The laws that govern U.S. drug discovery are complicated, convoluted, and fraught with loopholes. A patent runs 20 years, but drug makers file a patient long before a drug is approved, reducing the number of years of patent protection once the drug reaches the market. On average a drug only has 12 to 14 years of patent protection before facing generic competition. This figure is somewhat misleading, however. Nowadays drug makers generally file multiple patents on each new drug.
Forty years ago, new drugs had an average of just under two patents (i.e., 1.8) to protect them from generic competition. Less than 30 years later that had tripled to 6.1 patents per drug. It has gotten much worse since then. As of 2021 blockbuster drugs had an average of 71 patents. This represents a patent proliferation strategy, sometimes referred to as a patent thicket. Additional patents that come later extend the patent clock. The more patents, the more avenues to fight patent expiry. Of course, this is mostly bogus and should not be allowed by the U.S. Patent Office.
The vast majority of drugs sold – about 90% of approved drugs – are what is known as small molecule drugs. These are pills, capsules, even liquid injections. However, increasingly new drugs are biologics drugs that are derived from living substances. The regulation of biologics is different than small molecule drugs. While copies of name brand drugs are called generic drugs, there are no generic biologics. Rather, they are called biosimilars. Regulating generic biologics as biosimilars means pharmacists cannot substitute one for the other. It also has implications for patent exclusivity and prevents compounding pharmacies from making compounded versions (assuming they could). Drug makers lobbied hard to differentiate generic biologics from biosimilars to lessen generic competition.
Drug maker Eli Lilly recently filed suit against the U.S. Food and Drug Administration (FDA) over its classification of the GLP-1 weight loss drug, tirzepatide, as a small molecule drug. Eli Lilly wants the drug classified as a biologic. The FDA claimed tirzepatide is less than 40 amino acids in size, the threshold for being a biological drug. Lilly claims tirzepatide has 41 peptides. The reason for the dispute is that biologics get more regulatory protection than drugs. Compounding pharmacies have made significant sums of money producing copies of GLP-1 weight loss drugs. This was legal only because until recently the FDA classified GLP-1 drugs as being in a shortage condition. GLP-1 drugs are peptides (that is why they are mostly administered as an injection). Compounding pharmacies easily copy GLP-1 drugs, including tirzepatide. Generic competitors will easily make generic versions when the patients expire. Lilly wants regulatory protection by forcing the FDA to reclassify tirzepatide as a biologic.
The theory behind stricter regulation of biologics is because manufacturing biologics is more technically complex. For example, some biologics are grown in vats. Thus, it is difficult to ensure a generic is an exact copy. At least that is the logic of why we have biosimilars rather than biogenerics.
Beginning late last year the FDA began removing various weight loss drugs from the shortage list. This meant that compounding pharmacies could no longer produce copies of GLP-1 drugs that are all still under patent protection. According to the Wall Street Journal:
A government crackdown on cheaper copies of Ozempic and similar diabetes and weight-loss drugs was intended to shut the door on that booming market.
It hasn’t exactly worked out that way.
Instead, some compounding pharmacies and telehealth companies that make the copies have found new ways in. They are making and selling dosages slightly different from the standard, FDA-approved amounts or including additives such as vitamins B3 and B12. Others have changed how the drug is taken, switching from injectables to under the tongue drops or pills.
The law allows compounding pharmacies to make bespoke versions of drugs when patients cannot tolerate the production version. Compounding pharmacies are taking advantage of a legal loophole of sorts. If this strategy holds compounding pharmacies will provide unfair competition to drugs still under patent protection, generally sold for more than twice as much.
The entire WSJ article is fascinating. It highlights the cat & mouse game of compounding pharmacies trying to keep their gravy train running, while drug makers try to keep their lucrative drugs’ prices high. The takeaway should be that the United States needs better, more flexible drug regulations that both protects patient holders’ right to profit from their inventions but quickly fosters competition once patient rights expire.
Read more at WSJ: Ozempic Knockoffs Survive Crackdown Thanks to Loophole
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