Why Pharmaceutical Patent Thickets Are Unique

32 Pages Posted: 19 Sep 2023 Last revised: 22 Mar 2024

See all articles by Michael A. Carrier

Michael A. Carrier

Rutgers Law School

S. Sean Tu

West Virginia University College of Law; Program On Regulation, Therapeutics, And Law (PORTAL), Brigham and Women's Hospital; Georgetown University - The O'Neill Institute for National and Global Health Law

Date Written: August 1, 2023

Abstract

Companies have protected their products with large portfolios of patents. The drug company AbbVie, for example, has collected more than 100 patents on its blockbuster drug Humira. Many have raised concerns about such “patent thickets” in the pharmaceutical industry, which has become a pressing concern given the increasing frequency of thickets and effects on patients’ lives. In response, some have downplayed concern by pointing to large patent portfolios in other industries, in particular, high technology. This Essay offers the first refutation of this argument, explaining why it fails on two basic levels.

First, pharmaceutical companies have all of the patents they need to enter the market. As a result, they do not need to license, instead accumulating patents to block rivals. In contrast, because of the presence of patents from multiple owners in products, high-technology firms need to engage in “cross licensing,” which leads them to amass patents. Exclusion is exacerbated by the pharmaceutical industry’s higher regulatory barriers and firm concentration.

Second, we offer original empirical evidence supporting our hypothesis that pharmaceutical firms use duplicative patents to block market entry. We learn useful information from an analysis of “continuation patents,” which are duplicative patents that cannot disclose any new matter. We find that continuations have recently increased in the pharmaceutical industry, especially as compared to the high-technology industry. We also find that the pharmaceutical industry litigates continuation patents at a much higher rate than the high-technology industries, which is consistent with keeping rivals off the market. We show similar results for “method-of-use patents,” which drug firms have used to delay generic entry, and for the Humira patent thicket.

Keywords: patents, thickets, pharmaceuticals, drugs, high technology, continuations, Humira

JEL Classification: I18, K21, L40, L41, L43, L63, L65, O34, O38

Suggested Citation

Carrier, Michael A. and Tu, Shine (Sean), Why Pharmaceutical Patent Thickets Are Unique (August 1, 2023). Texas Intellectual Property Law Journal, Forthcoming, Rutgers Law School Research Paper, WVU College of Law Research Paper No. 2023-25, Available at SSRN: https://ssrn.com/abstract=4571486 or http://dx.doi.org/10.2139/ssrn.4571486

Michael A. Carrier (Contact Author)

Rutgers Law School ( email )

217 North Fifth Street
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Shine (Sean) Tu

West Virginia University College of Law ( email )

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HOME PAGE: http://https://www.law.wvu.edu/faculty-staff/faculty/s-sean-tu

Program On Regulation, Therapeutics, And Law (PORTAL), Brigham and Women's Hospital ( email )

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Boston, MA 02120
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HOME PAGE: http://https://www.portalresearch.org/sean-tu.html

Georgetown University - The O'Neill Institute for National and Global Health Law ( email )

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Washington, DC 20001
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HOME PAGE: http://https://oneill.law.georgetown.edu/experts/s-sean-tu/

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