Amgen Patent Ploy Undercuts Healthcare Law

Amgen Patent Ploy Undercuts Healthcare Law

November 28th, 2011 // 1:13 pm @ jmpickett

There is an old saying about what a difference a day makes. Well, what about 17 years? For Amgen, or any drugmaker that wins a new patent on an existing med, that can, of course, mean untold amounts of money. And this appears to be in the offing for the biotech, which was just awarded a patent that adds 17 years of protection to its best-selling Enbrel medication.

In a very brief statement issued last night, Amgen disclosed a new patent that means competition would be kept at bay until November 2028, instead of October 2012. By then, Enbrel will have been on the market 30 years which, as The New York Times notes, greatly exceeds the 20 years of patent protection that is usually expected.

Obviously, this is a big deal for the biotech, which garnered roughly $3.5 billion in sales from Enbrel during each of the past three years. The med, which is approved to treat rheumatoid arthritis and psoriasis, accounted for about 25 percent of all product revenue last year (read the 2010 SEC filing here). Enbrel costs about $20,000 or more a year.

The implications, however, extend beyond the Amgen bottom line. This is because the new patent may could mean payers and patients will not reap some of the savings that was intended by the health care reform legislation passed last year. The law opened the door to biosimilars, presumably lower-cost versions of expensive biologics such as Enbrel.

As the Times notes, “patents 20 years from the date of application, to avoid situations like this where an invention gets extended protection because of delays or maneuvers at the patent office. But since the latest Enbrel patent was filed before the law changed, the new patent “is governed by the old rules and lasts for 17 years from the date of issuance.”

In other words, the price tag may remain high unless there is a successful patent challenge. Earlier this year, Amgen indicated competition was at least fve years away, due to other patents covering the use or formulations of Enbrel, the paper adds. Merck, for instance, struck a deal earlier this year with South Korea’s Hanwha Chemical to develop a version.

But as ISI Group biotech analyst Marc Schoenebaum notes, the new patent “provides additional barriers if biogeneric companies choose to litigate against Amgen’s patent estate for Enbrel…If biogenerics do not enter the market until 2028, we believe this patent could slow erosion, adding about $100 million in revenue every year beginning in 2019.”

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