The cost to the Brazilian Unified National Health System of the extension of drug patent terms

Abstract

The sole paragraph of Article 40 of the Brazilian Industrial Property Law determines the extension of the patent term in case of delayed prosecution, guaranteeing 10 years of protection from grant. Originally conceived as an exception, this provision became the rule in the case of drug patents, prolonging period of exclusive exploitation. This situation impacts both the out-of-pocket spending by families and the budget of the Brazilian Unified National Health System (SUS). This study explores the cost to SUS of extending the patent term for nine drugs, which delays the launch of generic or biosimilar alternatives. Three groups were analyzed: (a) four patents already extended; (b) three that will be extended if granted; and (c) two drugs with mailbox patents that are in the public domain, but that may have the extension granted by court order. Based on the unit values and the total amounts of purchases by the Logistics Department of the Ministry of Health (DLOG), a total expenditure of BRL 10.6 billion on the nine drugs from 2014 to 2018 was estimated. The total projected expenditure for the respective extension periods was thus BRL 6.8 billion. A market price search for generic alternatives yielded potential savings of BRL 1.2 billion in expenditures by DLOG on four drugs alone. Finally, based on the minimum, average, and maximum market price reductions, potential savings of up to BRL 3.9 billion were estimated for DLOG on the purchase of the nine medicines, if the patent terms were not extended.