How Amgen Built a 'Patent Thicket' Around Its Blockbuster Drug to Extend a Three-Decade Monopoly

Thirty years ago, Bruce Beutler, a scientist at the University of Texas, applied for a patent with the U.S. government for a new invention. This invention later became the basis for the arthritis drug Enbrel, which has become one of the best-selling products in pharmaceutical history and a cornerstone product for Amgen.

In 2029, 37 years after Beutler first filed his patent and 17 years after the original patent expired, Enbrel may finally face low-cost competition in the United States. This unusually long period of exclusivity stems from the interconnected wall of intellectual property protections that Amgen built, the so-called "patent thicket."

This practice can extend a drug company's monopoly period beyond the standard 20-year patent term. Today, a growing number of policymakers view patent thickets as one of the factors driving up U.S. drug prices.

"It's easier to defend a monopoly on an old drug than to find a new blockbuster," said Matthew Lane, executive director of the Coalition Against Patent Abuse. "Paying patent attorney filing fees is just a drop in the bucket." In contrast, R&D costs are much higher.

Enbrel's decades-long market exclusivity is due to a combination of luck, high-stakes litigation, and routine drug patent practices. But Enbrel's patent thicket is not unique; it illustrates the importance of intellectual property to major pharmaceutical companies and the enormous profits that can be extracted through patent extensions that go beyond the spirit of the law.

Amgen did not make executives available for an interview with BioPharma Dive. In a statement, the company said: "Biopharmaceutical research is an incremental process driven by science, and continued innovation after a product's approval can lead to meaningful medical advances and improved patient experiences." Amgen added: "We believe that protecting intellectual property is essential to fully realizing a drug's therapeutic potential for patients."

Defending the blockbuster

Drug companies typically measure a product's potential by whether annual sales can exceed $1 billion. Large pharmaceutical companies have several "blockbuster" drugs, while successful biotech companies may have only one or two.

Drugs with billions of dollars in annual sales helped Amgen—once a startup biotech company named Applied Molecular Genetics—grow into an industry giant.

Enbrel was not Amgen's first blockbuster; Epogen and Neupogen each generated cumulative revenues of over $45 billion and $25 billion, respectively, before their patents expired. But Enbrel, protected by dozens of patents, may become Amgen's longest-lasting and highest-revenue product.

Its cumulative sales have already exceeded $74 billion and could approach $100 billion by 2029—a figure rarely seen in pharmaceutical history.

Profits from drugs like Enbrel help drug companies grow and, as they often say, fund research into new medicines. But companies rely so heavily on these profits that they use patents to protect subtle differences in a product's mechanism of action, manufacturing methods, and delivery methods.

Biologic drugs are more complex than chemical drugs, which also allows companies to build denser patent thickets and block lower-cost competitors for longer periods, as is the case with Enbrel.

How Amgen built a 'patent thicket' around Enbrel

The chart below shows the dozens of patents Amgen used to extend Enbrel's monopoly period to more than 30 years. Each horizontal line represents a patent and its term. The dark blue lines are the seven key patents that maintain Amgen's pricing power.

Source: Jeffrey Wu, National Chengchi University, Taiwan, article "Into the Woods: A Biologic Patent Thicket Analysis" published in the Chicago-Kent Journal of Intellectual Property. Key patents identified based on Amgen's annual reports filed with the U.S. Securities and Exchange Commission.

A new treatment for autoimmune diseases

Enbrel's origins can be traced back to the 1980s and 1990s, when university and pharmaceutical laboratories competed to improve immunosuppressants like methotrexate and leflunomide, which were effective against diseases such as rheumatoid arthritis but had drawbacks.

"They had many side effects and were not truly excellent therapies," Beutler said in an interview.

Beutler and other researchers proposed a different approach: by blocking a protein called tumor necrosis factor (TNF), inflammation and pain in patients with autoimmune diseases could be better controlled.

Beutler's team at UT Southwestern Medical Center sought to develop a drug that combined a TNF-blocking protein with another protein derived from human antibodies. This fusion protein approach differed from the mainstream research at the time, which focused on larger molecular drugs such as monoclonal antibodies (Humira and Remicade are prime examples).

Beutler's invention is documented in U.S. Patent No. 5,447,851. In 1995, his institution licensed the patent to the Seattle biotech company Immunex. Three years later, the U.S. Food and Drug Administration (FDA) approved the resulting drug, etanercept, which Immunex marketed under the brand name Enbrel.

This approval put Immunex in a difficult position. Although Immunex already had a biologic drug, Leukine, approved in 1991, producing Enbrel required different manufacturing capabilities. According to Michael Kranda, who served as Immunex's chief operating officer from 1984 to 1996, the company first built an annex facility in the parking lot next to the Leukine production plant, then outsourced production to a Boehringer Ingelheim plant in Germany.

But in the rush to bring Enbrel to market, Immunex did not prioritize filing patents on manufacturing methods or formulations, which later became a focus for Amgen.

"We were just asking: 'Can anyone produce it and meet our launch window?'" said Kranda, now senior vice president at gene therapy company Asklepios BioPharmaceutical.

However, Immunex made a key patent decision during its manufacturing push. In 1999, it obtained rights from Roche to a method for manufacturing TNF-blocking fusion proteins. Roche had filed for the patent as early as 1990, but it had not yet been granted. This decision later proved fortunate, as that patent eventually became the last line of defense against future competition.

Amgen's legal team swings into action

By 2001, Immunex, with hundreds of millions of dollars in Enbrel sales, had become an acquisition target and was acquired by Amgen in one of the largest biotech deals at the time.

Amgen immediately set about protecting Enbrel. The company filed patents one after another, building an intellectual property portfolio of at least 68 granted patents, according to an analysis by the advocacy group Initiative for Medicines, Access & Knowledge (I-MAK).

"They had 12 years without competition. I think that's enough," said Tahir Amin, co-founder of I-MAK.

Many of these patents cover manufacturing processes and formulations—extending Immunex's intellectual property defenses—as well as methods of use and delivery devices. Together, these patents form a web of legal protection that makes it extremely difficult for potential competitors to break Amgen's monopoly, even decades after the drug was first approved.

In its statement, Amgen argued that the expansion of the Enbrel intellectual property portfolio reflects hundreds of millions of dollars in research investment that has led to "meaningful medical advances and improvements in patient experience," as well as manufacturing advances that ensure a stable supply.

In filings with the U.S. Securities and Exchange Commission, Amgen listed seven key patents among the 68. Four of them (including Beutler's original discovery) have expired, but three remain in force.

Most important is the intellectual property that Immunex licensed from Roche in 1999 and that ultimately received patent protection in 2012.

The reason this particular invention could extend Enbrel's exclusivity stems from a special rule in international patent law. Because Roche filed its patent before the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) took effect, the patent received 17 years of protection from the date of publication. Under TRIPS rules (which brought the U.S. into line with the rest of the world), the patent would have expired in 2010.

The result was a windfall for Amgen. But Tahir Amin, co-founder and co-executive director of I-MAK, noted that pharmaceutical industry lobbying helped shape TRIPS. "Is it luck or design? Because they ultimately pushed for these changes," he said.

Amin also said that the 22-year gap between Roche's initial filing and final grant also reflects that U.S. patent law heavily favors granting monopolies to corporations. Patent applications can be kept alive for years by filing documents that add to the original invention and by requesting further examination after rejections. In contrast, in Europe, rejections can only be appealed twice.

"The U.S. is an outlier in this regard," Amin said. "You never have to give up on a patent application."

Competition ready, but not launched

While Amgen built its fortress around Enbrel, the U.S. government sought to encourage companies to develop lower-cost alternatives to expensive biologic drugs such as TNF inhibitors. In 2010, Congress passed the Biologics Price Competition and Innovation Act (BPCIA). The law created an FDA approval pathway for so-called "biosimilars" (generic versions of biologic drugs).

But biosimilars have not had the expected impact, partly because of patent thickets.

Enbrel, which was generating more than $3 billion in annual revenue for Amgen at the time, was a prime target for biosimilar competitors. Novartis's Sandoz division began developing a generic version of Enbrel in 2012, and four years later its Erelzi received FDA approval, becoming the agency's third approved biosimilar.

But five years later, Erelzi still had not launched, even though 30 other biosimilars had been approved in the U.S., with 21 on the market. What stood in the way of Erelzi, as well as Samsung Bioepis's subsequently approved Eticovo, was Amgen's patent thicket.

Amgen challenged Erelzi using the Roche invention and another manufacturing patent. Sandoz responded that the intellectual property was no different from earlier patents that had already expired.

However, a U.S. district court ruled in favor of Amgen in 2018, and the Federal Circuit later upheld the ruling. Novartis appealed to the Supreme Court, which declined to hear the case, ending the Swiss drugmaker's legal options and ensuring Amgen's patent defenses held.

Without generic competition, Amgen was able to maintain pricing power in the U.S. until 2029. According to a report prepared by staff of the U.S. House Committee on Oversight and Reform, Enbrel's annual list price was about $53,000 in 2017.

Amgen said that despite the high price, it has invested $7 billion since 2008 in patient support programs to help those who cannot afford the drug gain access to treatment.

Meanwhile, in Europe, biosimilars of Enbrel launched in 2016 and have captured about 40% of the market share, pushing the drug's price down to $9,200 in the Netherlands in 2017, according to the House committee report.

However, Amgen does not sell Enbrel in Europe. That task belongs to partner Pfizer, which recorded $1.4 billion in sales in 2020, down nearly $300 million from 2019, due to "continued biosimilar competition," Pfizer said.

Enbrel's exclusivity in the U.S. extended beyond 2016—when key patents would have expired without Amgen's efforts—and I-MAK estimates this could cost the U.S. tens of billions of dollars.

The industry lobbying group BIO (of which Amgen is a member) holds a different view, arguing that patents are not a barrier to biosimilar entry. The group analyzed biosimilars that have launched in the U.S. and found that, on average, they reached patients in less than a year after FDA approval. (However, biosimilars for both Enbrel and Humira launched many years after initial approval, which could significantly alter this finding.)

Additionally, Melissa Brand, BIO's director of intellectual property policy, said the group found no correlation between the number of patents companies assert in litigation and the time it takes for biosimilars to launch. She added that several biosimilars have launched while facing litigation risk, suggesting that litigation threats do not always deter biosimilar manufacturers.

Ironically, among the products launched at risk are two Amgen biosimilars: Kanjinti and Mvasi, which mimic Roche's cancer drugs Herceptin and Avastin, respectively.

Government takes notice

As long as investors continue to reward companies that maintain profitable patent monopolies, drug companies are likely to continue using legal means to do so. But under sustained pressure from lawmakers, they may be challenged more frequently.

For example, the House Oversight Committee's report indicates that patent thickets and their impact on drug prices are gaining more attention on Capitol Hill. At a May hearing, Democratic and Republican lawmakers criticized AbbVie CEO Richard Gonzalez, whose company's patent portfolio around its top-selling drug Humira extended its exclusivity to 2023.

"You have the right to earn profits and invest billions in developing new drugs," Republican Rep. Clay Higgins told Gonzalez at the hearing. "But the question is whether this is honest profit."

Legislation to limit patent thickets is in the works. Bills passed by the Senate and House Judiciary Committees would limit the number and type of patents that manufacturers of biologic drugs (such as Enbrel) can assert in lawsuits against biosimilar developers, and would apply to both marketed products and those still in development.

Given that multiple presidential administrations have failed to achieve drug pricing reform, securing a legislative victory will be very difficult. But more aggressive challenges could also emerge. The Biden administration has indicated that federal agencies may pay closer attention to patent thickets. Both the FDA and the U.S. Patent and Trademark Office have been directed to help speed up biosimilar development. President Joe Biden has reportedly been urged to nominate a patent office director willing to challenge drug patents. (He chose Kathi Vidal of Winston & Strawn last week, but it is unclear what position she might take on issues related to pharmaceutical patent practices.)

While these measures may help prevent the next Enbrel, they will not end Enbrel's exclusivity early. For now, the exclusivity period is set by court rulings, a result that has not escaped the notice of industry critics.

"They had 12 years without competition," said I-MAK's Amin, referring to the exclusivity window the FDA grants for biologic drugs. "I think that's enough."