This week, the Senate Committee on Health, Education, Labor and Pensions will consider several bills that aim to “make health care more affordable and accessible to American families.”
One in particular deserves a closer look. The Medication Affordability and Patent Integrity Act, introduced by Sen. Maggie Hassan, D-N.H., and co-sponsored by Sen. Josh Hawley, R-Mo., would impose new disclosure requirements on drug companies. The bill’s supporters argue that more disclosure will prevent patent abuse, promote generic competition and lead to lower drug prices.
There is little evidence the bill will meaningfully advance those goals. Worse, by adding time and expense to the business of drug development, it will deprive future patients of effective new therapies if it becomes law.
Under the bill, drugmakers 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 materials to patent officials.
The theory is that drug companies are obtaining patents by withholding information from patent officials that they disclose to FDA regulators.
This tactic, the thinking goes, enables drug firms to secure patents they don’t warrant—and thereby delays generic competitors from entering the market.
But current patent law already requires applicants to disclose information material to patentability. Deliberately misleading the USPTO can render a patent unenforceable in court.
It’s difficult to argue that the United States lacks robust generic competition. Roughly 90% of prescriptions dispensed in America are generic medicines.
The proposal, in other words, cracks down on a problem that doesn’t seem to exist. And it does so in a manner that dramatically undermines the incentives that drive medical science forward.
It takes an average of $2.7 billion over the course of a decade or more to bring a drug from the laboratory to patients. Only about one in 10 drugs that enter clinical testing ultimately wins FDA approval.
The promise of an exclusive period of sales offered by a patent is one of the few things that can make it worthwhile for companies and investors to take such outsized risks.
The Medication Affordability and Patent Integrity Act would call the enforceability of these basic intellectual property protections into doubt.
For starters, the bill would create an entirely new avenue for challenging pharmaceutical patents in court. This would hand competitors a new avenue for attacking patents unrelated to whether an invention is actually novel.
Any firm accused of infringing on an innovator’s IP could argue that the patent holder failed to satisfy the legislation’s disclosure requirements. The result would be costly litigation over paperwork and disclosure procedures rather than whether an invention actually merits patent protection.
In this way, the bill would make it more difficult and expensive for drug firms to protect legitimate innovations from theft.
All of this additional data-sharing would also expose drug firms to potentially devastating security breaches.
Much of the information surrounding experimental new therapies, particularly the information drug firms provide to the FDA, is highly sensitive—and thus incredibly valuable to competitors at home and abroad. Every additional disclosure obligation creates another repository of sensitive information and another potential point of vulnerability.
China has been working furiously to unseat the United States as the world’s leading source of medical breakthroughs. It’s already proven adept at stealing hard-won American IP to advance that mission. By one estimate, IP theft by China costs America’s economy between $225 billion and $600 billion a year.
Forcing drug firms to disclose some of their most well-guarded data to yet another government agency only increases the chances that this information will fall into the wrong hands.
If it passes, the Medication Affordability and Patent Integrity Act’s most likely effects will be a less reliable intellectual property system, an easier time for drug patent violators and a drop-off in research investment that deprives patients of future breakthroughs.
