Patent Use in the Pharmaceutical IndustryBy: Fiona Murray, Kyle Jensen, Ilya Vaynshteyn

The Hatch Waxman Act (1984) simplified the approval process for generic drugs

Started the generic drug industry Provided for ANDAs (cheaper, faster)

Generic Drugs can be manufactured even while originals are still under patent

FDA Orange Book Purpose: To make generic pharmaceutical firms aware of patents protecting brand-name

drugs

All patents that claim a new drug, or some method of using this drug are listed in the Orange

Book

ALL new patent-protected drugs since Hatch-Waxman are listed in the

Orange Book

Our analysis focused on linking data from the FDA Orange Book with data from European Patent Office Orange Book: Focus on patent-protected, RLD NDAs

Reference Listed Drugs (RLDs): Designated by FDA to be imitated by generics To prevent biochemical differences between brand-name drug and generic versions

The “core” drug

Patent-protected NDAs: NDAs that list patents (appear in PATENT.TXT – see Appendix)

Data processing automated via Python and GNU text processing

Open Patent Services (OPS) Online European Patent Office database containing patent info

Data from European Patent Office, US Patent Office, Japanese Patent Office

Patent family data, legal data, and bibliographic data For example: Classification Symbols (International or European), Abstract, Inventor Name

Python code accesses OPS via SOAPpy (Python SOAP implementation) Given patent number, can retrieve assignee name(s)

The number of RLD NDAs approved per year is slowly increasing Since 1982, approximately 20% of all NDAs are RLD NDAs

The number of RLD NDAs approved is less variable than the number of total NDAs approved

NDAs Approved Per Year

0

100

200

300

400

500

600

700

800

900

NDAs

Yea

r Total NDAs

RLD NDAs

Most drugs (RLD NDAs) are protected by very few patents

Average RLD NDA lists 2.69 patents

269

169

118

48 45

20 168 7 4 4 7 2 0

0

50

100

150

200

250

300

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Patents Listed in NDA

ND

As

There appears to be little evidence of “platform technologies”

Average patent is listed in 1.40 RLD NDAs

1036

225

6930 15 6 1 0

0

200

400

600

800

1000

1200

1 2 3 4 5 6 7 8

Drugs Covered by Patent

Pa

ten

ts

* There are 22 patents that cover 5 or more drugs each. Half of these patents concern two areas: 5 are related to treatment of the HIV or AIDS virus and 6 cover methods of production of microcapsules.

The companies with the most drugs (RLD NDAs) tend to be “big pharma” firms

152 (29.5%)516284Total By Top 10:

21 (87.5%)2416Eli Lilly

1 (2.8%)3618Aventis

41 (78.8%)5223Merck

28 (56.0%) 5023Abbott Laboratories

4 (8.7%)4624Pharmacia and Upjohn Co.

8 (12.9%)6225AstraZeneca

23 (50.0%)4629Pfizer

6 (17.1%)3530Bristol Myers Squibb

19 (28.4%)6738Novartis

1 (1.0%)9858GlaxoSmithKline

Number (Percentage) of Those Patents that is Owned by Company

Total Number of Patents Covering all of Company’s

RLD NDAs

Total RLD NDAs by Company

Company Name

* Subsidiaries and mergers ARE NOT considered

Subsidiary companies and mergers play an important role in the pharmaceutical industry

413 (64.0%)645351Total By Top 10:

18 (64.3%)2819Roche

41 (78.8%)5223Merck

32 (64.0%)5023Abbott Laboratories

32 (62.7%) 5126Sanofi-Aventis

38 (60.3%)6326AstraZeneca

13 (34.2%)3833Bristol Myers Squibb

35 (52.2%)6738Novartis

51 (71.8%)7139Johnson and Johnson

75 (72.8%)10360GlaxoSmithKline

78 (63.9%)12264Pfizer

Number (Percentage) of Those Patents that is Owned by Company

Total Number of Patents Covering all of Company’s

RLD NDAs

Total RLD NDAs by Company

Company Name

* Subsidiaries and mergers ARE considered

61.0%326199Total by Top 10

47.8%2311Abbott Laboratories

63.2%1912Roche

52.2%2312Merck

81.3%1613Eli Lilly

53.8%2614Sanofi-Aventis

83.3%1815Schering Plough

55.3%3821Novartis

59.0%3923Johnson and Johnson

60.0%6036GlaxoSmithKline

65.6%6442Pfizer

Percentage of Total NDAs by Firm:Total RLD NDAs by firm:NDAs filed:Name:

“In-licensing” plays a significant role for more than 50% of drugs

* Firms with the most drugs (RLD NDAs) where the drug maker owns all the patents protecting the drug

“Out-licensing” varies significantly by firm

451 (76.7%)588Total by Top 10:

18 (52.9%)34Roche

32 (94.1%)34Abbott Laboratories

38 (90.5%)42AstraZeneca

11 (25.6%)43Takeda Chemical Industries

35 (77.8%)45Novartis

32 (65.3%)49Sanofi-Aventis

41 (65.1%)63Merck

71 (85.5%)83Johnson and Johnson

78 (90.7%)86Pfizer

75 (68.8%)109GlaxoSmithKline

Patents owned by firm in Orange Book that cover firm’s own drugs (RLD NDAs)

(% of total patents owned)

Total patents owned by firm in Orange Book (cover RLD NDAs):

Name:

* Firms by most patents owned on RLD NDAs in the Orange Book

Certain families of drugs tend to be covered by “patent-thickets”

Oval – patent

Line – shared NDA

Close-up view of a sample “patent-thicket”

Oval – patent

Line – shared NDA

* 13 of the 16 patents in this thicket belong to Merck and Co, Inc. The three patents that do not belong to Merck are highlighted. There are a total of 4 NDAs “shared” between the patents in this thicket. Three of these are different NDAs for Merck’s drug Fosamax, and the other is an NDA for Procter and Gamble’s drug Actonel. Both of these drugs are used to treat osteoporosis.

Oral liquid alendronate formulations

Method for inhibiting bone resorption

Research Institutions are active in filing joint-patent Applications

2Acad. Of Science Czech Republic

2Brigham and Women’s Hospital

2Ceskoslovenska Akademie Ved.

2Gen. Hospital Corp.

2Takeda Chemical Industries Ltd

2University of Texas

2University of Houston

2University of California

2Schering AG

2Novartis

4REGA Stichting

4Merck

4Kaiser Permanente

5GlaxoSmithKline

6Alkermes, Inc.

8Johnson and Johnson

Joint Patent Applications Filed:Organization:

Research institutions are HIGHLIGHTED

*46 out of 1382 (3.3%) patents on RLD NDAs in the Orange Book have multiple applicants. A sample of 1744 random patents was found to have a slightly higher percentage (4.4%) of patents with joint applicants. The difference in ratios was statistically significant at a 90% confidence level, but not at a 95% confidence level.

The relationship between patenting, drugs (RLD NDAs) and R&D is very complex

Shading: R&D expense, not including subsidiaries (lighter = more spent)

Size: proportional to number of RLD NDAs (also in parenthesis)

Distance to diagonal: dependency of licensing

* There seems to be a general correlation between greater R&D spending, more RLD NDAs and more parents covering those NDAs. However, this pattern does not apply to Sanofi-Aventis and Roche (high R&D expense, few NDAs) and Bristol Myers Squibb (many NDAs, few self-owned patents).

Conclusions / Summary

There are only 2491 drugs (RLD NDAs) listed in the FDA Orange Book 717 are patent protected

Fewer than 1382 patents cover all drugs (RLD NDAs) approved since 1984

Firms try to be self sufficient For close to 60% of their RLD NDAs, own all the patents listed in the NDA

One-fourth of patents in the Orange Book are out-licensed

But collaboration still necessary Acquisition of subsidiaries plays major role

Joint-patent applications show small, but important effect of non-profits

Licensing, joint-ventures needed also Own R&D and subsidiaries not enough to provide firms with the patents they need to protect all of

their drugs (RLD NDAs)

Conclusions / Summary

Effects of the Hatch-Waxman Act Generic vs. brand-name drug competition

Benefits: Forces collaboration and more research by big pharma firms

Stimulates innovation: Pharmaceutical companies need to keep developing new drugs, because older

drugs replaced by cheaper generics

Thank You

Questions/Answers

Format:Column 1: NDA NumberColumn 2: Patent Number Column 3: Patent Applicant Name Column 4: Country of Patent Applicant Column 5: NDA Applicant Name

Sample Data:

004782 5210081 AMERICAN HOME PROD (US) WYETH PHARMACEUTICALS INC010971 5210081 AMERICAN HOME PROD (US) WYETH AYERST LABORATORIES011522 6384020 SHIRE LAB INC (US) SHIRE DEVELOPMENT INC013217 6407128 ELAN PHARM INC (US) JONES PHARMA INC013718 5872147 BIO TECHNOLOGY GENERAL CORP (US) SAVIENT PHARMACEUTICALS INC013718 6090799 BTG PHARMA CORP (US) SAVIENT PHARMACEUTICALS INC013718 6576659 BIO TECHNOLOGY GENERAL CORP (US) SAVIENT PHARMACEUTICALS INC013718 6670351 BIO TECHNOLOGY GENERAL CORP (US) SAVIENT PHARMACEUTICALS INC013718 6828313 BIO TECHNOLOGY GENERAL CORP (US) SAVIENT PHARMACEUTICALS INC017922 5482931 FERRING AB (SE) AVENTIS PHARMACEUTICAL PRODUCTS INC

Appendix: Data File Structure

NDA No.: Pat. No.: Patent Applicant: Country: NDA Applicant:

Appendix: Orange Book Data Details

Data available online (http://www.fda.gov/cder/orange/obreadme.htm) PRODUCTS.TXT: Information about FDA approved Drugs

PATENT.TXT: List of patents and the NDAs they site

“NDA Number” is a common field

All fields delimited by tilde (‘~’)

Sample Sizes 13,500 NDAs total in PRODUCTS.TXT

2,491 RLD NDAs

737 Patent-Protected RLD NDAs (5.5%) Our data file incorporates 717 (97.3%) of them because OPS query failed for some patents. This

means the NDAs listing only those patents were not included in the data file because the entry was

not complete (patent assignee was missing)