Anti-competitive tactics by bad actors restrict access to generic and biosimilar drugs and drive up drug costs for consumers
[WASHINGTON, DC] – Today the Senate Judiciary Committee unanimously approved legislation authored by U.S. Senators Richard Blumenthal (D-CT) and John Cornyn (R-TX) to help lower drug prices by preventing bad actors in the pharmaceutical industry from deliberately abusing the patent system.
The bipartisan Affordable Prescriptions for Patients Act would curb drug companies’ anti-competitive use of patents to prevent generic and biosimilar competition from coming to market. The Blumenthal-Cornyn legislation specifically addresses an anti-competitive tactic known as “product hopping” and an abuse of the “patent dance” process for resolving patent infringement claims for biosimilars.
“Abuses in the patent systems and the exploitation of loopholes in current law have kept generics off the market and stifled innovation. Our bill makes the patent system stronger by validating new products, spurring innovation, and protecting generics so they can come to the market and reduce the cost of pharmaceutical prices,” Blumenthal said. “We’ve worked on this bill in a very bipartisan way. I want to thank again Senator Cornyn for his leadership and others who have worked with us very constructively and I look forward to continuing our work as this bill moves to the Senate Floor.”
“For too long, some bad actors have gamed the patent system to prevent cheaper generics from coming to market and block access to lower-cost alternatives for Texans,” said Cornyn. “By targeting these anti-competitive practices, this legislation would lower Texans’ cost at the pharmacy, and I’m grateful to my colleagues on the Judiciary Committee for their support of this legislation.”
Some pharmaceutical manufacturers have been deliberately abusing the patent system to prevent potential competitors from entering the marketplace through tactics like “product hopping” and abuse of the “patent dance” process.
The Affordable Prescriptions for Patients Act puts an end to practices that prioritize profits for pharmaceutical companies ahead of Americans’ health. By putting an end to abuses of our patent system, the Affordable Prescriptions for Patients Act will pave the way for generics and biosimilars to compete with branded drugs, and aggressively lower drug prices for consumers in the process.
Product Hopping: Product hopping is a practice that bad actors in the pharmaceutical industry engage in when their exclusive right to a drug is about to expire, but they do not want to compete with generic alternatives. Rather than simply competing on the merits with their old drug and any generic alternative, companies manipulate the market to move patients off the old drug and onto the new. They “hop” patients from branded product to branded product by engaging in a variety of practices to disadvantage their old drug, including destroying the inventory of their old drug, pulling it from the market, aggressively raising the price, badmouthing their old drug, or even diminishing its safety. Then, when the market protections for the earlier drug expire and a generic or biosimilar alternative comes to market, it is difficult to switch patients to the cheaper generic or biosimilar. As a result of this abuse of the patent system, patients are stuck paying high costs for a drug that is substantially similar to their old one for many years to come.
The bill puts an end to this practice. It prohibits branded drug manufacturers from engaging in anticompetitive product hopping and facilitates entry to the market for generics and biosimilars, driving down drug costs.
Patent Dance: “Biosimilars” are to biologics what generic drugs are to branded drugs. In 2010, Congress enacted a law designed to resolve any patent litigation quickly before a biosimilar is introduced to the market, creating a patent dispute resolution process known as the “patent dance.” Under current law, however, there are no limits on the number of patents that a branded manufacturer of biologics can assert during the patent dance – leading some companies to abuse a process designed to facilitate biosimilar entry, not hinder it.
This bill places a reasonable limit on the number of patents a manufacturer can contest. This will help deter branded manufacturers of biologics from gaming the system to increase the number of patents they assert, while preserving the incentives provided by the patent system to encourage the core innovation that produces new biologic treatments in the first place.