The U.S. Senate recently passed the “Affordable Prescriptions for Patients Act,” which aims to cap the number of patents pharmaceutical companies can claim for new drugs. Senator John Cornyn of the Senate Judiciary Committee, who introduced the bill, stated that the legislation would curb anti-competitive practices by companies abusing the patent system and reduce medication costs for patients. As various U.S. policies are implemented to lower drug costs, the biosimilar (biological medicine copies) market is expected to expand, offering significant opportunities for South Korean pharmaceutical companies specializing in biosimilars.
Global pharmaceutical giants with blockbuster drugs (those with annual sales exceeding 1 trillion won) often use strategies to prevent revenue loss once the original drug’s patents expire. A common tactic is filing multiple patents, known as a “patent thicket,” to extend market exclusivity. This strategy complicates the patent landscape by covering various aspects of the original drug, such as its composition, mechanism of action, and formulation.
According to the U.S.-based Initiative for Medicines, Access and Knowledge (I-MAK), the top 10 best-selling drugs in the U.S. as of 2021 had an average of 74 patents each. The organization argues that these overlapping patents contribute to high drug prices in the U.S.
The patient advocacy group “Patients for Affordable Drugs” highlights the autoimmune treatment Humira as a prime example, where AbbVie, the drug’s manufacturer, has maintained exclusivity for 20 years through 250 overlapping patents. The Congressional Budget Office estimates that curbing such patent practices could save the U.S. about $1.8 billion over the next decade.
The newly passed legislation limits the number of patents that can be asserted in infringement cases to a maximum of 20 per drug category. However, this cap can be relaxed if deemed justified by a court. With bipartisan support, the bill is expected to pass smoothly through the House and be implemented. The U.S. Congress believes that while the bill will address overlapping patents, it will still maintain some incentives for pharmaceutical innovation.
The U.S. Food and Drug Administration (FDA) is also considering policies favorable to biosimilar manufacturers. According to the Korea Bio-Economic Research Center under KoreaBio, the FDA is seeking public input on potentially eliminating the need for additional studies to designate a biosimilar as “interchangeable,” allowing it to be substituted for the original product. If these changes are implemented, switching prescriptions to biosimilars would become easier in U.S. pharmacies.
The Inflation Reduction Act (IRA), set to take effect in January next year, is also expected to benefit South Korean biosimilar manufacturers. Under the current system, if a patient’s annual out-of-pocket expenses exceed $8,000, insurance covers 20% of the excess, and the government covers 80%. After the IRA is enacted, the government will cover only 20% of costs exceeding $2,000, while insurance companies will cover 60%. This shift is likely to increase the preference for more affordable biosimilars, as insurers face higher costs for expensive drugs.
These U.S. policy changes present a significant opportunity for South Korean pharmaceutical companies focused on biosimilar production.
