How the US patent system keeps drug prices high

FLORA LICHTMAN: This is Science Friday. I’m Flora Lichtman. Later in the hour, going way back to the age of Neanderthals to explore the origin of medicine. Plus, a reporter’s quest to discover new insect species in New York City.

But first, Americans pay roughly three times as much for prescription meds compared to other wealthy and developed nations. It’s an issue that cuts across party lines. Both the Biden and Trump Administrations rolled out their own proposals to address this, but the problem persists.

So why are our drugs so expensive? My next guest argues it’s largely to do with how our patent systems work. If that sounds wonky, hang with us. It’s actually really interesting, and Tahir Amin will tell you why. He has a really unique perspective because he’s been on both sides of this issue. He’s spent a decade as an intellectual property lawyer, helping corporations use patents to protect their bottom lines. Then he moved to India and saw firsthand how the global patent system hampered access to HIV drugs, and so he started an advocacy organization to make access to medicines more equitable. He lays it all out in a new book called Pharma Monopoly, the Battle for the Future of Medicines.

Tahir, welcome to Science Friday.

TAHIR AMIN: Thank you. Flora, thanks for having me.

FLORA LICHTMAN: Let’s just step back for a second. So we have this patent system. What was the original intent of it?

TAHIR AMIN: So the patent system was created to incentivize invention. And so the incentive was you come up with a new, novel invention, something that is not obvious to somebody in that field. Obviously, you invest some of your time and money into that. And then the system provides you with a limited time of exclusivity. So what you have now is a system where from the date of filing a patent, you get 20 years of exclusivity.

The problem is today, pharmaceutical companies and other companies in different fields have worked out that I can actually have overlapping patents that extend that period of protection in order to keep competition out. And so this is where–

FLORA LICHTMAN: Overlapping patents for the same drug?

TAHIR AMIN: So for example– yeah. So if I’ve come up with a invention for a compound that goes to make the actual product, the medicine, we call it the active ingredient, let’s say. It gives the curative effect or the therapeutic effect. And then what I do then is oh, well, I need to if I’m a company, I need to then get this drug into the body. So I’ll come up with a formulation. And then I realize this drug can also be used on several different indications, different conditions. So for example, I know the mechanism of action of the molecule can be used to treat, let’s say, inflammation. So I will test it on all the different types of inflammation.

It’s the same drug, but each time I get an FDA approval for each of those conditions, I get a separate patent. And this then adds on the layers. And then I can also formulate it so that when I release it, when I launch the product with its first form, it might be an intravenous form, and then I can switch it to an injectable form, and that adds on new life to the patent.

Now, the argument from the industry is well, eventually the patent on the original form will run out so that competitors can use that. But the market is much more complicated than that because what companies do is they switch patients onto the new form. And so the clock restarts again and the monopoly restarts again.

A great example of that is the drug, the cancer drug KEYTRUDA, which is on the market, one of the best selling drugs ever. And what Merck has done is they’ve now launched an injectable form of the drug. It was previously delivered in an IV form. And so now they’re trying to switch the whole market over to the injectable form before its patents run out, so then they got a new level of protection around the injectable form, and then the clock restarts. And they’ve basically cannibalized any market that might exist for any competitor coming in.

FLORA LICHTMAN: Is there any limit to the number of patents that a company can attach to a single active ingredient?

TAHIR AMIN: There is a limit to the active ingredient that a company can apply for. So you’ll get the original patent, which covers the active ingredient. But beyond that, there is no limit on the variations you can file patents for. There are an endless– there’s a whole menu of variations you can apply patents for, and this is why companies can rack up anywhere up to 300, maybe even more patents, filings on a particular drug. We found that with the GLP-1 drugs, for example, Ozempic, Wegovy, AbbVie’s drug Humira had over 300 patent applications by our count, at least.

FLORA LICHTMAN: And then the upshot is that this prevents cheaper generics from going to market, right?

TAHIR AMIN: Absolutely. What ends up playing out is companies, competitors have to then litigate through all these patents, because inevitably, it’s going to become a litigation game. So think about it this way. It can cost a branded pharmaceutical company around about $30,000 to $40,000 to file and get a patent. It costs millions to litigate each one. And as a competitor, I basically say it’s not worth my while trying to battle all the way through all these patents. And what ends up happening is companies settle, and usually with some kind of settlement, there’s a delay when the competitor can enter because that’s the agreement.

FLORA LICHTMAN: The counterargument I’ve heard is that companies invest all this money to develop new drugs. What is your perspective on that argument?

TAHIR AMIN: So I think we often take as a given that it takes billions to develop a drug. That is a figure that has been thrown around for almost two decades now. But I would actually like to reframe that whole argument and saying, how can we know much these drug costs to develop when we have never seen the actual figures? These are nontransparent numbers. They live in a black box. It’s a guarded commercial secret.

And so really, I think we can say, yes, it does cost a lot of money because obviously testing, clinical trials, and research will cost money. But is it the billions that we’re often told that then justify all these practices that the industry then uses to be able to, say, charge high prices, we want more patents, we want more, longer monopolies? No one knows how to make policy in this area when you’re not actually seeing the evidence. We’re taking the industry’s word as gospel.

FLORA LICHTMAN: I wanted to ask you about a specific anecdote that came up on the show very recently. I talked to a researcher who was studying how the shingles vaccine has been correlated with lower dementia risk. And he was like, and I hope someone listens to this because I can’t get a clinical trial started because there’s no financial incentive to do it because the shingles vaccine patent expired, which seemed wild because of the number of people that are affected by dementia. Is this a representative story, and is there something to do about that?

TAHIR AMIN: That’s a great example. I think a lot of diseases which are not profitable in the market, or because there’s no patent to basically allow a company to profit from it, get left by the wayside. Interestingly, with the Ebola issue coming at the moment, we have a couple of vaccines in the marketplace. But back in 2014, when the first breakout happened, there was basically this monoclonal antibody, I believe, that was sitting on the shelf. And it only actually got utilized at the very last minute, and it wasn’t utilized in the area in West Africa where it was needed. It was only when, I think, it was a Western doctor that contracted Ebola was flying to the US, and that’s when it was used.

And so really, there’s a whole bunch of conditions which don’t actually get investment in because there’s no market for these companies to make profits. And so that then begs the question, what kind of system do we have? And unless the companies can get a plethora of patents around it, they’re not interested. So they’re only interested in how do I make more money out of this.

FLORA LICHTMAN: Right, which is not necessarily how do I solve the biggest problem.

TAHIR AMIN: No, and that is the problem with– the measure of our pharmaceutical industry today is not how many lives I can save, is how much wealth I can make for my shareholders, for dividends that I give back. That’s what the CEOs are measured by, in terms of their performance. Their CEOs, their salaries are measured by that. That’s actually the measure of the pharmaceutical industry today. That’s what they measure themselves by.

FLORA LICHTMAN: Great. Are there low– is there low hanging fruit here in terms of changes we should make, in terms of solutions, like one patent per active ingredient? What do you think? Where do we start?

TAHIR AMIN: So that is a great suggestion. There are academics who’ve coined this, one and done. You get one exclusivity.

You have to remember, the patent is not the only exclusivity system in the game. When a drug gets approved, the FDA grants what is called a marketing exclusivity. So this idea that we need all these exclusivities to give the ROI that this company needs, we’ve actually overincentivized them. And so basically, the one exclusivity system would be great.

But I think we need to go further than that. We need to build public manufacturing systems that basically can provide a counterbalance to the private sector. They’re never going to behave unless there’s actually an alternative. And we need to start creating that alternative, and some of the things that have happened in California, for example, with CalRx, where there’s public production of insulin. But how do we develop drugs through public channels, from beginning to end? There’s so many options on the table. It just needs political will to create an alternative system that would push back against the private stranglehold that we’re in.

FLORA LICHTMAN: Do your old corporate intellectual property lawyer friends like to argue with you across the dinner table about this?

TAHIR AMIN: Oh, yeah, No. Actually, what’s interesting is I sit with– I’ve sat with a lot of scientists at pharmaceutical companies. I’ve sat with a lot of lawyers. And many lawyers, actually, secretly– they’ll never go on record– but secretly say, actually, the system’s a mess. So even the more reasonable corporate IP lawyer recognizes there are fundamental problems.

And then you speak to scientists. I mean, I have scientists on my team who’ve worked in the industry for over 40 years who say a lot of the stuff that we grant patents for, they’re not novel, they’re not new. But what we’ve done is the policies that we’ve created over the last 40 to 50 years, we’ve shrouded it all in this very broad term of innovation. And innovation can mean anything.

And this is where I think the integrity of the patent system has totally been diluted, because of innovation policies in order to drive more products. More products does not mean new science. It’s very two different things. But we’ve been caught up in this cultural aspect of innovation that drives everything today, and we don’t question it. The moment you question innovation, you’re kind of like a pariah.

FLORA LICHTMAN: Tahir Amin is the co-author of Pharma Monopoly, the Battle for the Future of Medicines, and a co-founder and CEO of IMAK, Initiatives for Medicine, Access, and Knowledge. Thank you for being here today.

TAHIR AMIN: Thank you. Appreciate it.

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