Giachino (00:05.0090 - 00:38.0580)
Welcome to IP Protection Matters. I'm your host, Renee Giachino. Today we are joined by Dr. Kristina Acri, a Senior Scholar at C-IP2, the Center for Intellectual Property x Innovation Policy. You can follow them at CIP2.gmu.edu. Doctor Acri is the John L. Knight Chair of Economics and a Professor of Economics at Colorado College. We'll be talking today about "patent evergreening." Welcome to the show, Dr Acri. It's a pleasure to have you join me.
Acri (00:38.0590 - 00:40.0659)
It's fantastic to be here. Thank you.
Giachino (00:40.0970 - 00:47.0619)
Before we dive into this important topic, tell us a little bit about what's going on at C-IP2.
Acri (00:48.0369 - 01:09.0459)
C-IP 2 is full of all sorts of fantastic things. There are workshops. There are meetings. There's all kinds of work that is going on for intellectual property rights of all types. It is a place to expand our horizons, to learn new things and explore the research that's being done in our own and other areas.
Giachino (01:09.0879 - 01:41.0166)
I’m excited today to explore some of those areas with you and to learn more great things. I want to start by just asking you to put on your research hat. Let's dive into some of the work that you've done in the field, analyzing the difficulties of strengthening intellectual property rights, especially in developing countries. As it relates to pharmaceutical and environmental technologies, what do you see today as the greatest barriers to enhanced IP rights?
Acri (01:41.0176 - 02:24.0539)
That's a wonderful question. Thank you. I think that there are a lot of misconceptions about what IP rights accomplish and why they are important. A lot of people in developing countries, as well as in the U.S., believe that IP rights protect large corporations. That they keep prices high and disadvantage working folks. The truth is probably about the opposite. IP rights enable innovation. That's innovation of all shapes and sizes and innovators of all shapes and sizes to bring us new and better products. We all benefit from those things and countering the misconceptions and the misinformation that surrounds IP is probably the most significant barrier.
Giachino (02:25.0039 - 02:50.0550)
You’ve also focused heavily in your research on the risks of biopharmaceutical counterfeiting. I know that you did a lot of this extensive research during and following the COVID pandemic. It raises the hair on the back of my neck to think about counterfeit drugs. It's such a frightening thought. Educate us on this. Is this really happening? Is it happening more often than we even realize?
Acri (02:50.0919 - 03:44.0850)
Unfortunately, it is happening more often than we realize. It's been a problem in developing countries for decades. But as technology allows counterfeiters to become more sophisticated, we are seeing more and more of it in the United States as well. Even within a secure drug supply chain like we have in the U.S., there are ways in which counterfeiters are able to deposit their drugs into the supply chain and get them into patients' hands.
In most cases, consumers don't even know that what they've got isn't the real thing and that it may be dangerous or even lethal. Most recently, the World Health Organization warned that counterfeit Ozempic has been found in the U.S. market. As that drug takes off in popularity, it's no surprise that with the shortages that have emerged, counterfeiters have seen an opportunity to make great profits and have jumped in.
Giachino (03:45.0210 - 04:04.0500)
If there are ways for these drugs to make it into the mainstream, how do people know? In my head the first thought would be let's not go on the internet and order this stuff. But that may not be the only channel where the counterfeit drugs are getting in. Is that what you're saying? And how do we combat that?
Acri (04:04.0699 - 05:02.0769)
It is what I'm saying. There are examples, though very few, in which counterfeit drugs have been sold by retail pharmacies. The compounding pharmacies that are making some of the Ozempic and other drugs that are being used for weight loss now have been more susceptible to counterfeiting. But it is something that can make its way into even the legitimate supply chain. It's one of those things that's very difficult to compound.
Counterfeiting is known as the second oldest profession and it's still around because it's a problem that is difficult to address. For consumers, the best strategy is to educate themselves and look carefully at the drugs they are taking. If it doesn't quite look the same, taste or smell the same, or work as one would expect, then there is reason for cause and pause, and consumers should bring that into their pharmacies or at least get the drugs checked out to make sure that they are authentic and genuine.
Giachino (05:02.0779 - 05:36.0179)
Yes, definitely a reason for cause and pause. Our guest is Dr. Kristina Acri, Senior Scholar at C-IP2 and the John L. Knight Chair of Economics and Professor of Economics at Colorado College. Together with Professor Erika Lietzan, you recently co-authored a paper. I love the title: “Solutions Still Searching for a Problem: A Call for Relevant Data to Support 'Evergreening' Allegations.” I want to start with the basics with you. What is meant by the term “evergreening”?
Acri (05:37.0529 - 06:49.0584)
And "evergreening" claims that is that when securing additional patents - so patents one after the other and other FDA-related exclusivities that are given after the approval of a drug - the charge is that brand name drug companies enjoy a period of exclusivity in the market that's longer than the initial patent would have given them and perhaps longer than we as a society would have wanted to grant them. In a nutshell, what they are claiming is that biopharmaceutical innovators are cheating the system. That they are going out and getting multiple patents on a single drug and therefore capitalizing on that and monopolizing the market for an extended period of time.
It ignores the fact that these are improvements that are being patented and that there are lots of innovations out there that may have multiple patents protecting a single product or a single innovation. If we think about the iPhone and the number of innovations that go into making it and making it work, it's certainly more than one patent and it's probably hundreds of them. So it shouldn't be surprising that there are drugs out there that also would receive multiple patents for a single treatment.
Giachino (06:49.0595 - 07:24.0549)
So there have been allegations by activists claiming that the innovators of these new drugs abuse the patent system. "Evergreening" has long been the subject of criticism and policy reform. In the research that you've done, does the empirical data support that? It seems that there are folks out there like the Hastings Database that are just churning out data and criticism, quite frankly. But does your research support that?
Acri (07:24.0890 - 08:51.0104)
It doesn't. Erica and I went through and we systematically examined the data that is in the Hastings Database. We found that while the data that they present is largely accurate in terms of drugs, the numbers of patents and the dates at which they are filed and expire, the inferences that they make are highly suspicious. They are actually probably misleading.
Our findings show that the way in which the math is done to calculate the start of patent protection and the end of patent protection is a great exaggeration over the exclusivity that companies actually enjoy. Our findings actually mirror those in a new study that was done by the U.S. Patent and Trademark Office. In their work, they find that the claims of "evergreening" are shown to be exaggerations and greatly distorted.
The U.S. Patent and Trademark study looks at a number of drugs and finds that the market exclusivity ranged somewhere between 3 years and 16 years. Both of those extremes are well below the 20 years that a patent would grant you. So the claim that this monopoly protection has continued for years and years and decades is really inaccurate and without any empirical evidence. The claims of the Hastings Database are certainly fabrications, if not outright lies.
Giachino (08:51.0325 - 09:29.0719)
Why isn't this being talked about? I'll even take it down to a little bit more of a micro level. Are you talking about this in your classroom? Is this something you can talk about and educate? A lot of people have come to rely on what they hear in the news and what they see on social media. But it takes someone like you and your colleagues diving into it for us to learn that we can't just always trust these data points that keep getting churned out.
Acri (09:29.0960 - 10:19.0869)
I think that's an excellent point. We can't just trust it. We need to critically think about it. That's one of the things that I do with my students. I give them critical thinking skills and the ability to examine these pieces of data and the conclusions that are reached. I think that it's important that good information is presented and that it is done transparently so that there is an ability for individuals, for patients, for policymakers to look at it and evaluate the claims that are being made and come to their own conclusions.
I think that when they use reliable data and look at things empirically through that lens that they can reach the conclusions that are appropriate - that there isn't a problem with "evergreening" and that the patent system that we do have is functioning exceedingly well and giving us the innovations that we need and value.
Giachino (10:20.0479 - 10:50.0510)
Let me go back to something that you mentioned earlier in our discussion and that has to do with generics. Is it always true that a generic drug cannot enter the marketplace until after a patent has expired? I think you alluded to that, but I want to make sure that we're very clear when we're talking about this that it's not a situation where they just continue to extend and block out any of the generics.
Acri (10:50.0890 - 12:00.0000)
No, they aren't blocked until after the patent has expired. It's much more complicated than that. While patents will protect and prevent replication of the same innovation, once a single patent has expired then that knowledge can be used in an innovation. So if a drug is protected by three or four patents, once the critical chemical entity patent has expired, then other patents are a lot easier to invent around. A generic firm could bring a drug to the market with the same chemical compounds. They just can't use some of the same technologies or delivery mechanisms that the original drug had.
It's also the case that drugs may not have patent protection for the full 20 years because the innovators, even generic firms will innovate, can find a way to do the same thing in a different manner. So a generic drug can come to market after that discovery has been made and it may be before the original patent has expired.
Giachino (12:00.0809 - 12:47.0380)
I want to roll back the clock 40 years to the Bayh-Dole Act. Some will say, and I think you might agree, that it's some of the most seminal legislation that's been passed, particularly when we talk about the leadership that we've had at the global level in innovation. Then we move forward about 20 years or so and we have a decision from 2006 - the Supreme Court ruling in eBay, Inc v. MercExchange, LLC. You recently authored an opinion piece in the Denver Post on that decision and what it means to us now 20 years after that decision. Does it still remain relevant? What has it meant for American innovation, small companies and entrepreneurs?
Acri (12:47.0390 - 14:17.0940)
I think it's definitely relevant today. The essence of the eBay decision was that it drastically reduced the use of preliminary injunctions in patent infringement cases. It also reduced the number of firms that would even think about seeking a preliminary injunction. We have a situation in which if you infringe my patent, I now am without the tool of a preliminary injunction to stop you. If I have no legal means of stopping you or preventing infringement, then my patent essentially means nothing. My innovation and all the time and energy that I put into that is now worthless because you can just copy it at will. My innovation isn't protected and it gives me reason to think twice about making those initial investments of huge amounts of money to create my technology.
In the past almost 20 years, the extent to which this has dampened innovation is unknown, but potentially extensive. If we could reexamine the eBay decision and perhaps give a second chance to preliminary injunctions that would be a wonderful thing. In light of empirical evidence that in a reliable way examines what the implications were of the decision and the impact that it's had on U.S. innovation, I think that is valuable both to innovators as well as to policymakers.
Giachino (14:18.0390 - 14:41.0669)
Do you think we have any hope of seeing anything like that roll out of Capitol Hill anytime soon? I know we've got several different bills being considered - the RESTORE Act, the PREVAIL Act and PERA. Pull out your crystal ball. What are you seeing?
Acri (14:42.0179 - 15:22.0570)
I think there's a good chance. We now have the ability to look at the data and say these are the implications of rulings such as eBay and say, well, was that a good thing or a bad thing? And I think that when we evaluate it, when one looks at what the data presents us with, I think there are good reasons to think that perhaps we should revisit that and think about restoring preliminary injunctions in patent infringement cases. So in that case, I am optimistic. My crystal ball is looking at a brighter future, whether those things have been restored and innovation is strengthened.
Giachino (15:22.0580 - 15:47.0710)
I like your crystal ball a lot. [Laughter] Our guest has been Dr. Kristina Acri, Senior Scholar at C-IP2 and the John L. Knight Chair of Economics and Professor of Economics at Colorado College. Dr. Acri, we thank you so much for joining us today to talk about why IP protection matters and the biggest threats that exist. I want to leave the mic open for you for any parting thoughts.
Acri (15:48.0080 - 16:20.0190)
I think the last thing that I would say is that IP protection does matter. We all benefit from it. The advances in innovations and changes that we see, whether it's in new vaccines and medicines, whether it's in safer automobiles or less expensive electronics, those are things that enrich and enhance all of our lives. Having policymaking and a regulatory environment in which that is reflected and valued would be a wonderful thing for us to strive for and improve upon.
Giachino (16:20.0520 - 16:38.0469)
Thank you so much and thank you for the work that you are doing both at Colorado College and together with the Center for Intellectual Property x Innovation Policy. To follow the work of Dr. Kristina Acri, go to CIP2.gmu.edu. Thank you so much for your time. Have a beautiful afternoon.
Acri (16:39.0000 - 16:44.0469)
Thank you.