Prescription Drug Method-of-Use Patent Protection, 1991-2018

Publication Date

7-16-2025

Abstract

Brand-name pharmaceutical manufacturers set high prices during periods of market exclusivity created in part by patents that they acquire on their drugs. Patents typically expire 20 years after filing, and in addition to the ones covering a drug’s active ingredient (“primary” patents), patents may be obtained on other aspects of a drug, including methods of treating particular conditions. These method-of-use patents can extend the drug’s exclusivity period, as brand-name manufacturers can bring litigation claiming the new indications on FDA-approved generic labeling unlawfully induce physicians to infringe new patented methods of use.

In 1984, Congress gave generic manufacturers a way to avoid infringing method-of-use patents by entering the market for unpatented uses and leaving the patented uses off their labeling, a so-called “skinny labeling.” For example, AstraZeneca’s rosuvastatin (Crestor) was first approved in 2003 for reducing specific lipid levels in patients with hypercholesterolemia or mixed dyslipidemia, and for slowing the progression of atherosclerosis. By 2016, Crestor was approved for five additional indications. The skinny-labeling pathway allowed generic firms to enter the market for only the non-patented indications, saving Medicare an estimated $6.5 billion from 2016 to 2021.1

This pathway has fostered competition even though the number of method-of-use patents per active ingredient quadrupled from 2001 to 2019.2 The skinny-labeling pathway now accounts for 43% of new generic drugs3 and 67% of biosimilars.4 This pathway allows generics to enter the market soon after expiration of the brand-name manufacturer’s primary patent, which is typically after approximately 12.5 years of market exclusivity.5

Recent court decisions threaten this pathway by finding that generic manufacturers may induce infringement of method-of-use patents through seemingly harmless actions such as marketing a generic product as therapeutically interchangeable with the originator. This infringement theory is based on the idea that generic manufacturers encourage doctors to prescribe their generic drug for an off-label use that is patented by the brand-name manufacturer.

To better understand how weakening the skinny-labeling pathway might affect brand-name drugs’ market exclusivity period, we analyzed the length of additional potential exclusivity provided by method-of-use patents for small-molecule drugs.

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