Legal Industry

Lawmakers say AbbVie exploits U.S. patents to protect Humira profits, price hikes

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A trader works by the post that trades AbbVie on the floor of the New York Stock Exchange March 5, 2015. AbbVie Inc said on Thursday it fought two other drugmakers to "the bitter end" to buy Pharmacyclics Inc and its hot-selling Imbruvica cancer drug, and expects the medicine to generate eventual peak annual sales of more than $7 billion.REUTERS/Brendan McDermid

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WASHINGTON, May 18 (Reuters) - U.S. lawmakers on Tuesday accused the chief executive of AbbVie Inc (ABBV.N) of profiting from Americans by repeatedly raising U.S. prices on its widely-used Humira rheumatoid arthritis drug while cutting the price abroad.

The increases should prompt Congress to pass a law allowing the Medicare federal health plan to negotiate prices with drug companies, said Rep. Carolyn Maloney, chair of the House Oversight Committee.

The committee issued a staff report that said AbbVie exploited the U.S. patent system to fend off competitors and increased the price of Humira to $77,000 for a year's supply, while the price of its cancer drug Imbruvica was raised to $181,529 per year.

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"This investigation also revealed something even more distressing: drug companies are actively targeting the U.S. for price increases, while cutting prices in the rest of the world," Maloney said.

AbbVie CEO Richard Gonzalez testified about the high cost of bringing a drug to market. He did not directly address concerns about the company's use of patents, including allegations that it applied for more than 200 patents for Humira, known as a "patent thicket," so it could file multiple lawsuits against companies seeking to sell cheaper generic, or biosimilar, versions of the medicine.

That angered Republican Clay Higgins, who pressed Gonzalez to explain the company's patent practices.

When Gonzalez attempted to defend the patents, Higgins cut him off. "They're frivolous," he said. "You have a right to make an honest profit but it's a question of whether or not it's an honest profit."

Representative James Comer, the top Republican on the committee, also took aim at AbbVie's patent practices.

"While seeking hundreds of patents on a medication or vaccine is not illegal under our existing system, it can be anti-competitive and result in higher costs," he said.

Democratic lawmakers were no happier. Representative Debbie Wasserman Schultz denounced the "greed" of drug companies while Katie Porter said: "You lie to policy makers when you tell us that R&D (research and development) justifies ... price increases."

Humira - the world's top-selling prescription medicine - is expected to have more than $20 billion in sales in 2021, according to Refinitiv data.

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Reporting by Diane Bartz Editing by Chizu Nomiyama

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