Analysis Shows Amgen’s Gaming Of Patent System Cost Medicare More Than a Billion in Savings Over Less Than Four Years
Washington D.C. – A new analysis by Public Citizen reveals how pharmaceutical company Amgen gamed the patent system and kept Medicare paying high prices for etanercept, sold under the brand name Enbrel and used to treat autoimmune diseases. The analysis estimates that Medicare could have saved $1,053,023,122 in less than four years on Enbrel if Amgen hadn’t circumvented the law to secure additional patent protections after 2019, when biosimilar competitors should have been able to enter the market. Enbrel is one of the 10 drugs chosen by the Biden administration for Medicare drug price negotiations under the Inflation Reduction Act (IRA).
By the time a maximum fair price for Enbrel goes into effect under the Inflation Reduction Act in 2026, Medicare will have lost nearly $2 billion ($1,891,500,836) because of unwarranted exclusivities protecting Enbrel from competition.
“This is a clear example of how Big Pharma is manipulating contracts to abuse the patent system to keep affordable competition out of the U.S. market,” said Jishian Ravinthiran, research fellow with the Access to Medicines program at Public Citizen and lead author of the report. “While other countries already have more affordable biosimilar alternatives to Enbrel, American taxpayers have already lost more than a billion dollars due to Amgen’s monopoly abuse.”
The analysis describes how, after acquiring Immunex, the original manufacturer of etanercept, Amgen built a “wall of patents,” including by reworking older patents, to gain nearly three decades of exclusivity after the drug was approved in 1998. In doing so, Amgen successfully thwarted competition from two potential biosimilar competitors, Erelzi and Eticovo, which received FDA approval in 2016 and 2019, respectively. While Americans will be deprived of more affordable biosimilars until 2029, European peers have had access to them since 2016.
The analysis concludes that in cases where a manufacturer has gamed the patent system to unfairly extend exclusive control of a selected drug, Medicare price negotiators should consider the prices that would be in place if proper competition existed, as well as the excessive revenues manufacturers have unfairly obtained from Medicare and its enrollees through this gamesmanship.
The analysis also recommends that when negotiating maximum fair prices for the selected drugs, government negotiators should not allow companies to pass on inflated acquisition costs, which are based on the expectation of exploiting monopoly power, as though they were real research and development costs to be recouped from Medicare’s enrollees and taxpayers.
“This analysis demonstrates the imperative for Medicare to ensure negotiated prices under the IRA account for drug corporations’ history of patent abuses,” added Steve Knievel, advocate with the Access to Medicines program and coauthor of the report. “Medicare negotiators mustn’t miss the opportunity to put a stop to prescription drug corporations’ exploitation of seniors and people with disabilities.”