This December, the patent for Pfizer’s goldmine drug Lyrica will expire. Lyrica is prescribed for neuropathic illnesses such as epilepsy and fibromyalgia. Since its approval in 2004 Lyrica has made billions for Pfizer: in only three of its 14 years of sales, Lyrica sold over $10 billion worth of this drug. (Pfizer’s total revenue for 2017 was $52.5 billion).
In a September 30 story titled “Let’s Throw a Patent-Burning Party,” the Wall Street Journal’s Peter Kolchinsky noted that while pharma patents serve a useful purpose, pharmaceutical companies like Pfizer have repeatedly taken advantage of patent protection.
“Society pays for expensive patented drugs in order to incentivize intrinsically risky and expensive research and development. But patents expire, those expensive drugs become inexpensive generics, and society reaps the rewards forever, or until a better drug comes along on which it’s worth paying a new mortgage. That’s the ideal.
For the contract to really work, there are kinks to work out. Namely, some pharma companies go too far in trying to extend their drugs’ patent lives, turning justifiable mortgages into unjustifiable rents. Occasionally they even rebrand older, off-patent medicines without any innovative upgrades, which may feel like having your house stolen and sold back to you. And insurers offload too much of the cost of innovative, patented drugs onto patients through onerous cost-sharing structures.”
In the patent world we understand how “some pharma companies go too far in trying to extend their drugs’ patent lives,” but most laypeople don’t know how that works.
Elisabeth Rosenthal, author of An American Sickness, How Healthcare Became Big Business and How You Can Take It Back, breaks it down in one example:
In 2011 company called Horizon Pharma marketed a “new” painkiller called Duexis that is made of two common over-the-counter drugs: ibuprofen and famotidine (which many of us know as Pepcid). Duexis cost $1,600 for a month’s dose. Compare that to simply taking an ibuprofen and a Pepcid for one month, which would cost about $9. Nevertheless Duexis sold well enough to gross $85.5 million in 2012. After generics manufacturers sued to make a generic version of the drug (noting that there was nothing new about it in the first place,) Horizon made a deal: they offered to pay generics manufacturer Par Pharmaceutical not to produce a generic version of Duexis until 2023. This scheme is called “pay for delay,” and it is one of a few tricks Big Pharma uses to subvert the patent process.
Getting back to Pfizer, whose Lyrica patent is about to expire: Pfizer won’t be letting go that easily. Under an FDA program that lets companies demonstrate whether their drugs work on children, Pfizer is expected to hold on to its market share at least until June 2019.
It is worth remembering that in 2009, the United States Department of Justice found Pfizer guilty of fraudulent marketing around four of its drugs, one of which was Lyrica. Pfizer was illegally promoting Lyrica for off-label use. When they got caught, Pfizer agreed to pay a $2.3 billion settlement. It was the biggest healthcare fraud in U.S. Justice Department history.
This original content is copyright KeeleyDeAngelo LLP. Feel free to quote with citation.