“If the Patent Affordability and Integrity Act passes,” says health expert Sally Pipes, “its most likely results will be a less reliable intellectual property system, an easier time for drug patent infringers, and an abandonment of research investment that deprives patients of future discoveries.”
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This week, the Senate Committee on Health, Education, Labor and Pensions will consider several bills aimed at “making health care more affordable and accessible to American families.”
One in particular deserves a closer look. THE Patent Affordability and Integrity Actintroduced by Sen. Maggie Hassan, DN.H., and co-sponsored by Sen. Josh Hawley, R-Mo., would impose new disclosure requirements on drug companies. Proponents of the bill argue that more disclosure will prevent patent abuse, promote generic competition and lead to lower drug prices.
There is little evidence that the bill will substantially advance these goals. Worse, by adding time and cost to the drug development business, it will deprive future patients of effective new treatments if it becomes law.
Under the bill, drug manufacturers would have to certify that information submitted to the FDA is consistent with information provided to the Patent and Trademark Office and disclose additional FDA-related material to patent officers.
The theory is that pharmaceutical companies obtain patents by withholding information from patent officers that they disclose to FDA regulators.
This tactic, the thinking goes, enables drug companies to secure patents they don’t warrant — and thereby delay generic competitors from entering the market.
But applicable patent law already requires applicants to disclose patentability information. Deliberately misleading the USPTO can render a patent unenforceable in court.
It is hard to argue that the United States lacks strong generic competition. Roughly 90% of prescriptions dispensed in America are generic drugs.
The proposal, in other words, scrambles a problem that doesn’t seem to exist. And it does so in a way that dramatically undermines the incentives that drive medical science forward.
It takes on average 2.7 billion dollars over the course of a decade or more to bring a drug from the laboratory to patients. Only approx one in 10 drugs that enter clinical trials eventually win FDA approval.
The promise of an exclusive sales period offered by a patent is one of the few things that can benefit companies and investors from taking such big risks.
THE Patent Affordability and Integrity Act would call into question the enforceability of these basic intellectual property protections.
For starters, the bill would create an entirely new avenue for challenging pharmaceutical patents in court. This would give competitors a new avenue to attack patents unrelated to whether an invention is truly new.
Any company accused of infringing an innovator’s intellectual property could argue that the patent owner failed to meet the law’s disclosure requirements. The result would be costly litigation over paperwork and disclosure procedures rather than whether an invention is actually worthy of patent protection.
In doing so, the bill would make it more difficult and costly for pharmaceutical companies to protect legitimate innovations from theft.
All this additional data sharing will also expose drug companies to potentially devastating security breaches.
Much of the information surrounding experimental new treatments, particularly the information that drug companies provide to the FDA, is highly sensitive—and therefore incredibly valuable to competitors at home and abroad. Each additional disclosure obligation creates another repository of sensitive information and another potential point of vulnerability.
China was working furiously to topple the United States as the world’s leading source of medical breakthroughs. It is already proven capable of hard-hitting American IP to further this mission. According to one estimate, IP theft from China costs the US economy half as much $225 billion and $600 billion one year.
Forcing pharmaceutical companies to reveal some of their most closely guarded data to another government agency only increases the chances of that information falling into the wrong hands.
If passed, the most likely outcomes of the Patent Affordability and Integrity Act will be a less reliable intellectual property system, an easier time for drug patent infringers, and an abandonment of research investment that deprives patients of future discoveries.
