Jocelyn Ulrich of the Pharmaceutical Research and Manufacturers of America (PhRMA), testified at the Senate Committee Hearing
23 May 2024NewsBig PharmaSarah Speight

Senators grill witnesses in bid to pin patent abuse on Big Pharma

US Senate committee accuses drug companies of ‘gaming’ the patent system | Industry representatives interrogated during hearing | ‘Playing games with patents has to stop’, says one Senator.

Representatives from the medical and pharma industries faced a grilling this week as US senators accused Big Pharma of patent abuse to keep prescription medication prices high.

At the Senate Judiciary Committee hearing on Tuesday, May 21—which lasted almost two-and-a-half hours—senators across the political divide questioned both manufacturers and pharmaceutical lobbyists in a bid to uncover what they believe is the bitter truth.

Brand-name drug manufacturers have for many years been accused of tactics such as evergreening, patent thickets, product hopping and ‘pay-for-delay’ settlements to prevent generics and biosimilars from entering the market.

Senator Dick Durbin, chair of the committee, said: “Too often the prices charged by Big Pharma do not reflect a scientific advancement; rather, they’re the result of skilled lawyers manipulating the patent system and skirting our nation’s competition laws.”

Among other examples, he cited the blockbuster drug Humira, which AbbVie introduced in 2002 and is possibly the most well-known example of patent abuse.

“For more than 20 years, the company exploited international property laws to build a thicket of 165 patents that allowed Humira to avoid competition,” he said.

“The result, $20.7 billion in revenue to AbbVie in 2021 alone and over $200 billion in revenue over Humira’s 20-plus years of exclusivity.

“You know what’s going on even if you have a beginner course in this business. The patent system is being manipulated and used by the attorneys to extend the patents’ life to avoid competition, generics and bringing down the cost.”

‘Sheer greed’

Senator Lindsey Graham said: “Count me in for challenging the patent system. Count me in for trying to find ways to help the American consumer versus people in other countries.

“I’m very open-minded about stopping abuse. What I don't want to do is kill the goose that laid the golden egg. I don't want to create a system where we stop developing new drugs that enrich our lives.

He added: “The gold is to enhance medical science and deal with sheer greed, for lack of a better word. This has to stop…I want you to make a profit but the idea of playing games with patents has to stop.

“If a generic works, it works.”

Five witnesses testified before the panel, including Arti Rai, Elvin R Latty distinguished professor of law at Duke Law.

She focused on the ways in which bio-pharmaceutical patents of “questionable validity” create substantial challenges for competition.

Rai presented three aspects of that challenge, “all of which relate to patents of dubious patent validity”.

“Fortunately, dubious validity can be addressed through surgical responses,” she said.

Those responses are: “greater coordination between the PTO and FDA; limits on patent assertion when the patent is an obvious variant of a patent that has already been found obvious; and ensuring the continued vitality of the PTAB”.

Rai praised the committee’s work, led by committee chair Senator Durbin, and noted the Federal Trade Commission’s action earlier this month against improperly listed patents in the FDA’s Orange Book.

However, she proposed that “the PTO could nip the problem in the bud by helping the FDA ensure that irrelevant patents are never listed.”

'Gaming' the system

Also testifying was Dr William Feldman, associate physician, division of pulmonary and critical care medicine at Brigham and Women’s Hospital.

Senator Graham asked Feldman: “do you believe there’s gaming of the patent system by pharmaceutical companies?”

Feldman replied: “I think there’s no question…everywhere we look, every study we do, we find gaming.”

Answering a question by Senator Jon Ossoff, who represents Georgia, whether the active ingredients in inhalers have substantially changed over the years, Feldman replied unequivocally that they had not.

Feldman revealed that there had been “some tweaks to the molecules where you get new active ingredients in the same class”. But “fundamentally, no major breakthroughs in terms of managing these diseases from inhalers.”

“So why are so many Georgians and so many Americans still paying hundreds of dollars for these devices?” Ossoff then asked.

Feldman replied: “I think it comes back to what we’re focused on in this hearing today, which is these problematic patenting practices: product hops, where companies are taking decades-old active ingredients, getting patent protection for the delivery devices for other aspects of the products, and it allows them to keep prices high by limiting generic competition.”

David Mitchell, president and founder of Patients for Affordable Drugs, is also a patient with incurable but treatable blood cancer, and relies on “drugs costing hundreds of thousands of dollars a year”, according to Durbin.

Senator Sheldon Whitehouse asked Mitchell: “What do you think are the red flags that we should be looking at where anti-competitive use of the patent system is signalled, as opposed to pro-innovation use of the patent system?”

Mitchell referenced Humira. “Those patents, which began to expire in Europe in 2018, led to prices in Europe that were 15% of the prices that we paid in this country until Humira competition finally hit the market last year.

“So, look for the number of patents, look at what’s happening abroad. Did they give away a little bit of the market in Europe in order to protect their market here from competitors? There are signs to look for.”

Jocelyn Ulrich, vice president, policy & research at the Pharmaceutical Research and Manufacturers of America (PhRMA), was interrogated by Senator Graham, who asked her: “Do you agree there’s patent abuse in your industry?”

She replied that the group does not support “anti-competitive behaviours”, to which Graham said: “That’s not the question.”

Ulrich insisted that she believes “there are controls in place, to handle that when there is [anti-competitive behaviour].

“I think that the courts and FTC [have] immediate authority to deal with that.”

Graham responded with: “Wait a minute, you don’t think there’s a problem with pharmaceutical companies playing games with patents to keep generics out of the market?”

Ulrich replied that the current patent system has proper "checks and balances" in place. “I think it's working.”

Graham said: “You think it's working? Yeah, well, I don't.”

The hearing, ‘Ensuring Affordable & Accessible Medications: Examining Competition in the Prescription Drug Market’, was also attended by committee members Senators Chuck Grassley and Peter Welch; and witness Adam Mossoff, professor of law, Antonin Scalia Law School at George Mason University.

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