Brazil Supreme Court rules patent extensions keep drug prices from being affordable.
The Brazilian Supreme Court has issued a ruling that will make its intellectual property law allowing long-term patent extensions unconstitutional. This could clear the way for lower cost generic versions of certain drugs to enter the market sooner. If generics can enter, drug costs will be more affordable.
As a result, pharmaceutical patents that were granted an extension will lose the additional time, and no other pharmaceutical patent can be granted an extension. The court has deemed its decision to be retroactive as well, meaning that any existing extensions will be reserved and, moving forward, patent protections will be limited to twenty years following the initial grant.
Patents are currently protected for twenty years from the date that an application is filed, as well as another ten years at the time it’s granted. The addition time has been put into place because the Brazilian patent office can take a decade or more to review applications and adding ten years of is a form of compensation to the filer.
“The Brazilian patent office takes, on average, “three years to review pharmaceutical patents and 92% of patents awarded to pharmaceutical and biotech companies were extended by three and a half years, on average,” according to Eduardo Mercadante, a PhD student at the London School of Economics. “This will have an historic impact on Brazil.”
However, consumer advocacy groups have argued that drug makers benefit from unfair monopolies with this provision. By allowing for years-long patent extensions, drug companies have more leeway to continue overcharging for protected medications. Allowing for generics to enter the market sooner would help increase access to care, making prices more affordable for those who need it.
Doctors Without Borders has estimated that “more than 70% of pharmaceutical patents that have already been granted will last longer than 20 years, and more than 80% of pharmaceutical patents under examination may win as much protection.”
“With this decision, the Supreme Court is correcting a historical mistake that led, over the past decades, to unaffordable medicines prices prevailing for longer periods of time – threatening the sustainability of the healthcare system and delaying patients’ access to lifesaving medicines,” said Felipe Carvalho, access coordinator for Doctors Without Borders in Brazil. “By applying the decision retroactively,” he continued,” the court made it possible to ensure that essential medicines for tuberculosis, HIV/Aids, cancer and other diseases already covered by patent term extensions will presumably benefit from price reductions through competition and eventually reach more people in need.”
A study from the Federal University of Rio de Janeiro that estimated “ending the extension on nine drugs could reduce government spending by about $1 billion in the period of time during which extensions were granted. The savings represent 1.1% of the Unified Health System’s budget per year.”
More than 3,500 biotech and pharmaceutical patents are active in Brazil, and about three-quarters were granted 10-year extensions, according to data compiled by the Licks law firm in Rio de Janiero. “As a result, licensing agreements would be disrupted, investment would be cobbled, and the Brazilian economy would suffer, according to the industry trade group.”