Senate Judiciary Hears About Impact of Patent Law on Drug Prices, Competition

This story has been updated.

The Senate Judiciary Committee held a hearing Tuesday about intellectual property, patent law and the impact on drug prices, with senators from both sides of the aisle agreeing in the latest Congressional hearing about pharmaceutical costs that something needs to be done.

Most of the witnesses discussed the need to maintain innovation for new drug discoveries while ensuring patients have access to treatments for chronic diseases as well as potentially curative therapies.

David Mitchell, founder of Patients for Affordable Drugs, acknowledged in his opening statement that innovation was the only thing keeping him alive, for now. He has multiple myeloma, which is incurable, and he has already relapsed twice. His drugs costs $325,000 a year, he said.

“Drugs don’t work if people can’t afford them,” he said.

The payer representative on the panel was Joshua D. Baker, South Carolina’s Medicaid director. While he, too, acknowledged the role that intellectual property law has in spurring new innovations, he repeatedly returned to the idea that low-value marginal drugs with high costs are unsustainable for a taxpayer-financed system.

He cited inefficiencies in the prescription drug market that result from the inability of intellectual property and market exclusivity provisions to differentiate between high and low value drugs.” Baker said low-value drugs resulted in an increase to per-capita prescription drug spending of 58% over the past 5 years, or an average of an additional $50 million per year to the plan. He contrasted that with "natural growth in pharmacy spending due to increases in program participants contributed about $35 million to the program budget.”

At one point, Senator John Cornyn, R-Texas, raised the idea of giving the Federal Trade Commission (FTC) more authority to cut through patent thickets. Cornyn asked Michael A. Carrier, JD, a distinguished professor of law from Rutgers Law School, about turning to the FTC “to provide an equitable remedy.”

“I think that would make perfect sense,” said Carrier. “This is an abuse of the system and giving the FTC the power to deal with it would be a great development,” Carrier said, to murmurs from people in the hearing room.

In an email to The American Journal of Managed Care^®, a spokesman for Cornyn said the senator plans to propose a bill that would allow the FTC to bring antitrust suits against companies that use patents to shake off competition and extend exclusivity on drugs. The legislation would aim to improve patient access to less expensive drugs, but without hurting innovation or infringing on patent rights.

Judiciary Chairman Lindsey Graham, R-South Carolina, said that “one thing you don’t want to do is kill the goose that laid the golden egg,” referring to drug development, but acknowledged there was bipartisan concern about affordability issues.

“I expect us to do something on patents and prescription drug pricing this year,” he said. “I don’t know where the sweet spot is but doing nothing is unacceptable.”

Ranking member Dianne Feinstein, D-California, said she largely agreed with Graham. “For the millions of elderly Americans living on a fixed income, this may mean—does mean—the choice between paying household or other bills and paying for life-saving medication.“

Possible solutions include ending pay-for-delay deals, ending patent evergreening, and ending so-called “sham citizen” petitions to block generic drugs.

However, David S. Olson, JD, a professor at Boston College Law School, said the issue affecting pharmaceuticals is not so much patent thickets , which he said are hard to define. Rather, he suggested that patent evergreening—but a narrow version of it—is the issue.