Martin Shkreli's brief but remarkable appearance Thursday before the House Government Oversight and Reform Committee has refocused attention on skyrocketing prescription drug prices and why they are so expensive.
In his work as a self-described patent troll, Erich Spangenberg said he stumbled across at least one answer.
Since the 1990s, he says drug companies – faced with the expiration of a patent on a profitable drug – make tiny tweaks, then apply for and almost always receive a new patent, extending the profitable life of the drug.
“I realized that within the pharma world, people in the patent office and those who were prosecuting these patents were living in a world very different from the rest of us,” Spangenberg said in an interview with ConsumerAffairs.
Spangenberg says this practice, called “evergreening,” keeps cheaper generic drugs off the market and is much more common than Shkreli's action as head of Turing Pharmaceuticals, when he purchased a 60 year-old drug and boosted the price 5000% overnight.
Spangenberg said he has documented cases where a drug company extended the life of a patent simply by switching to siliconized rubber bottle stoppers or adjusting the size of the tablet. Another new patent was granted on a drug, not for any changes to the drug itself, but for how it was being distributed – the addition of a central pharmacy and central database.
“So, the novelty being a central pharmacy and a central database,” he said. “If you've had a computer class, the concept of a central database – there's nothing novel about it.”
And novelty is the key issue, he says. To get a new patent, Spangenberg says there needs to be a significant innovation to the drug itself.
How to counter evergreening
The way to stop the worst evergreening abuses, he says, is simply to have the U.S. Patent Office do its job. When laughable patent applications come in, he says, they should be rejected, with the government only approving drug applications that are actually innovations.
But that's easier said than done.
“What bureaucrat wants to be known as the person who took down a multi-billion dollar drug franchise?” Spangenberg asked.
Additionally, people trying to bring about reforms of the system that would lead to more generics and more competition face difficult odds, to say the least.
"They've bought Washington"
“The number of lobbyists that pharma has, and the amount they spend for that, it's sad to say, but they've bought Washington,” Spangenberg said.
While he says he has been accused of trying to destroy pharma innovation, Spangenberg sees nothing innovative in the evergreening patents that allow drug companies to reap profits from old drugs without producing new ones.
If the Patent Office required companies to innovate in order to receive patent protection, Spangenberg predicts innovation would take off.
“Because then, only the truly innovative companies would survive,” he said.