Supreme Court Case Could Threaten America’s Ability to Lower Exorbitant Drug Prices, New Policy Brief Warns

Press Release 11 Oct 2017

Intellectual property lawyers, scientists and health market experts at I-MAK examine upcoming U.S. Supreme Court case that could have far-reaching implications for Americans’ health and economic security

NEW YORK – With the majority of voters on both sides of the aisle saying Congress’s top priority should be lowering high drug costs, an upcoming U.S. Supreme Court case could significantly hamper the country’s ability to lower the price of medicine and assess and remove unmerited pharmaceutical patents. In a new policy brief released today, scientists and lawyers at the Initiative for Medicines, Access & Knowledge (I-MAK) examine the little-discussed health implications of Oil States Energy Services v. Greene’s Energy Group, which will address the constitutionality of the U.S. Patent and Trademark Office’s process to help make sure patents meet legal requirements.

“One of the big reasons drug prices are so unaffordable is that pharmaceutical companies are over-patenting life-saving drugs when there is no new invention that justifies the monopoly they get as a result,” said Tahir Amin, I-MAK’s co-founder and director of intellectual property. “While still less than five years old, the bipartisan-created Patent Trial and Appeal Board has proven to be an objective arbitrator, advancing both U.S. ingenuity and the interests of taxpayers and the public. Just this past month, we saw Allergan exploit loopholes in the law to avoid public scrutiny and block competition in the market. Without tools to inject much-needed checks and balances into our patent system, the United States will lose a critical asset for removing the unmerited patents that are a root driver of high drug prices.”

In 2011, Congress established the USPTO’s Patent Trial and Appeal Board (PTAB) through the Leahy-Smith America Invents Act to curb the spread of unmerited patents, stop abusive litigation and ensure companies and individuals who deserve their patents are working on a fair playing field. The PTAB and its evaluation processes allow for public participation and transparency in the U.S. patent system, similar to long-standing processes in the European Union and developed nations around the world.

I-MAK’s new policy brief details how the PTAB and its inter partes review (IPR) process are working to help lower drug prices and fix the problem of bad patents in our system – and what the U.S. stands to lose if the Supreme Court rules against this bipartisan measure:

  • Patent Trial and Appeal Board Advances Public Interest: The U.S. patent office grants about 5,000 new patents each week and since its inception, the Patent Trial and Appeal Board has taken up a total of 4,500 cases – a fraction of the millions of active patents. In the face of industry’s reliance on over-patenting, the board has helped restore the integrity and strength of the U.S. patent system.
  • Unmerited Patents are a Root Cause of High Drug Prices: While a proportion of patents granted are merited, unmerited patents inevitably slip through the cracks. Each unmerited patent granted allows a pharmaceutical company to artificially inflate the value and price of a product. For example, companies will patent “new” versions of the same drug—whether it be a different dosage amount, faster dissolving tablet or just a different combination of already existing drugs with no meaningful benefits to the consumer – instead of investing in true innovation. As a result, many patients can’t afford the medicines they need. In fact, 85 percent of people in the U.S. who have been diagnosed with hepatitis C will not receive the treatment they need this year, largely because of the high cost and payers—like insurance companies and Medicaid –denying treatment or rationing to those who are sickest.
  • Supreme Court Case Could Reverse Early Progress: The Patent Trial and Appeal Board has laid a strong foundation for addressing major national challenges from high drug prices enabled by unmerited patents as well as frivolous attempts to monopolize markets. The Supreme Court case takes on additional weight in an industry where companies have chosen to let the pipeline of novel and non-obvious products take a backseat to putting more money directly into shareholders’ pockets and towards lobbying against measures that would rein in drug prices. If the Supreme Court rules in favor of Oil States Energy Services, the U.S. will lose a major tool for knocking down unmerited patents and protecting the integrity of the patent system.

The brief advises that while the Supreme Court’s decision will have a long-term impact on drug prices, ultimately, the problem of unmerited patents must be addressed at its root. Systemic reform is needed to strengthen the U.S. Patent and Trademark Office and equip industry and federal reviewers with appropriate incentives and resources to increase patent quality and prevent sub-par patent applications from being approved in the first place.

Over the last decade, I-MAK’s team of scientists, lawyers and health experts have helped people across 49 countries get the expensive drugs they need, faster and cheaper, saving up to 93 percent off the branded drug price. In India, I-MAK’s successful patent challenges against three HIV drugs helped save global health programs in low and middle-income countries $500 million in five years, which can be reinvested to treat more than one million people. I-MAK was also the first nonprofit to file and win a patent challenge in China. I-MAK’s ongoing work in China to challenge patents on hepatitis C drug Sovaldi® could save $59 billion, or over a third of the country’s annual spending on prescription drugs, and enable immediate generic supply that could benefit patients in China and worldwide.

Download the policy brief

ABOUT I-MAK

Since 2006, I-MAK has been working to increase access to medicines around the world. I-MAK’s legal work and research spans 49 countries, eight diseases and 20 therapies. I-MAK’s wins on high-impact cases on HIV drugs has saved health programs worldwide over $1 billion. In order to stay independent and exclusively represent the interests of patients and consumers, I-MAK does not accept funding from branded or generic pharmaceutical companies. Click here for more on I-MAK’s impact around the world.

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