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Drug Price War Gets Agency Buy-Ins as Senate Democrats Push Plan

July 6, 2022, 8:15 PM

Biden administration officials Wednesday committed to curbing patent practices associated with high drug costs, a move that comes as Senate Democrats push ahead with a plan to lower pharmaceutical prices.

The US Patent and Trademark Office will be on the lookout for drugmakers trying to secure intellectual property protections on “incremental, obvious changes to existing drugs” that “unjustifiably delay generic competition,” according to a blog jointly penned by leaders from the PTO and Food and Drug Administration.

President Joe Biden tasked the two agencies in an executive order last July to work together to lower drug costs.

“Our patent system must not be used to unjustifiably delay generic drugs and biosimilar competition beyond that reasonably contemplated by law,” PTO Director Kathi Vidal and FDA Commissioner Robert Califf wrote Wednesday.

Drug pricing has proved a tricky issue for the Biden administration and congressional Democrats. Senate Democrats on Wednesday submitted a drug pricing proposal—for inclusion in a sweeping economic spending package—to the parliamentarian, according to a person familiar with the matter. Submission to the parliamentarian is the first step in the process to determine whether it meets budget-related criteria.

The House-passed Build Back Better measure (H.R. 5376) was effectively scuttled by opposition from Sen. Joe Manchin (D-W.Va.), who has previously said he supports the drug pricing provisions in the package, but not other spending items in it.

The drug pricing provisions would, among other things, empower the government to directly negotiate with pharmaceutical companies on the prices of select drugs.

More Collaboration Ahead

Patents have played a notable role in government efforts to lower drug prices, with the Health and Human Services Department. targeting certain IP practices as anticompetitive. Bipartisan lawmakers likewise targeted certain drug patent practices in a round of legislation, though such efforts appear to have stalled.

Wednesday’s announcement marks a policy position from Biden’s PTO director Vidal. Agency observers deemed drug prices one of the top issues waiting for Vidal upon taking over the PTO.

Some critics, however, are skeptical of the PTO’s ability to curb drug prices, pointing to Federal Trade Commission actions and Congress as better avenues for action.

Patent examiners will get resources and more time to review applications for drug patents, according to the blog post, which will allow them to be more scrutinizing when determining whether a proposal deserves IP protections. The FDA will train examiners “on the state of the art in the pharmaceutical and biologics fields.”

The agencies have agreed to “further collaborate to develop policies aimed at protecting and promoting U.S. innovation while advancing competition that can lower drug prices for all Americans,” and are inviting the public to weigh in.

“Our intent is to ensure our government’s innovation system strikes the appropriate balance, encouraging meaningful innovation in drug development while not unduly delaying competition that provides relief from the high cost of medicines,” Vidal and Califf wrote.

—With assistance from Erik Wasson

To contact the reporter on this story: Ian Lopez in Washington at ilopez@bloomberglaw.com

To contact the editor responsible for this story: Alexis Kramer at akramer@bloomberglaw.com