Even More Ill-Conceived Remedies from Congress Regarding Prescription Drug Costs

By Kevin E. Noonan --

"Solving" the problem of high prescription drug prices has been on the minds of our representatives in Congress lately, and the desire to "do something" about it has reached the point that just doing something (or being perceived as doing something) has become an end in itself (see "A Solution in Search of a Problem" and "More Ill-conceived Remedies from Congress Regarding Prescription Drug Costs").  The latest manifestation of this trend is a bill, entitled the "Terminating the Extension of Rights Misappropriated Act of 2019" or the "Term Act," introduced by Representative Hakeem Jeffries (D, NY-8), that would address the drug pricing problem by "prevent[ing] [] double patenting" of claims to patents for prescription drugs.

How will the bill achieve its ends?  As set forth in Section 2(a) of the bill, it would amend 35 U.S.C. § 253 by introducing a new subsection (c) that reads:

(c) DISCLAIMERS OF DRUG PATENT TERM.—

(1) IN GENERAL.—Except as provided in paragraph (2), in a proceeding challenging the validity of patents under section 505(c) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)) with respect to a drug, under section 351(l) of the Public Health Service Act (42 U.S.C. 262(l)) with respect to a biological product, or a federal district court proceeding involving patents that are the subject of an action under section 271(e)(2), the patentee shall be presumed to have disclaimed the patent term for each of the listed patents after the date on which the term of the first patent expires, subject to the exceptions provided for in subsection (2).

(2) DEMONSTRATION OF DISTINCT INVENTIONS.—If a patentee demonstrates by a preponderance of the evidence that certain patents described in paragraph (1) cover patentably distinct inventions from the invention claimed in the first such patent to expire, no part of the term of any such patent shall be presumed to have been disclaimed, and all patent term extensions granted by the United States Patent and Trademark Office shall be respected, unless and to the extent the patentee expressly disclaims, in writing, the patent term for each such patent.

35 U.S.C. § 253(c) (emphasis added).

While a boon to generic and biosimilar companies, the provision's presumption ignores the reasons why there are various related patents in a portfolio, such as the workings of the U.S. Patent and Trademark Office with regard to imposing restriction requirements and encouraging continuation practice with its attendant requirement for terminal disclaimers.  Instead of these procedures, which differ in response to each individual application and how these inventions are claimed and examined, Rep. Jeffries would impose a presumption that the patentee would be required to rebut, this increasing uncertainty in patent protection for inventions already burdened with risk.

The bill does not ignore the Patent Office, however, having provisions seemingly directed to "getting to the bottom" of the root causes of the perceived problem.  Section 2(b)(2) provides in this regard:

(2) REVIEW.—The Director shall conduct a comprehensive review of the patent examination procedures of the Office to determine whether the Office—

(A) is using best examination practices, guidance, and procedures to avoid the issuance of patents relating to the same drug, or biological product, that are not patentably distinct from one another, and not subject to an appropriate disclaimer of patent term; and

(B) should develop and implement new practices, guidance, or procedures to—

(i) improve examination of patent applications relating to the same drug or biological product; and

(ii) reduce the improper issuance of patents that improperly extend the term of exclusivity afforded a new drug or biological product.

(3) REPORT.—Not later than 1 year after the date of enactment of this Act, the Director shall submit to the Committee on the Judiciary of the House of Representatives a report that contains—

(A) the findings from the review conducted under paragraph (2); and

(B) any recommendations of the Director with respect to the review conducted under paragraph (2).

The vigor with which the Patent Office instituted the various types of post-grant review proceedings created by the Leahy-Smith America Invents Act (inter partes review, post grant review, and covered business method patents review), and the enthusiasm with which the Office declared the existence of thousands of improvidently granted patents, no doubt played a part in persuading Rep. Jeffries that the Office would take up with equal relish an investigation of why it had so badly managed the examination procedures applied to patents on drug products.  But of course these are the same examination practices that the Office applies to all patents and patent applications; it is the perceived outcome that Rep. Jeffries doesn't like, and even that ignores the beneficial outcome of thousands of small molecule and biologic drugs developed in recent years that in many cases treat diseases heretofore resistant to therapeutic intervention.

Whether the flurry of Congressional activity coalesces into law is both unpredictable and unlikely (contrary to the reassuring fantasies of Schoolhouse Rock), but perhaps that's fortunate.  There is nothing wrong with our elected officials seeking solutions to the real problems of affordable medical care in this country.  It is just tiresome that their solutions always seem aimed at hobbling the incentives and protections of innovators responsible for producing new drugs for old (and even new) diseases and ignoring the many other bases for the problems, just because those solutions are politically more difficult to achieve.

Hat tip to Bob Stoll, former Commissioner of Patents, for bringing this bill to our attention.        

Comments

[Atari Man]

Yesterday the legislature in Albany voted to impose rent controls beyond those that already exist, which will inter alia have the effect of causing landlords to not undertake repairs in existing rental properties, and to further drive up the cost of unregulated rental units.

Earlier this year there was the scare-Amazon-away-from-Queens-and-kiss-off-billions-in-tax-revenue debacle in NYC.

Now we have this gem from another New York politician, who represents Brooklyn and - surprise! - Queens. I'll go out on a limb and venture that no pharmaceutical companies are headquartered in the 8th district, and that fewer of the constituents work for pharma than use drugs that are not FDA approved.

Keep it up. Investment money will find its way to where the returns are expected to be great. And if that's not in pharma, then there won't be new drugs.

[Suzannah]

Good grief. All these ill-conceived "solutions" seem to indicate that Congress makes decisions with less than half the facts and/or those lobbying for access to drugs today don't realize they are scorching the earth such that seeds of innovation will never result in a bounty of new drugs that are needed tomorrow (well, actually, that were needed yesterday).

The biosphere and life are ever-changing and the rate of change is increasing exponentially for many organisms. This means many drugs that work today may be ineffective in the near future. Drugs are not like other technologies such as a Boeing 747 that has a lifespan of about 30 years or the basic technology that allows us to fly. Point-in-fact: MRSA and also E. coli resistance to Ciprofloxacin. See below.

If Congress and others do not wise-up fast, we may soon find ourselves facing the bubonic plague like back in the Middle Ages.

"In the late 1940s and throughout the 1950s, S. aureus developed resistance to penicillin. Methicillin, a form of penicillin, was introduced [in 1959] to counter the increasing problem of penicillin-resistant S. aureus... 1961 ... was the so-called birth of MRSA. The first reported human case of MRSA in the United States came in 1968... MRSA is actually resistant to an entire class of penicillin-like antibiotics called beta-lactams. This class of antibiotics includes penicillin, amoxicillin, oxacillin, methicillin, and others" https://www.niaid.nih.gov/research/mrsa-antimicrobial-resistance-history

Ciprofloxacin was approved in October 1987. In 1999, about 5% E. coli isolates are resistant and by 2013 over 30% of isolates are resistant. See https://resistancemap.cddep.org/AntibioticResistance.php

"[N]ew antibiotic development has slowed to a standstill because of financial and regulatory disincentives." See
https://www.technologynetworks.com/immunology/articles/antimicrobial-resistance-the-rise-of-global-superbugs-309018

"Without effective antimicrobials for prevention and treatment of infections, medical procedures such as organ transplantation, cancer chemotherapy, diabetes management and major surgery (for example, caesarean sections or hip replacements) become very high risk." See
https://www.who.int/news-room/fact-sheets/detail/antimicrobial-resistance

[Kevin E Noonan]

The bill number is H.R. 3199, and co-sponsors are Douglas Johnson (R-GA), Debbie Muscarsel-Powell (D-FL) and Ben Cline (R-VA).