Many Americans are eager to get their hands on weight loss drugs like Ozempic, Wegovy, and Semaglutide, among others. Federal regulators have decided to challenge patents on these drugs, which have great potential to reduce the obesity epidemic in the United States. This is the latest effort in the Biden Administration aimed at making pharmaceuticals more affordable for patients who need them.
The Scope of the Challenge
The Federal Trade Commission (FTC) is challenging patents for 20 brand name drugs, including pharmaceuticals for medical diagnoses such as diabetes and asthma, among others.
The Role of Patents in Pharmaceutical Pricing
Patents typically provide a safeguard for companies that create a pharmaceutical to retain the profit on the medication for a period of time, with the intent of incentivizing innovation, research and development and recouping the costs of putting the drug through the regulatory approval process.
FTC’s Allegations Against Drug Patents
In advance of the patent challenge, the FTC notified 10 pharmaceutical manufacturers such as Novo Nordisk and AstraZeneca that the agency believed the companies were relying on misleading and inaccurate patents to prevent competitors from developing drugs and thereby increasing competition which results in lower drug prices for consumers.
FTC Chair Lina Khan’s Statement
The FTC Chair, Lina Khan, went so far as to claim that the drug manufacturers are citing “bogus” patents to prevent competitors from developing their own versions of these desirable drugs. Doing so significantly hinders competition and keeps the drugs at an inflated price and inaccessible for many people. This is especially egregious when it comes to life saving medications.
The Impact of Ozempic
It is in the government’s interest to keep the price of popular medications down as well, as Medicare spending on medications is a large outlay in the federal budget. The popularity of Ozempic as a drug approved for use in cases of obesity and diabetes, conditions that afflict a significant portion of the aging population. The surge in the use of Ozempic for obesity has led to a noticeable increase in Medicare spending on Ozempic and related drugs.
Drug Manufacturer’s Response
Novo Nordisk, the company that manufactures Ozempic, has not yet commented on the FTC’s challenge to the patent claimed by Novo Nordisk.
Previous FTC Actions on Patents
While the FTC is focusing in this effort on patents related to obesity and diabetes, in 2023, the agency challenged over 100 patents on similar grounds. This is a popular initiative that voters will appreciate in advance of the November election. The Biden Administration is likely banking on the boost this effort will grant to his presidential campaign, even if the effort falls flat and costs are not lowered in time for the election.
Compliance Requirements for Pharma Companies
Once the drug manufacturers receive the FTC warning letters, they have 30 days to either retract or confirm the validity of their patents under threat of perjury. The Food and Drug Administration (FDA) will evaluate the patent’s validity and whether the claims can legally prevent other companies from creating generic medications based on the same mechanisms.
Broader Strategies to Reduce Drug Prices
Ensuring that pharmaceutical companies do not make life-saving and life-enhancing drugs too expensive to be of use to consumers is a key effort by the presidential administration. Another effort underway toward this end is to allow Medicare to negotiate drug prices directly with manufacturers, as federal funds for Medicare are of public interest to all taxpayers. The Biden Administration has also expressed support for allowing states to import pharmaceuticals that may be produced more inexpensively abroad.
Conclusion
Ultimately, increased competition is the only guaranteed way to bring down the costs of new pharmaceuticals. By challenging the patents that keep new pharmaceutical products from hitting the shelves, the FTC can go a long way to helping more Americans afford to manage their obesity, diabetes, and asthma, which are among the top killers of Americans today.
