CAPA: The Supreme Court Must Preserve IPR to Lower Drug Prices

WASHINGTON D.C. – As millions of Americans continue to grapple with high drug prices, a case before the U.S. Supreme Court surrounding the constitutionality of the Patent Trial and Appeal Board (PTAB) has taken on national significance for this growing national problem.  That’s why the Coalition Against Patent Abuse (CAPA) last week filed an amicus brief with the Court in its review of Arthrex Inc. v. Smith & Nephew Inc.  In the brief, CAPA outlined its concerns regarding the lower court’s decision to eliminate job protections for PTAB judges who were tasked by Congress to ensure that issued patents meet patentability standards.

Erroneously issued patents monopolize medical therapies, making them unaffordable or inaccessible to numerous Americans.  The Inter Partes Review (IPR) proceedings that the Board conducts have repeatedly and successfully struck down such bad patents, enabling competition and dramatically lowering prices.

As CAPA outlined in its brief, by eliminating job protections for PTAB judges, the Federal Circuit has opened the door for greater political influence in patent decisions made by PTAB judges and ultimately putting patients at greater risk.  Congress intended for the IPR process to simply be a way for the USPTO to correct mistakes, and allowing such influence would oppose that intent.

“The PTAB’s ability to conduct inter partes review proceedings free from political pressure is critical to addressing the pressing policy crisis caused by ever-lengthening patent monopolies that has resulted in rising drug prices and limited access to medications that American patients rely on.  At the end of the day, IPR proceedings conducted by the Board must remain apolitical and ensure outcomes are decided on the basis of science and law rather than politics,” stated CAPA Executive Director Matthew Lane.

The Following Arguments Were Made In CAPA’s Amicus Brief:

1. Inter Partes Review Is Necessary To Stop Big Pharma From Gaming The System

  • In the eight years that it has been in effect, inter partes review and related patent challenge proceedings have proven effective in overcoming abuse of patents that improperly block competition, raise prices, and stifle future innovation.
  • When pharmaceutical firms were able to obtain questionable patents that wrongly blocked generic competition, the improperly extended monopolies created unnecessary financial hardship for Americans and the U.S. healthcare system.
  • In instances where the Board declared patents erroneous during an IPR proceeding, studies have shown that the cancelling of those patents allowed competition that could lower drug prices by up to 98% simply because multiple new competitors were allowed to enter the marketplace.
  • Ultimately, the Board has proven to be an effective venue in part due to the fact that administrative patent judges have the qualifications to understand complex technological facts in patent cases and apply patent law to those facts objectively, such that judicial review affirms the Board over 80% of the time.

2. Impartiality In The Patent Review Process Is Vital To Increasing Americans’ Accessibility To Medicine

  • Congress structured the Board to conduct inter partes reviews impartially based on the law, largely free of political pressures, including from the pharmaceutical industry. Impartiality is necessary for fair adjudication.
  • A wrong decision in this case could impose widespread implications for the health of all Americans and the Supreme Court should apply to inter partes review that classic principle of medicine: first, do no harm.

IPR has been a proven tool for cutting legal costs and a key tool for cancelling invalid patent claims, which can reduce or eliminate patent thickets around important medicines.  Since the system was created by the America Invents Act in 2011, it has saved over $2 billion in deadweight loss by reducing the cost of determining patent validity and has also been used to invalidate patents that were weaponized against small businesses and governments.  Moving forward, Congress should pass bipartisan drug reforms that include reforms to the U.S. patent system to strengthen the IPR process as an efficient alternative to correct errors in issued patents.