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# Drug Company Patent Violations Cost $40 Billion: Study
- URL: https://www.fdaweb.com/drug-company-patent-violations-cost-40-billion-study/
- Published: 2023-05-17T12:00:00.000Z
- Updated: 2026-09-14T18:32:33.000Z
- Author: David McFarland
- Tags: Drugs, #legacy-id-D5154475

The American Economic Liberties Project and the Initiative for Medicines, Access, and Knowledge (I-MAK) say the “illegal and anticompetitive tactics used by the pharmaceutical industry to perpetuate monopolies — in the form of government-backed patents over brand drugs — and block competition from more affordable generic drugs” cost final payers $40.07 billion in 2019\. “This implies an average cost of about $120 in 2019 for every American, solely because of antitrust violations by the pharmaceutical industry,” the two groups’ [report](https://www.economicliberties.us/our-work/the-costs-of-pharma-cheating/?ref=fdaweb.com) says.

Economic Liberties and I-MAK identified 10 overlapping strategies used by the drug industry:

- horizontal collusion through agreements to raise prices, restrict output, rig a bidding process, allocate market share, or impose high prices or low quality across an industry rather than competing;
- pay-for-delay or reverse payment;
- non-generics agreement;
- patent abuse such as sham patent litigation or patent thicketing (creating a web of overlapping patents to exclude competition) to extend monopolies;
- product hopping and patent evergreening;
- sham citizen petitions;
- sham *Orange Book* listings;
- REMS abuse;
- exclusionary rebates; and
- acquisition of monopoly.

The two advocacy groups recommend:

- prohibiting pay-for-delay agreements between branded and generic drug manufacturers;
- reforming FDA regulations to prohibit drug manufacturers from listing device-only and REMS patents in the *Orange Book*;
- reforming FDA procedures to treat generics as substitutable equivalents to minimally adjusted versions of branded drugs;
- dramatically increasing funding and resources to antitrust enforcers to tackle the problem of repeated pharmaceutical antitrust violations;
- restricting laws around drug patent eligibility to ensure that drug companies can’t use bad-faith patent strategies to perpetually extend monopolies without creating useful enhancements in existing drug products;
- developing sophisticated systems to identify likely antitrust violations from public data and intervene before patients and payers are harmed;
- increasing penalties for corporations and individuals engaging in antitrust violations to better deter such conduct; and
- empowering the Justice Department and state attorneys general to recover damages on behalf of public health programs, such as by filing follow-on cases to private litigation.