Extensive patent strategies drive U.S. drug price disparities

How patent extensions worsen drug pricing

Extended patent strategies could cost U.S. healthcare systems over $200 billion in excess spending while delaying generic competition for years, or even decades, beyond original patent expirations, the report suggests.

While patients in several other countries already access generic versions of these medications at a fraction of U.S. prices, Americans remain locked in a system where regulatory manipulation trumps affordability.

Eliquis

Eliquis, a prescription anti-coagulant medication FDA approved in 2012, provides insight into how companies exploit regulatory levers to prolong market exclusivity. Originally set to lose its core patent protection in 2022, Eliquis received a four-year Patent Term Extension, moving the expiration date to late 2026.

A follow-on patent further delays generic entry until April 2028, adding another 16 months of market exclusivity.

According to I-MAK, these patent extensions are expected to yield an additional $50.7 billion in U.S. sales -- $39.1 billion during the extended PTE period and $11.6 billion from the follow-on protection. Meanwhile, generic versions of apixaban have already launched in Canada, the UK and the EU, where patients pay much less.

Semaglutide

Novo Nordisk has applied a similar playbook to semaglutide, the active ingredient in three of its top-selling drugs. By filing more than 320 U.S. patent applications and securing 49 follow-on patents, the company has extended its market exclusivity for GLP-1 drugs Ozempic, Rybelsus and Wegovy through at least 2042, which is 16 years beyond the expiration of the original semaglutide compound patent.

This prolonged protection is projected to generate $166 billion in additional U.S. revenue between 2026 and 2031 alone. Although litigation is ongoing, no generic versions are expected to reach the market before 2032.

International price comparisons

The I-MAK report illustrates how the U.S. pays dramatically more for the same medications than comparable countries, largely due to delayed generic access and weaker pricing regulations.

• Eliquis. Cost comparisons show U.S. patients paid approximately $521 per month in 2023, compared to $109 in Canada, $104 in the UK and $84 in Germany. Even with Medicare’s negotiated price of $231 per month, the U.S. still pays more than every international benchmark listed.
• Semaglutide. Across Ozempic, Rybelsus and Wegovy, U.S. patients pay three to eight times more than patients in comparable nations. A monthly supply of Ozempic costs around $936 in the U.S., versus $169 in Japan, $147 in Canada and $69 in France.

These disparities are not driven by manufacturing or R&D expenses. Instead, they reflect systemic differences in how countries regulate and negotiate drug prices, as noted in the report.

While peer nations use centralized price negotiations and tighter patent policies to control costs, the U.S. system permits extended exclusivity that suppresses competition.

For example, Canada already offers generic apixaban for about $20 per month --less than 10% of the U.S. Medicare-negotiated price ($231). Meanwhile, despite the FDA approval of generics in 2019, U.S. patients must wait until 2028 for market entry due to ongoing patent protection.

Why Medicare price negotiations fall short

Although the Inflation Reduction Act's Medicare Drug Price Negotiation Program is a step in the right direction, it offers only limited relief to a small percentage of Americans. Negotiated discounts of 25–60% could save Medicare up to $8.6 billion annually, but those savings won’t take effect until 2027 and only apply to Medicare beneficiaries, who make up 19% of the U.S. population.

The price negotiation program also does not reform the underlying patent system, which continues to allow brand manufacturers to file successive follow-on patents, delay biosimilar and generic entry and manipulate exclusivity timelines.

Comprehensive patent reform

The report advocates that comprehensive patent reform is a viable solution to address the root causes of inflated drug pricing. Recommendations include revising the patent system to limit excessive patenting practices, reduce barriers to generic competition and align U.S. pharmaceutical costs more closely with international benchmarks.

Without these fundamental changes, Americans will continue bearing excessive healthcare costs while facing delayed access to affordable medications, the report warned.

Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.