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Drug Patent Database Revamp Falls Short of Tackling High Costs

Jan. 8, 2021, 9:56 PM

A new law updating the FDA’s drug patent database aims to increase access to generic medications but falls short of addressing barriers to lower prices, attorneys say.

H.R.1503 requires the Food and Drug Administration to promptly remove invalidated patents from a publication identifying agency-approved drug protections. The law, dubbed the Orange Book Transparency Act, also calls on drug companies to provide more information on their products while clarifying what sorts of patents need to be listed.

Signed by President Donald Trump this week, the law was introduced to make it easier for more generic producers to enter the marketplace. But health policy watchers say the effort doesn’t tackle deep systemic problems that lead to higher drug costs.

“The main problem is that there’s just a lot of patents that get added to extend the life of the drug that we feel shouldn’t have been issued and aren’t valid,” Matthew Lane, executive director of the Coalition Against Patent Abuse, an advocacy group composed of health-care providers, consumer groups, and others.

Companies applying for FDA approval of a generic version of a name-brand drug must inform the agency they won’t infringe enforceable patents listed in the Orange Book. Often, generic companies wait to apply until the name-brand companies’ basic composition patent nears expiration.

The generic company’s drug application with the FDA triggers patent infringement suits from name-brand drugmakers if there are remaining secondary patents. The Orange Book listings help generic companies figure out when remaining patents can be challenged.

‘Incremental Step’

Lane said the legislation marks “an incremental step in the right direction,” by boosting transparency and clarifying steps for removing invalid patents from the Orange Book.

The law also requires that within two years the government provide to Congress a report on Orange Book patents for active drug ingredients in combination with a delivery device.

That too will be helpful, Lane said, as “the combination of patents has been used to hold up generic entry on some important drugs,” such as the emergency opioid drug Narcan.

But some policy watchers say the law is based on false assumptions about U.S. drug pricing.

The law “assumes that if more generics came to market, that would save us money, but we already rely more heavily on generics than just about any other rich democracy,” Alan Sager, a Boston University health law and policy professor, said.

“Having more competitive pricing for generics, even if it could be achieved, would not visibly save money,” Sager said.

Real drug pricing change would require approaches like government-regulated drug prices, policy watchers say. However, that may be open to flaws too.

“Congress doesn’t have the power to affect drug prices,” Kevin Noonan, a partner with McDonnell Boehnen Hulbert & Berghoff LLP, said.

The only thing that would give them the power to do so would be “changing the system so drastically it would likely drive prices up, because generics wouldn’t be as readily available,” he said.

For example, if the government allowed unlimited drug imports from Canada, that could significantly disrupt Canada’s own ability to access drugs, Noonan said. Canada could then either stop selling to the U.S. or ratchet up what it charged the U.S.

Still, the law may pave the way for future conversations on addressing drug prices.

“This is setting the stage for better conversations, more informed debates on the issue,” Lane said. “But I don’t think it’s going to add a huge amount of savings by itself.”

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

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com

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