Senate Bill Seeks to Give FTC Authority to Fight Patent Thickets, Product Hopping

The bill codifies definitions of product hopping and patent thicketing within the Federal Trade Commission (FTC) statute, allowing the FTC to challenge these practices as anticompetitive and to enable the FTC to bring antitrust suits against drug companies.
The Center for Biosimilars Staff
May 15, 2019
A bipartisan bill to give the Federal Trade Commission (FTC) the authority to bring antitrust suits against pharmaceutical companies for blocking competition through use of the US patent system was introduced in the Senate this month.

The bill, called the Affordable Prescriptions for Patients Act, was introduced by Senator John Cornyn, R-Texas, and Richard Blumenthal, D-Connecticut, a few days after the Judiciary committee, on which both lawmakers sit, held a hearing about intellectual property, patent law, and the impact on drug prices.

According to a statement from both of the senators’ offices, the act would curtail drug companies’ use of patents to protect branded prescription drugs and prevent generic and biosimilar competition from coming to market.

The bill codifies definitions of product hopping and patent thicketing within the FTC statute, allowing the FTC to challenge these practices as anticompetitive and to enable the FTC to bring antitrust suits against drug companies.

Product hopping involves making slight alterations that hold no significant therapeutic value to an existing drug and patenting the resulting product as though it were a new drug. The change is typically made right before the original version of the drug is slated to lose patent protection.

Patent thickets, such as in the case of AbbVie’s Humira, force biosimilar competitors to wage costly court fights if they want to attempt to enter the market. This week, in fact, AbbVie settled its patent litigation with Boehringer Ingelheim (BI) over adalimumab. BI had alleged that a patent thicket for Humira had hindered its ability to bring its biosimilar to market. Now, under the terms of the settlement, BI’s biosimilar, Cyltezo, will not enter the US market until July 1, 2023.

Under the proposed legislation, manufacturers will be allowed to argue  that their actions are not anticompetitive by submitting evidence to show the additional patents provide clinically meaningful and significant therapeutic or safety benefits; significantly improved product purity or potency; significant gained efficiencies in manufacturing; or other improved product attributes having substantial benefits for consumers or patients. Manufacturers can also claim that a generic or biosimilar could still make it to market without including the improvements claimed in additional patents. Manufacturers would have to submit all costs related to the original drug, including research and development, manufacturing, and marketing.

“Drug companies have taken advantage of the patent system to maintain their monopoly on certain drugs and prevent generics from coming to market,” Cornyn said. “These tactics mean Americans are forced to pay more for the life-saving medications they need. This bill puts patients first and reforms the system to encourage the availability of cheaper generics.”

“Using practices that would make the robber barons of the gilded age blush, Big Pharma has crushed competition and stifled access to cheaper generic drugs to squeeze billions out of families, businesses, and the government,” Blumenthal said. “Through common sense reforms, this bipartisan bill will empower the FTC to fight back against drug companies’ most egregious and monopolistic practices. It represents an important step in reining in Big Pharma’s greed and puts the industry on notice—enough is enough.”

The Affordable Prescriptions for Patients Act is supported by Patients for Affordable Drugs, Coalition for Affordable Prescription Drugs, Campaign for Sustainable Rx Pricing, Vizient, Prime Therapeutics, and biosimilar developer Mylan.

 

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