U.S. Rep. Bill Flores (R-TX) and U.S. Sens. Orrin Hatch (R-UT) and Thom Tillis (R-NC) recently introduced a bill aimed at increasing the production of new pharmaceuticals and more equally balancing drug market competition between brand-name and generic manufacturers.
The lawmakers on Dec. 11 unveiled the Hatch-Waxman Integrity Act of 2018, H.R. 7251/S. 3738, which they said would ensure that both alternative procedures for challenging drug patents don’t create an unequal playing field and drug manufacturers are properly incentivized to develop innovative medications, according to a joint statement the members released last week.
“As the coauthor and namesake of Hatch-Waxman, I have a keen interest in ensuring we have a well-functioning generic drug industry,” said Sen. Hatch. “This means making sure that generic companies are able to develop drugs while also ensuring that brand companies have sufficient protections in place to recoup their investments.”
The bill would inhibit generic drug manufacturers from challenging the validity of brand-name manufacturers’ patents through an administrative remedy known as inter partes review (IPR). If enacted, the bill would limit generic drug manufacturers in pursuing lawsuits in court as their only option for challenging “low-quality” patents that they think have been granted to brand-name drug manufacturers, according to The Commonwealth Fund, a private philanthropy that supports independent research on health care issues and makes grants to improve health care practice and policy.
In a July 17 blog, The Commonwealth Fund explained that “low-quality patents are those where the manufacturer’s claim is not a wholly new or obvious improvement but instead a marginal or frivolous feature that does not merit patent protection.”
Brand-name manufacturers may accrue such low-quality patents around a new product — a process known as patent thicketing — to delay market entry and price competition from generic drugs, said The Commonwealth Fund.
Sen. Hatch thinks that the current IPR process upends the 1984 Hatch-Waxman Act.
“Hatch-Waxman struck a careful balance that achieved these goals and in doing so helped to create the modern generic drug industry,” the senator said last week, adding that the newly proposed bill “will help preserve that careful balance going by ensuring that newer, alternative procedures for challenging drug patents do not give one side an unintended advantage.”
The bill would require a generic drug manufacturer that wants to challenge a brand-name drug patent to choose between the Hatch-Waxman framework or the IPR, which the lawmakers described as being cheaper and faster than Hatch-Waxman litigation, but which doesn’t offer the advantages of a streamlined generic approval process. The bill would apply similarly to patents on biologics, they said.
“The Hatch-Waxman Integrity Act ensures that America remains a leader in developing life-saving and accessible therapies, cures and treatments for patients,” Rep. Flores said. “It restores an effective balance between the interests of brand-name and generic drug manufacturers so that innovation and competition will continue to flourish.”
Sen. Tillis noted that the biotechnology and life sciences industry takes on “tremendous risk and costs to develop new, life-saving drugs, with the vast majority of products never making it to the market at great expense to the manufacturer.”
“While it is important to call out bad actors who price gouge, we must allow sufficient time and balance so companies can continue to develop life-saving drugs and help people with the countless illnesses and diseases that affect millions of Americans,” said Sen.Tillis, adding that their proposed bill would “restore a proper balance in the market.”
H.R. 7251 has been referred for consideration to both the U.S. House Energy and Commerce Committee and the House Financial Services Committee, while S. 3738 has been referred to the U.S. Senate Health, Education, Labor, and Pensions Committee for review.