Senate Judiciary Committee Pushes Pharma Patents and Pricing Bills Forward

It is hard to predict whether a given bill will gain traction, but when the Senate Judiciary Committee reports out five bipartisan bills targeting pharmaceutical patents and pricing, it seems likely they are determined to get something done. During the February 9, 2023 Executive Business Meeting, the Senate Judiciary Committee reported out the “Interagency Patent Coordination and Improvement Act of 2023” (S. 79), the “Prescription Pricing for the People Act of 2023” (S. 113), the “Preserve Access to Affordable Generics and Biosimilars Act” (S.142), the “Stop STALLING Act” (S. 148), and the “Affordable Prescriptions for Patients Act of 2023” (S 150).

The Interagency Patent Coordination and Improvement Act of 2023 (S. 79)

S. 79 was sponsored by Senators Durbin, Tillis, Grassley, and Coons. It would “establish an interagency task force between the United States Patent and Trademark Office and the Food and Drug Administration for purposes of sharing information and providing technical assistance with respect to patents, and for other purposes.”

Among other things it would establish a process that requires

(A) the Director [of the USPTO] to request from the Commissioner [of the FDA] (and the Commissioner to provide to the Director, upon receiving such a request)—

(i) appropriate information for use by employees of the Office with responsibility to examine patent applications under section 131 (referred to in this section as ‘patent examiners’) regarding when certain information relating to a human drug or biological product approval, which may include updates to a label or newly approved indications, is made publicly available, including when such information is posted online; and

(ii) appropriate access for patent examiners to relevant sources of product application, approval, patent, and labeling information or communications between the Food and Drug Administration and the human drug or biological product sponsors that may not currently be subject to public disclosure, as appropriate and only to the extent necessary for the Office to carry out the responsibilities of the Office, such as ensuring accurate representations and access to information on whether the claimed invention that would be the subject of the patent was on sale before the effective filing date of the claimed invention, as described in section 102(a)(1); and

(B) the Office to assist the Food and Drug Administration in its ministerial role of listing patents.

The bill outlines protocols to be used to maintain confidentially of certain shared information, including ordering the USPTO to “maintain any information shared with the Director by the Commissioner separate from pending patent applications and establish procedures for the identification of confidential information.”

The Prescription Pricing for the People Act of 2023 (S. 113)

S. 113 was sponsored by Senators Grassley, Cantwell, Blumenthal, Blackburn, and Tillis. It would “require the Federal Trade Commission to study the role of intermediaries in the pharmaceutical supply chain and provide Congress with appropriate policy recommendations, and for other purposes.”

The Preserve Access to Affordable Generics and Biosimilars Act (S.142)

S. 142 was sponsored by Senators Klobuchar, Grassley, Durbin, Blumenthal, Booker, and Ossoff. It would “prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market, and to prohibit biological product manufacturers from compensating biosimilar and interchangeable companies to delay the entry of biosimilar biological products and interchangeable biological products.”

As reflected in the “findings” listed in Section 2, this bill targets “reverse payment” patent litigation settlement agreements which are characterized as “allow[ing] a branded company to share its monopoly profits with the generic company as a way to protect the branded company’s monopoly” and “unduly delay[ing] the marketing of low-cost generic drugs contrary to free competition, the interests of consumers, and the principles underlying antitrust law.”

The bill would amend the FTC Act to deem certain “patent claim” settlement agreements presumptively anticompetitive/illegal if:

(i) an ANDA filer or a biosimilar biological product application filer receives anything of value, including an exclusive license; and

(ii) the ANDA filer or biosimilar biological product application filer agrees to limit or forgo research, development, manufacturing, marketing, or sales of the ANDA product or biosimilar biological product, as applicable, for any period of time.

The law would provide an exception if the parties “demonstrate by clear and convincing evidence” that:

(i) the value described in subparagraph (A)(i) is compensation solely for other goods or services that the ANDA filer or biosimilar biological product application filer has promised to provide; or

(ii) the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement.

The Stop STALLING Act (S. 148)

S. 148 was sponsored by Senators Klobuchar, Grassley, Durbin, Braun, Blumenthal, Cruz, and Booker. The STALLING acronym stands for Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics Act. It would “enable the Federal Trade Commission to deter filing of sham citizen petitions to cover an attempt to interfere with approval of a competing generic drug or biosimilar, to foster competition, and facilitate the efficient review of petitions filed in good faith to raise legitimate public health concerns, and for other purposes.”

In general, S. 148 would authorize the FTC to “commence a civil action to recover a civil penalty and seek other appropriate relief in a district court of the United States against any person that submitted or caused to be submitted” a petition (e.g., a “citizens petition”) if the FTC has reason to believe it is a “sham” petition that is “objectively baseless and that attempts to use a governmental process, as opposed to the outcome of that process, to interfere with the business of a competitor,” e.g., to delay FDA approval of a competitor product.

The civil penalty could be “not more than the greater of”

(A) any revenue earned from the sale by such person of any drug product, referenced in a covered application that was the subject of a covered petition or a series of covered petitions that is a sham, during the period in which the covered petition or series of covered petitions was under review by the Secretary of Health and Human Services; or

(B) $50,000 for each calendar day that each covered petition that is a sham or that was part of a series of covered petitions that is a sham was under review by the Secretary of Health and Human Services.

The Affordable Prescriptions for Patients Act of 2023 (S. 150)

S. 150 was sponsored by Senators Cornyn, Blumenthal, Grassley, Durbin, Cruz, and Klobuchar. It would “amend the Federal Trade Commission Act to prohibit product hopping, and for other purposes.” In particular, the bill would prohibit “product hopping” which it would define as certain action taken by a “manufacturer of a reference product or listed drug” after receiving notice of an ANDA or biosimilar application referencing the manufacturer’s product.

In that regard, the bill would define and prohibit such a manufacturer from engaging in “a hard switch” (such as by requesting withdrawal of its approved application/discontinuing its product and marketing a follow-on product) and from engaging in a “soft switch” (such as by taking some other action “that unfairly disadvantage the listed drug or reference product relative to the follow-on product” “in a manner that impedes competition from a generic drug or a biosimilar biological product”).

The bill would permit justification of such actions if the manufacturer can demonstrate that:

(i) the manufacturer would have taken the actions regardless of whether a generic drug that references the listed drug or biosimilar biological product that references the reference product had already entered the market; and

(ii) (I) with respect to a hard switch under paragraph (1)(A), the manufacturer took the action for reasons relating to the safety risk to patients of the listed drug or reference product;

(II) with respect to an action described in paragraph (1)(A)(ii)(I)(aa), there is a supply disruption that (aa) is outside of the control of the manufacturer; (bb) prevents the production or distribution of the applicable listed drug or reference product; and (cc) cannot be remedied by reasonable efforts; or

(III) with respect to a soft switch under paragraph (1)(B), the manufacturer had legitimate pro-competitive reasons, apart from the financial effects of reduced competition, to take the action.

S79 and The Duty of Disclosure

Of these bills, S. 79 would have the most direct impact on the process for obtaining U.S. pharmaceutical patents. While the bill calls for direct communication between FDA and the USPTO, at present, the USPTO relies on applicants to comply with the Duty of Disclosure and submit relevant information from their own interactions with FDA.

As discussed in this article, the USPTO issued a Federal Register Notice on July 29, 2022, discussing how the duty of candor and good faith in dealing with the USPTO applies to “information and statements material to patentability … received from or submitted to the FDA and other governmental agencies.” For example, the Notice stated that “Each individual with a duty to disclose, or party with a duty of reasonable inquiry, should ensure that the statements made to the USPTO and other Government agencies, or any statements made on their behalf to other Government agencies regarding the claimed subject matter, are consistent.”

On February 23, 2023, the USPTO is hosting a “virtual panel discussion” on this topic. Find out more and register here.