Senate takes aim at pharma's patent schemes, pay-for-delay deals in renewed drug pricing crackdown

The U.S. capitol building in washington d.c.
If passed, new legislation would give the Federal Trade Commission broader authority to initiate actions against drug companies that use patent protections to extend exclusivity. (Tupungato / GettyImages)

Earlier this month, groups lobbying for lower prescription drug prices called on Congress to enact long-awaited reforms and stressed the urgency of the movement.

Given the change of the guard in Washington, D.C. and the fresh momentum to address anti-competitive practices, the groups told Congress that it “has a unique and time-limited window for crafting meaningful drug pricing reform this year.”

Answering the call on Thursday was the Senate Judiciary Committee, which voted unanimously to advance four pieces of legislation which would help rein in the cost of prescription drugs.

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The new laws take particular aim at the tactics used by drug companies to extend patent protections and stifle competition from cheaper generic and biosimilar drugs. The legislation, which would enhance the Federal Trade Commission's ability to initiate enforcement actions against drug companies, now moves to the Senate floor for a vote.

In introducing the legislation, co-sponsor Sen. Dick Durbin (D-Ill.) took aim at the world’s best selling drug, AbbVie’s Humira. The drug has 130 patents, 90% of which were obtained after its initial approval, the senator said.

But the legislation didn't advance without debate over unintended consequences.

“I agree with the general proposition across these four bills,” said Sen. Chris Coons (Del.). “But I also am concerned that we continue to protect the patent system itself. Overly aggressive use of the tools created in this legislation could sweep up good actors as well as bad actors and could have unintended negative consequences.”   

One of the bills, The Stop STALLING Act, would give the FTC authority to take action against companies that file sham petitions with the FDA to delay market entry for generics and biosimilars. 

The Preserve Access to Affordable Generics and Biosimilars Act would limit “pay-for-delay” deals in which companies compensate generic manufacturers to delay the entrance of their products into the market. Sen. Amy Klobuchar (D-Minn.) explained that the bill would still allow companies to pursue agreements but would narrowly target “the type of settlement agreements that raise serious competitive concerns.” 

The Prescription Pricing for the People Act calls on the FTC to examine the pharmaceutical supply chain and determine whether pharmacy benefit managers—such as CVS and Express Scripts—are engaged in anti-competitive behavior. 

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The Affordable Prescriptions for Patients Act would curb drug companies’ abuse of patents through “product hopping,” where companies extend exclusivity by switching patients to a tweaked version of a drug while an older version succumbs to generics.

“What we’re essentially trying to do here is make the patent system stronger by validating new products, innovation and generics so they can come to market and reduce the costs of pharmaceutical prices,” said Sen. Richard Blumenthal (D-Conn.).  

Eliot Fishman, the director of health policy at Families USA, a consumer health care advocacy organization pushing for drug price reforms, lauded the initiative.   

"Effective prescription drug reform needs to get prices down and also to close off dysfunctional incentives that suppress innovation," said Fishman in a statement. "The Judiciary Committee took a major step to the second part of this agenda. We are optimistic that both Medicare prescription drug negotiation and reforms to patent, pay for delay and PBM abuses will become law in this Congress."