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                         PHARMACEUTICAL MONOPOLY

The patent system exists to protect the intellectual property of innovators. Too often, however, some brand-name drug companies attempt to patent features of drugs that do not represent true innovation. Some attempt to bury competition from generic and biosimilar drugs indefinitely by finding ways to repackage existing inventions in later patents. These “patent thickets” prevent competition by discouraging competitors from entering a market because of the exorbitant cost of litigating meritless patents.


Once they are granted patents on their prescription drugs, drug-makers tend to have monopoly pricing power for these drugs for 12 or 13 years. This means that they can charge whatever they would like for their drugs. And, the prices they choose result in industry profits far higher than most other sectors of the economy.

There can be some competition from prescription drugs that have their own patents and are marketed to provide the same treatment. But, the competition does not bring down prices sufficiently. Moreover, pharmaceutical companies have ways to extend their monopoly pricing ability to as long as 20 years or more. Mylan’s EpiPen Patent is just one example of this "evergreening." They can change the drug’s packaging or method of administration without clinical benefit and extend their patents. They can also pay off generic drug manufacturers not to bring a generic substitute to market.

This drug company monopoly power undermines the free market as a solution for bringing down the price of drugs. We need a “nonmarket force” with as much power as the drug companies to ensure drug prices are affordable. Most foreign governments exercise that power. They do so in different ways. Many base their prices on the clinical benefits of new drugs over other drugs. In all cases, if pharmaceutical companies are not happy with the price of their drugs, they do not have to sell them. But, they usually sell their drugs.

Ref. Just Care USA

The "Remove Patent Thickets" initiative researches solutions for this issue and works based on state to track which pharmaceutical company has a monopoly on a life-saving drug. Through education surrounding health policy, we are able to push for greater regulations of patent periods & competitors.

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