The government’s attack on drug prices is taking aim at the industry from several directions.
In addition to the price negotiations mandated in the Inflation Reduction Act, more scrutiny from the FTC and legislation aimed at Big Pharma tax breaks, members of Congress are now pushing tighter regulations around patent thickets.
The new legislation, filed in both the House and Senate, is lawmakers’ latest attempt to eliminate the practice of filing multiple, overlapping patents for the same product — often for changes that aren’t significant innovations — in order to create an impenetrable “thicket” of patents that stifle generic and biosimilar competition.
The legislation comes after the FTC challenged more than 100 patents it called “improperly or inaccurately listed” in the FDA’s “Approved Drug Products with Therapeutic Equivalence Evaluations” publication, commonly known as the Orange Book.
Pharma companies list new patents in the Orange Book as they’re added, often with questionable oversight from the FDA.
“When a brand pharmaceutical company lists a patent in the Orange Book, it may lead to a statutory stay that generally blocks the introduction of competing drug products for 30 months,” the FTC said.
Many of these patents are improperly listed and therefore unfairly stifle competition, the FTC charged.
Viewpoints on both sides of the issue strike a similar tone to arguments around drug pricing regulations in general. While industry maintains that limiting patents could chill pharma innovation,the government has countered that stymying competition keeps prices high.
Hitting from all sides
In November, the FTC sent patent-related warning letters to several companies, including GlaxoSmithKline, which delisted several of its challenged patents in response.
The warning letters came two months after the FTC issued a policy statement that aimed to put pharma companies “on notice” about increased patent thicket scrutiny.
While the FTC is challenging patent thickets from its own angle, the new legislation takes a different approach by targeting patent litigation practices.
Under the bill, pharma companies would be able to only assert one patent per patent group in litigation. It would also prohibit a patent owner from asserting multiple patents from the same thicket in separate actions against the same alleged patent infringer.
There are also potential reforms coming to the patents themselves. In July 2022, the U.S. Patent and Trademark Office said it would work with the FDA to better assess patentability and “protect against the patenting of incremental, obvious changes to existing drugs that do not qualify for patents.”
The new government actions from the FTC and Congress came after a U.S. appeals court in August 2022 said that AbbVie didn’t unfairly block competition with its Humira patent thicket.
The industry pushes back
Just as pharma and biotech are fighting the IRA, the industries are pushing back against patent thicket reforms.
Biotechnology Innovation Organization (BIO) noted that the industry has frequently asked the FDA for more clarity about which patents should be listed in the Orange Book, pointing to a GAO report that corroborated the industry’s desire for more FDA guidance on this issue. In the meantime, BIO said the FTC is overreaching by swooping into issues that should be within the FDA’s purview.
The industry has also taken issue with changes to the patent system that would only affect their industry and not others.
“Technology-specific initiatives or rules directed at only one industry could conflict with the technology-neutral U.S. patent system and could be contrary to the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights,” PhRMA said in comments to the United States Patent and Trademark Office.
