ICYMI: Senate Judiciary Subcommittee Addresses Anticompetitive Tactics Used by Big Pharma to Thwart Competition, Keep Prices High

Lawmakers Must Continue to Work with Industry Leaders, Experts to Prevent Manipulations of the U.S. Patent System

WASHINGTON D.C. – Today, the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights held a hearing entitled, “A Prescription for Change: Cracking Down on Anticompetitive Conduct in Prescription Drug Markets” to examine anticompetitive tactics used by many major pharmaceutical companies to extend market exclusivity and increase profits.  Senators on both sides of the aisle, as well as industry experts, pointed to much-needed patent reform as one way to address high drug prices. 

“Exploitations of the patent process has resulted in high prices saddled on the backs of patients, taxpayers, and the entire U.S. healthcare system.  Practices such as patent thicketing are often used by Big Pharma to maintain their drug monopolies while preventing American patients from accessing more affordable generic drugs and treatment alternatives.  Thankfully, industry leaders and lawmakers are coming together to uncover the truth behind these anticompetitive practices.  Moving forward, passing long overdue patent reforms and strengthening low-cost tools such as the inter partes review (IPR) process should remain a top priority,” stated CAPA Executive Director Matthew Lane.  

Key Quotes From Today’s Hearing Include:

  • Amy Klobuchar (D-MN): “We’ve got problems of product hopping in which brand name pharmaceuticals force patients with an established drug within an expiring patent to a new drug with a new patent, often with little or no therapeutic difference, just to avoid competition from generics. That’s a bill our friends Senator Cornyn and Senator Blumenthal have that could get at that.”
  • Mike Lee (R-UT): “I’ll be interested to hear the witnesses thoughts on . . . whether reform to our patent laws might help remove the impetus behind product hopping and patent thickets: saving money for consumers and freeing up antitrust enforcement resources to address other harms.”
  • Rachel Moodie (VP, Head of Legal and Intellectual Property, Biosimilars for Fresenius Kabi): “… the current policy debate around drug prices have failed to address the root cause of the problem, which is an excessive number of patents around drugs, many of which are low quality and do not provide true benefits to patients. Because of the misuse of patent thickets and rebates as marketing tools and product hopping as another tool to thwart competition, the U.S. branded pharmaceutical industry is not currently operating as a true free market system with downward pressure at an appropriate time.”
  • Richard Durbin (D-IL):“If you listen to Dr. Moodie, and she’s pretty convincing, the thickets that we’ve created in patent law cannot serve the purpose of research or innovation or the benefits to the consumers. It’s all about monopoly control of some of these drugs so that you can have profits for a longer period of time.”
  • Rachel Moodie (VP, Head of Legal and Intellectual Property, Biosimilars for Fresenius Kabi): “So, we see the U.S. Patent system as being an outlier now compared to other systems around the world. In the U.S. there are, of course, rules for examining patents that are working well but it’s also easy to circumvent those rules in order to do this numbers gaming where you can build up incrementally different patents of having claims of incrementally different wordings to make an army of continuation patents all derived from just one original patent filing. This ends up building a patent thicket that is both protracted and multi-layered. So, overall, we do believe that the root cause of the problem is the examination procedures and the rules that the U.S. PTO is using and that by tightening up those rules, it can help provide a more balanced patent system that can provide the benefits to both incentivizing innovation as well as allowing affordable medicines to come on to the market in more appropriate time.”
  • Richard Durbin (D-IL): “The top-12 best-selling drugs in America each have an average of 71 patents and 78 percent of all new patents are for drugs that are already on the market.”
  • Rachel Moodie (VP, Head of Legal and Intellectual Property, Biosimilars for Fresenius Kabi): “So, well, the way that the patent system is working right now is that it’s easy to circumvent certain rules that allow you to repetitively claim a similar invention over and over again. And then this means by building up the numbers of patents by a similar applicant we can’t economically clear a path through that many patents. So then you can create an inappropriate monopoly because you are shielding your patents from being scrutinized by the checks and balances that were built into the system. Also, the processes that we use to challenge patents, IPRs and PGRs, have been weakened over the years and so what would be very beneficial for third parties such as ourselves to be able to really scrutinize the patents and put the checks and balances back into the system, would be to strengthen the IPRs tools as well.”

To watch a video of today’s hearing, click here.