After a pharma lobbying blitz, Congress softens legislation on drug patents

NIcholas Florko

Media Article 9 Jul 2019

WASHINGTON — Pharmaceutical companies appear to have succeeded in watering down legislation that would have made it harder for them to protect their medicines by accumulating patents — the latest win for the industry in Congress.

The legislation was aimed at patent “thickets,” in which drug makers obtain a large number of patents to extend their pricing monopoly on any given medicine.The legislation is still in flux. Lobbyists and advocates have been scrambling for days to determine exactly how the bill’s sponsor, Sen. John Cornyn (R-Texas), intends to rework the policies after he publicly pledged to cut out the provision drug makers disliked. Cornyn even admitted this week that he could still push forward with his original bill, should the interested parties fail to come up with a compromise before the Senate Judiciary Committee votes on the bill next Thursday.

The jostling in the Senate this week — and Cornyn’s public pledge in particular — highlight just how powerful the drug industry remains in Washington, even as it seems that nearly every committee in both the House and the Senate is considering legislation that purports to rein in high prescription drug costs. Cornyn’s original patent legislation was one of the most aggressive proposals being considered by Congress.

“It loses a lot of teeth,” said Tahir Amin, co-executive director of I-MAK, a group that advocates for policies that would make it harder for drug companies to amass patents.

“‘Big Pharma’ is pulling out all the stops to water down this legislation and protect their monopoly of high-profit drugs,” said Matthew Lane, executive director of the Coalition Against Patent Abuse, which lobbies for changing the patent system to bring down drug prices.

When it was first introduced, the legislation from Cornyn and Sen. Richard Blumenthal (D-Conn.), would have given the Federal Trade Commission the power to crack down on any drug maker that uses new patents, awarded after a drug’s initial approval, to block cheaper drugs from coming to market — opening much of the industry up to a slew of federal lawsuits.

Pharmaceutical companies often use the thickets to threaten to sue other companies that consider making generic or biosimilar versions of their product, ensuring cheaper products can’t come to market.

The 12 top-selling drugs in the world are protected by an average of 71 patents each, according to a 2018 report from I-MAK. Patent thickets are standard operating procedure for drug makers, argued Amin.

He described the strategy as “scorch[ing] the earth so that nobody can step anywhere near you.”

The drug industry mobilized. Publicly, they slammed the policy as being disastrous to innovation. Privately, their army of lobbyists pushed for the patent section of the bill to be struct altogether from the bill, according to three drug industry lobbyists.

“It’s taking a lot of our attention,” one drug industry lobbyist told STAT. That lobbyist added that there have been multiple calls among PhRMA trade association members on the issue.

Another lobbyist, who complained that the drug industry was being singled out, put it more starkly: “Anything that treats our patents differently than everyone else’s, we’ve got issues with it,” the lobbyist said. “If you were trying to do the bill that Cornyn wants … and you apply that to tech, you would have had an Armageddon, right? So it’s a big deal.”

The drug industry also called on Sen. Thom Tillis of North Carolina, another Republican on the Judiciary Committee, to vocally oppose the bill, two lobbyists confirmed to STAT. Tillis acknowledged Wednesday he had raised concerns with Cornyn and his staff, although he declined to say specifically what he did not like.

“We are trying to be responsive to the senator’s concerns and appreciate his openness to working to find a solution that limits unintended consequences,” PhRMA spokesman Tom Wilbur told STAT, referring to Cornyn.

But the pharmaceutical industry wasn’t alone in its concerns with the legislation. A handful of conservative groups have also rallied against the bill in recent weeks. The Council For Citizens Against Government Waste, for example, penned an open letter to senators earlier this month urging them to oppose the bill.

“While the title and supposed intent of this legislation may seem attractive, its enactment would be devastating to patients and costly to taxpayers,” the group wrote.

The Federal Trade Commission, too, provided some feedback about concerns with the bill, a Democratic aide told STAT.

“We engaged the FTC for technical assistance to refine our bill, and heard concerns about the workability of the patent thicketing provision as originally written,” the aide explained.

The FTC declined to comment for this story.

Cornyn admitted earlier this week he had begun to rework the legislation. He explained to STAT in a brief interview that the revisions were being made in order to shore up more support among members of the Senate.

“We were encountering some resistance from members on the patent thicket approach,” Cornyn said. “We think we have perhaps found an alternative that would help us build consensus and the votes we need.”

The contours of Cornyn’s “current version,” remain to be seen.

Cornyn himself said the new version would give the Food and Drug Administration, rather than the FTC, the authority to take on patent thickets.

Aides for Cornyn downplayed how big the revisions will be.

“There’s more than one way to skin this cat, and this approach will achieve the same goal of lowering prices,” a Cornyn spokesperson said.

The bill’s co-sponsor, Blumenthal, likewise told STAT he would continue to push for legislation that meaningfully addresses patent thickets. Blumenthal also seems poised to push the Judiciary Committee to pass provisions in Cornyn’s bill that deal with a separate but related patent issue known as product hopping — even if that means passing two separate bills.

“I want a really strong bill that meets concerns about both product hopping and patent ticketing whether it’s together or apart,” Blumenthal told STAT.

Nonetheless, advocates fear the changes will significantly water down the bill.

“The FTC would have been the right authority to take on the issues. If it is the FDA, I just don’t see how they’re going to be able to do that. … It’s not their role, they’re not equipped to do that,” said I-MAK’s Amin.

The FTC is already a law enforcement body that has experience going after similar anticompetitive conduct. The original bill also would have given the FTC the power to require drug makers repay the money they made through patent thicketing, commonly known as disgorgement. Michael Carrier, an antitrust expert at Rutgers University, highlighted this as one of the strengths of the original bill.

The change Cornyn is considering also significantly complicates the path forward for the bill.

Removing the FTC from an enforcement role would move the bill out of the Senate Judiciary Committee’s jurisdiction and into the jurisdiction of the Senate Health, Education, Labor, and Pensions Committee.

That committee’s chairman, Sen. Lamar Alexander of Tennessee, already acknowledged he is working with Cornyn to get the new language included in a separate health care package that’s working its way through his committee.

Alexander, however, did not describe changes that would empower the FDA to address patent thickets, as Cornyn had said. Instead, he suggested he was working on tweaks to make sure the 2009 biosimilar pathway law, known commonly as the BPCIA, is working as intended.

The 2009 law created a convoluted path that directs biologic drug makers and the biosimilar companies copying those drugs to agree on the exact set of patents they will fight over in court. Congress created the pathway so that drug makers could easily resolve patent disputes, hoping a simpler legal landscape would help get lower cost drugs on the market faster. However, biosimilar patent lawsuits have dragged on much longer than many in Congress intended and as a result, only a handful of biosimilars have hit the market in the U.S.

Lobbyists and drug pricing advocates told STAT they expected Cornyn to move ahead with legislation that limits the number of patents branded biologic makers can sue over.

Advocates acknowledged that if Cornyn does decide to pursue that path and the legislation is ultimately signed into law, such changes would likely speed up the years-long patent lawsuits that often keep competing drugs off the market.

They maintain however, it’s still no substitute for FTC enforcement.

“It solves a narrower problem in a narrow way,” one advocate said. “It just means that there’s going to be a lot more work to be done in the future.”

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