Higher Patent Quality, Lower Drug Prices: Why the USPTO Needs to Follow Europe's Lead

Alex Moss | May 26, 2025

The Public Interest Patent Law Institute (PIPLI) is releasing a new white paper, Comparing Patentability Requirements for Pharmaceuticals, Biologics, and Medical Methods in the U.S. and Europe, which offers a critical examination of how divergent patent standards are shaping drug prices, innovation, and public health outcomes across the Atlantic.

The report finds that the United States Patent and Trademark Office (USPTO) consistently applies looser, more permissive standards than the European Patent Office (EPO) when granting pharmaceutical and medical patents. This disparity is no mere technical detail—it has significant consequences for U.S. healthcare costs, market competition, and biomedical innovation. Our central policy recommendation is clear: it is time for the U.S. to harmonize its patent examination standards with those of the EPO.

This approach would not only foster a more competitive pharmaceutical market but also support the spirit of international efforts—such as President Trump’s Most Favored Nation (MFN) drug pricing policy—that aim to align U.S. drug prices with those in other developed countries. In fact, by continuing to issue low-quality patents that block generics and biosimilars, the U.S. patent system risks undermining precisely those price-reducing goals.

Key Findings

Our comparative analysis focused on three critical patentability requirements—eligibility, inventive step (non-obviousness), and disclosure (enablement):

1. Patent Eligibility:
The USPTO’s broad interpretation of eligibility allows patents on natural phenomena or medical methods so long as there’s a vaguely defined “practical application,” even when technical details are sparse. In contrast, the EPO bars patents on medical methods and strictly limits protection for naturally occurring substances unless they are technically modified and clearly described for a specific industrial purpose.

2. Inventive Step / Non-Obviousness:
Where the EPO prohibits patents on combinations of known elements if a person skilled in the art would reasonably expect success, the USPTO often requires evidence of a specific motivation to combine prior elements—raising the bar for rejection and enabling marginal improvements to receive patent protection.

3. Enablement / Disclosure:
The USPTO permits the use of “prophetic examples”—hypothetical descriptions with no actual experimental data. As a result, patents may be issued for inventions that are neither operable nor reproducible. The EPO, by contrast, demands verifiable experimental data and a plausible demonstration that the invention can be practiced across its full scope.

Why This Matters

Weak patents are not just a paperwork problem. In the pharmaceutical sector, they serve as legal barricades that delay the entry of more affordable generics and biosimilars, prolong monopolies, and inflate drug prices. When patent thickets surround a blockbuster drug—often with dozens of secondary or speculative patents—it becomes nearly impossible for competitors to enter the market, even after the original patent has expired.

This legal entrenchment not only raises healthcare costs but also warps the incentives for innovation. Rather than investing in truly novel therapies, some companies focus on extending their exclusive rights through evergreening strategies—tweaking dosages, delivery methods, or formulations to win new patents on old ideas.

In contrast, the EPO’s higher standards for patent quality encourage meaningful innovation while leaving routine medical knowledge in the public domain. This fosters a healthier balance between rewarding breakthrough discoveries and ensuring timely access to affordable treatments.

Aligning Patent Policy with Drug Pricing Reform

These findings come at a critical juncture in U.S. health policy. In 2020, President Trump introduced the MFN rule—a bold move aimed at tying Medicare drug prices to those paid by peer nations in Europe and elsewhere. Yet while MFN focuses on pricing mechanisms, the U.S. patent system continues to grant stronger, broader, and longer-lasting monopolies than its European counterparts. As a result, the American IP system is actively working against MFN goals by enabling drug manufacturers to maintain higher prices through legal exclusivity.

This contradiction cannot be ignored. A harmonized approach to patent law—particularly one that raises USPTO standards to match those of the EPO—would directly support the MFN initiative and broader efforts to make medicines more affordable. It would:

• Improve Patent Quality: Filtering out low-value, speculative patents would ensure that only genuinely novel and useful inventions receive protection.

• Lower Drug Prices: Narrower patents would open the door for generics and biosimilars to enter the market sooner, increasing competition.

• Promote Real Innovation: Redirecting R&D investments away from evergreening and toward true scientific advances.

• Strengthen Global Collaboration: Aligning with international norms would simplify cross-border regulatory approvals and research partnerships.

Call to Action

U.S. lawmakers, regulators, and stakeholders must take seriously the structural flaws in our patent system that help sustain high drug prices. Reforming USPTO practices to align with the EPO’s more rigorous, evidence-based approach is critical to remedying our country’s drug pricing crisis.

The administration’s efforts send a promising signal. Now it’s time to ensure that the patent system doesn’t undermine that vision.

Download the full white paper here.