug monopolies in the United States

By James Love

The United States, like other countries, uses the grant of legal monopolies as the incentive to reward successful R&D investments. The legal mechanisms are varied, and include most importantly patents on medical inventions, but also a variety of regulatory exclusivities in a patchwork of programs that address (for example) delays in regulatory approval, testing for pediatric patients, development of treatments for rare diseases, rights in test data used to provide new drugs and vaccines, and the development of new antibiotic drugs.

Each of these legal mechanisms that are used to block competition can be evaluated separately, but it is also useful to look at the big picture, and ask – what is the cost of the drug monopolies in the United States?

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Errors in Patent Grants: More Common in Medical Patents

By James Love

Recently I have become interested in the frequency of a “certificate of correction” on a granted patent, after two efforts to establish federal rights in patents granted.

The first case involved the University of Pennsylvania.  We had identified five patents on CAR T technologies granted to five inventors from the University of Pennsylvania where there was no disclosure of federal funding on the patents when they were granted by the USPTO, as is required by law.  All five patents had been filed in 2014.    We had reason to believe the five patents should have disclosed NIH funding in the invention, and we were right. But the error had been corrected by Penn, and five “certificate of correction” documents were granted by the USPTO in May 2016, something we had overlooked, in part because the corrections to patents are published as image files, and were not text searchable.

The second case involved the Cold Spring Harbor Laboratory.  KEI had identified two patents listed in the FDA Orange Book for the drug Spinraza,  which were assigned to Cold Spring Harbor, and which had not disclosed federal funding.  KEI was interested in pursuing a march-in case for Spinraza, on the grounds of excessive pricing.  The cost of Spinraza in the first year was $750,000, and the maintenance doses were priced at $375,000 per year.  Researchers listed on the two patents had received funding from the NIH to work on the subject of the two patents. Read More