Patent Thickets Are Driving Up Drug Prices for Millions

Why It Matters

Brand-name drug manufacturers have built a legal framework around their products that is quietly driving up drug prices for millions of Americans, according to a peer-reviewed study submitted to Congress earlier this month.

The study titled "Medicines and IP: Balancing Innovation and Access" was authored by S. Sean Tu of the West Virginia University College of Law and submitted as evidence to the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet at its June 4 hearing. It offers the most comprehensive empirical look to date at how pharmaceutical companies use a specific type of patent filing, called a "continuation" patent, to construct dense webs of overlapping intellectual property rights around a single drug.

The patent system was designed to reward new inventions with temporary exclusivity. The study argues that what's happening in practice is something quite different.

The Big Picture

What the Data Shows

The mechanism at the center of the study is a "continuation" patent, or CON. By legal definition, a CON cannot add new material to the original patent application. It discloses nothing new. It does allow a manufacturer to file additional patents from the same original application, capturing slightly different claim language, often years or decades later. The study focuses specifically on "Long CONs," defined as continuation patents filed five or more years after the original patent's priority date.

The study analyzed more than 7.5 million patent applications filed between 2000 and 2022 and linked them to subsequent litigation data. Drug manufacturers increased from approximately 1.86 patents per active ingredient in 2001 to nearly six patents per active ingredient by 2019, a threefold increase. Long CONs represent only 8.3 percent of all patent applications, yet account for 23 percent of all litigated patents. In the pharmaceutical sector specifically, 47 percent of all Orange Book patents (those listed with the FDA covering approved small-molecule drugs) are continuation patents, and 33 percent are Long CONs. Among litigated Orange Book patents, 55 percent are CONs and 36 percent are Long CONs, compared to 35 percent and 23 percent across all industries.

The study also found that pharmaceutical companies file the highest percentage of Long CONs of any technology sector. Just three industries, specifically biotechnology, software and electronics, produce 51 percent of all Long CONs combined. The pharmaceutical sector stands apart from the others in one critical way. Unlike high-tech firms, which use patent thickets primarily to facilitate cross-licensing negotiations, pharmaceutical firms use them to prevent competitors from entering the market at all.

How the System Gets Gamed

The study describes a process by which continuation patents move through the U.S. Patent and Trademark Office with increasing ease the further they get from the original application. As patents go deeper into the family tree from grandchildren to great-grandchildren to great-great-grandchildren, they face fewer substantive rejections on prior grounds. They do, however, face increasing "obviousness-type double patenting" rejections, meaning that patent examiners recognize these as obvious variations of what was already patented. Applicants overcome those rejections by filing "terminal disclaimers," a procedural tool that links the expiration date of the new patent to the original without requiring any new disclosure to the public.

The study argues this breaks the fundamental bargain of the patent system, which is meant to be a limited monopoly in exchange for public disclosure of a new invention. When the fifth or sixth patent in a family is granted on the same underlying disclosure, the public surrenders additional exclusionary rights without receiving any new knowledge in return.

A previous attempt by the United States Patent and Trademark Office (USPTO) in 2006 to limit continuation applications to two CONs was struck down after industry lawsuits and a change in agency leadership. The problem, the study concludes, has grown worse since then.

Political Stakes

The Administration's Agenda

The Trump administration has made lowering prescription drug prices a stated priority, pursuing executive action on pricing through mechanisms like Most Favored Nation pricing orders. But the study's findings complicate that approach. If the underlying patent architecture enabling brand manufacturers to delay generic competition remains intact, pricing interventions may address symptoms without touching root causes.

The study proposes several reforms, some of which would not require Congressional action. The USPTO director could increase fees for continuation applications that claim priority to multiple parent patents, a step that falls within existing agency authority. More structural changes, however, would require legislation, such as time-barring CON filings to within three years of the first office action on the original application; prohibiting narrowing CONs after two years; or abolishing terminal disclaimers as a mechanism for overcoming obviousness rejections.

The ETHIC Act, which would limit the number of patents that can be asserted in Hatch-Waxman litigation against generic manufacturers, was among the legislation discussed at the same hearing. Bipartisan interest in the issue has existed for several years. In 2022, six senators from both parties, including Patrick Leahy, John Cornyn, Susan Collins, and Amy Klobuchar, sent a letter to then-USPTO Director Kathi Vidal expressing concern about continuation patent abuse. In January 2024, Senators Peter Welch, Mike Braun, and Klobuchar introduced bipartisan legislation aimed at streamlining drug patent litigation.

Pharmaceutical manufacturers have long argued that restrictions on continuation practice would chill innovation and investment, arguments that tend to find receptive audiences in administrations focused on reducing regulatory burdens. A prior FDA-USPTO collaboration initiated under the Biden administration to address patent gamesmanship also remains in uncertain standing.

The Bottom Line

The issue here is not primarily about what drugs cost. It's about why generic alternatives take so long to reach the market in the first place. The data suggests that pharmaceutical patent thickets, built largely on continuation patents that disclose nothing new, are a primary mechanism for that delay. The study concludes that without changes to continuation patent practice at either the USPTO or through Congress, the incentives for brand manufacturers to keep building these thickets will remain intact, regardless of what happens to drug prices at the negotiating table.

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