Lower Prescription Prices Come When Patent Abuses Are Punished

The Department of Health and Human Services will soon release a report—delayed only by the government shutdown—outlining steps to cut prescription drug prices. HHS is already in talks with the Federal Trade Commission and the Justice Department’s Antitrust Division to make drugs more affordable by restoring competition. That’s the right fight.

But one glaring problem demands action—patent abuse by large pharmaceutical corporations. The surest way to drive down costs is to clear the path for generics. Yet brand-name companies often deploy patent tactics to block challengers.

Take “product hopping.” A drugmaker tweaks a dosage or delivery method just before the core patent expires, then slaps on a new patent to lock out generics for years. Or “evergreening”—filing wave after wave of minor patents on the same drug.

Then there’s “patent thicketing,” burying the Food and Drug Administration in hundreds of overlapping claims to drown competitors in legal quicksand. Genentech took this to an extreme with Esbriet. It reportedly filed more than 20 patent lawsuits against nearly 30 generic challengers. All but one folded and settled.

The US Supreme Court provided a tool to stop this in the Noerr-Pennington doctrine, which makes a patent lawsuit illegal if it’s objectively baseless and filed only to crush competition. The FTC and Justice Department should enforce this doctrine.

Both agencies have the authority under Sections 1 and 2 of the Sherman Act to go after clear patent abuses—when patents aren’t protecting innovation but preserving monopoly profits. Moreover, Section 7 of the Clayton Act applies when mergers threaten to choke competition in specific drug markets.

For too long, the federal response has been timid — delisting a patent here, a warning there. It’s time for a stronger stand. Treat systematic patent misuse as the antitrust violation it is. A few targeted investigations and structural remedies against repeat offenders will send a clear message: Patent rights shield innovation, they don’t strangle competition.

The FTC also must return to its core mission of protecting consumers, not punishing success.

In 2022, it abandoned decades of sound policy by stretching Section 5 of the FTC Act, which gives the FTC authority to police “unfair methods of competition,” beyond recognition. It declared that large market share alone, even without consumer harm, violates the law. That opened the door to targeting pharmacy benefit managers, the very companies that negotiate lower drug prices.

Pharmacy benefit managers secure rebates from drugmakers and push generics and biosimilars on to formularies. They pass roughly 91% of those savings to patients and plans. The three largest handle 80% of prescriptions because their scale gives them leverage to force drug companies to compete on price.

For years, the FTC praised this model as pro-consumer. Now the same agency was suing them—not for raising prices, but for being big. That’s not antitrust. That’s ideology masquerading as enforcement.

The FTC and justice Department must demand discipline. They must focus on real threats: patent gaming, collusion, and barriers to entry. They should drop the crusades against size and efficiency and enforce the law as written—protecting competition that lowers costs, not targeting companies that deliver results.

If they do that, they will reward innovation, unleash competition, and put affordable medicine within reach for every American.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Curtis Hill served as the 43rd attorney general of the State of Indiana from 2017 to 2021.

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