Patents protecting AbbVie's inflammatory disease drug Humira in Europe expired two and half years ago, forcing the company to sharply cut its prices as low-cost competitors flooded the region.
But in the U.S., the world's top-selling drug is protected until 2023 due to broader intellectual property protection and legal settlements with would-be rivals. AbbVie, meanwhile, has kept raising prices.
The company's so-called "patent thicket" for Humira emerged as the biggest villain in a hearing Tuesday before the House Oversight and Investigations Committee, suggesting an area of potential agreement between Democrats and Republicans on drug pricing legislation.
While the hearing was called to support a Democratic-sponsored bill that would allow the U.S. government to directly negotiate prices, debate veered away as members from both parties challenged AbbVie CEO Richard Gonzalez on the company's patents.
"You have the right to make your profit, give many billions to research and develop new pharmaceuticals," Rep. Clay Higgins, R-La., told Gonzalez. "But it's a question of whether or not it's an honest profit."
In response, Gonzalez broadly defended the company's pricing and patent practices, saying they are essential to maintaining the momentum of research and development. "The products that are on the market today pay for the products of the future," he said.
Ahead of the hearing, Committee Chair Carolyn Maloney, D-N.Y., released a staff-prepared report detailing AbbVie's marketing of Humira and a cancer drug, developed from 170,000 pages of internal documents accessed by subpoena. Among the report's main findings is the cumulative 470% increase in Humira's price since the drug launched in 2003, price hikes that outstrip the higher rebates AbbVie now pays to insurers, Medicare or Medicaid.
AbbVie earned $16.1 billion last year from U.S. sales of Humira, compared to $3.7 billion from Europe.
According to the report, AbbVie filed 250 patents on Humira, 90% of which have come since its original approval. By 2014, however, internal documents show that company executives believed they would all expire by 2017 and that there would be three to five biosimilar competitors available.
Ultimately, those potential rivals, which include Amgen and Novartis, settled with AbbVie and agreed to delay entry until 2023. That delay will cost U.S. payers $19 billion, according to an internal analysis obtained by the committee.
Pressed by Rep. Gerald Connolly, D-Va., on whether AbbVie offered "anything of value" as part of those settlements, Gonzalez said the company hadn't, noting biosimilar makers would be paying royalties once they launched. "I think what it demonstrates is the value of our patent portfolio," Gonzalez said.
Tahir Amin, co-founder of the advocacy group I-MAK and a witness at the hearing, argued the sheer volume of U.S. Humira patents, compared to those in Europe, are what has kept biosimilar rivals from attempting to win in court.
"They just couldn't litigate through it," Amin said.
Amin also pointed to Humira patents that European authorities have revoked because they couldn't meet the region's stricter definitions of inventiveness. "One can never get a patent rejected in the United States because you can keep repeating it over and over again until you get one, so it's a war of attrition," he said. "Examiners are immense amount of pressure, because of the incentive to be granting."
Gonzalez defended the number of patents the company has on Humira, citing the investment it has made to research whether the drug works in additional inflammatory disorders like Crohn's disease and how best it should be used.
Strikingly, he argued the patent office itself might carry some of the blame. "I think everyone gets gets somewhat hung up on the number of patents," he said. "Sometimes you'll have an innovation, and they'll say to you, 'That's five different things. Go back and break them up into five different patents.'"