Game of whack-a-mole.

Stop Playing Health Care Antitrust Whack-A-Mole

By Jaime S. King

The time has come to meaningfully address the most significant driver of health care costs in the United States — the consolidation of provider market power. 

Over the last 30 years, our health care markets have consolidated to the point that nearly 95% of metropolitan areas have highly concentrated hospital markets and nearly 80% have highly concentrated specialist physician markets. Market research has consistently found that increased consolidation leads to higher health care prices (sometimes as much as 40% more). Provider consolidation has also been associated with reductions in quality of care and wages for nurses

In consolidated provider markets, insurance companies often must choose between paying dominant providers supracompetitive rates or exiting the market. Unfortunately, insurers have little incentive to push back against provider rate demands because they have the ability to pass those rate increases directly to employers and individuals, in the form of higher premiums. In turn, employers take premium increases out of employee wages, contributing to the growing disparity between health care price growth and employee wages. As a result, rising health care premiums mean that every year, consumers pay more, but receive less. 

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Gavel surrounded by piles of money.

3 Challenges to Patents on Therapeutic Monoclonal Antibodies

By Gregory Curfman

Three new developments — two based on litigation and one based on a federal statute — may have significant effects on pharmaceutical manufacturers’ use of patents to fend off competition and maintain high prices for therapeutic monoclonal antibodies.

Highly specific monoclonal antibodies have played an increasingly important role as precision therapies for a growing number of diseases, including malignant, cardiovascular, and inflammatory conditions. As therapies derived from research and development, therapeutic monoclonal antibodies may be — and usually are — patented, providing manufacturers with protection from competition and the prospect of high revenues.

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close up photo of U.S. currency.

When “Pay-for-Delay” Becomes “Delay-Without-Pay”: Humira Antitrust Claims

By Laura Karas

In June 2020, the U.S. District Court for the Northern District of Illinois dismissed state and federal antitrust claims against AbbVie, maker of Humira (adalimumab), for accruing more than 130 patents on the top-selling drug and asserting allegedly unmeritorious patent infringement claims against makers of adalimumab biosimilars. AbbVie then settled the patent infringement litigation by entering into agreements with eight drug makers to allow adalimumab biosimilars to enter the U.S. market in 2023 and the European market in 2018.

In my last post, I discussed the district court’s memorandum opinion finding that “the vast majority” of AbbVie’s conduct was not “objectively baseless petitioning” and was therefore immunized under the Noerr-Pennington doctrine. In this post, I explore several problematic aspects of the court’s reasoning for rejecting the claims of pay-for-delay and market allocation.

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Hundred dollar bills rolled up in a pill bottle

AbbVie Wins First Round in Humira Antitrust Lawsuit

By Ryan Knox and Gregory Curfman

Since receiving FDA approval for Humira® (adalimumab) in 2002, AbbVie, the drug’s manufacturer, has filed hundreds of submissions to the U.S. Patent and Trademark Office for secondary patents – almost half of which were filed after 2014, just two years before the expiration of its core patent.

These patents were largely directed to methods of use and potential formulation changes, but they did not include claims that affect the clinical efficacy of the biologic, which is used in the treatment of rheumatoid arthritis, Crohn’s disease, and psoriasis, among other conditions. Instead, the purpose of the secondary patent filings was to assemble a thicket of patents, 132 in all, to prohibit competition from biosimilar companies.

And so far, the strategy has worked. AbbVie remains the sole U.S. manufacturer of the biologic, and has successfully defended its domain: in June 2020, a federal district court judge in Chicago dismissed an antitrust lawsuit against AbbVie.

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Blister pack of pills, but instead of bills dollar bills are rolled up in the packaging

To Cut Prescription Drug Spending, Stop Delays for Generic Competition

By Beatrice Brown and Benjamin Rome

Prescription drug spending in the U.S. remains high and continues to rise, accounting for about 20% of national health expenditures. While generic competition is crucial for reducing drug prices, brand-name drug manufacturers can utilize several strategies to delay such competition by increasing the length of market exclusivity for their drugs.

Although brand-name drugs only account for 18% of all prescriptions filled, they comprise 78% of total drug spending. By contrast, equally-effective, interchangeable generic drugs can offer discounts of up to 80% off their brand-name drug counterparts.

Generic competitors can only be introduced after brand-name drugs have completed their period of market exclusivity, which typically lasts 12-16 years and is largely determined by the patents covering the drug. Brand-name pharmaceutical manufacturers have strong financial incentives to prolong this market exclusivity period and delay entry of generic products.

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Tertiary Patents: An Emerging Phenomenon

By Jonathan J. Darrow

Brand-name pharmaceutical manufacturers have long been known to try to protect and extend their market exclusivity periods by obtaining patents on a drug’s substance (“primary patents”) and also on its peripheral features, such as formulations or methods of manufacture (“secondary patents”). A new study describes an emerging phenomenon of “tertiary patents,” which have the potential to further delay and discourage market entry in the context of drug-device combination products.

Combination products are defined by the U.S. Food and Drug Administration (FDA) to include therapeutic products that combine a drug with a device, such as an inhaler or injector pen. These products can sometimes offer life-changing or life-sustaining treatment, as with naloxone (Narcan) for opioid overdose or epinephrine (EpiPen) for severe allergic reactions. In recent years, these and other similar products have been the subject of substantial controversy related to their prices and prolonged lack of generic competition.

To investigate the potential role of patents on the prices and exclusivity periods of drug-device combination products, two researchers at the Program On Regulation, Therapeutics, And Law (PORTAL) at Brigham and Women’s Hospital and Harvard Medical School (where I hold a faculty appointment) conducted a comprehensive evaluation of drug-device combination patents registered with the FDA. They found that patents related to drug delivery devices have tripled since the year 2000 and contribute a median of five years of additional market exclusivity to those products (subject, of course, to potential judicial or administrative patent invalidation). Furthermore, the researchers identified a subset of 31 products having only device patents (i.e., having no primary or secondary patents), and found that these patents were scheduled to expire a median of 17 years after FDA approval. Read More

Happy New Year: From “Weltschmerz” to Pharmaceutical Innovation

By Timo Minssen

Dear readers and colleagues,

I would like to take this opportunity to wish you all a very happy, healthy and peaceful year 2016.

Reaching the end of 2015, I cannot stop thinking about the year that has passed. Being a native German, living in Sweden and commuting every week over the bridge to Copenhagen in Denmark – most recently with thousands of terrified refugees and border controls on the way back to Sweden – this year has left me with much astonishment and concern about the state of the European Union and our global situation. It appears to me as if the EU and other global leaders have focused far too much on tiny technicalities, while leaving the bigger issues untouched and disregarding crucial lessons of history. There are so many things that we must learn from 2015’s terrible events and alarming decisions, but also from the hope-giving agreements, incidents and initiatives. For me one of the most important take-aways is that everything is connected and that sustainable, realistic solutions not only require immediate actions. In my view, we need to think about long-term strategies both in more detail and from a bigger perspective. Due to the complexity of our most pressing problems this is a colossal task. It demands more knowledge, better communications, more collaboration and a more effective coordination of  the considerable skills and different competences that are already out there.

Returning to the actual topic of this blog, it becomes evident that this is also very much true for the health sector and the bio-pharmaceutical area. Not only the Ebola outbreakglobal health crises, IPR debates, dreadful business models and controversial FTA negotiations, but also scientific break troughs, new therapies, legislative action and novel US and EU approaches demonstrate very clearly how this area is left with many challenges and opportunities. The recently approved US 21st Century Cures Act and the new EU Clinical Trials Regulation, for example, show how legislative activities pursuing laudable goals might lead to unwanted adverse effects if they are not carefully enough considered. Read More

Payments to Egg “Donors”

By David Orentlicher

[cross-posted at HealthLawProfs blog and orentlicher.tumblr.com]

Interesting article in today’s Wall Street Journal about a lawsuit over limits on payments by fertility clinics to women who supply eggs for infertile couples. Under influential, though not mandatory, guidelines issued by the American Society for Reproductive Medicine, payments to egg “donors” above $5,000 “require justification,” and payments greater than $10,000 “are not appropriate.” (When I was in the Indiana legislature, a statute was passed limiting payments to $4,000, plus out-of-pocket expenses.)

In one view, payment caps are needed to “prevent coercion and exploitation in the egg-donation process.” But one also can view the guidelines as an “illegal conspiracy to set prices in violation of antitrust laws.” More to come in a case that could go to trial next year.

In the meantime, there are other important concerns about payments for eggs and the costs to infertile persons. As with other assisted reproductive treatments, insurers generally do not cover those costs. This encourages the infertile to seek multiple births in one treatment cycle rather than single births over multiple treatment cycles, which puts mothers and their infants at greater risks to health. In addition, lack of coverage leaves treatment unaffordable for many of the infertile. As I have argued elsewhere (here and here), social policy treats infertile persons unfairly when coverage is denied for assisted reproductive services,

Last Year Was A Wild One For Health Law — What’s On The Docket For 2015?

By Greg Curfman, Holly Fernandez Lynch and I. Glenn Cohen

This new blog post by Greg Curfman, Holly Fernandez Lynch and I. Glenn Cohen appears on the Health Affairs Blog:

Everywhere we look, we see the tremendous impact of new legal developments—whether regulatory or statutory, federal or state—on health and health care. These topics range from insurance to intellectual property to religion to professionalism to civil rights. They remain among the most important questions facing Americans today.

This post is the first in a series that will stem from the Third Annual Health Law Year in P/Review event to be held at Harvard Law School on Friday, January 30, 2015. The conference, which is free and open to the public, brings together leading experts to review major developments in health law over the previous year, and preview what is to come.

Read the full post here, and register for the Third Annual Health Law Year in P/Review for free here.