Upcoming Patent Bill Will Make Our Patent System Worse And Increase Drug Costs

September 6, 2019

 Patent abuse by companies has become an increasingly serious problem over the last couple of decades, and leads to reduced competition, fewer consumer choices, and higher prescription drug costs. This upcoming Wednesday, September 11th, the Senate Subcommittee on Intellectual Property is holding a hearing on how to strengthen America's patent system. Unfortunately one of the bills being considered, the STRONGER Patents Act of 2019, would harm our patent system by discouraging competition. Senators and Representatives should work to end patent abuse and manipulation instead of promoting it.

 

One of the main reasons that prescription drugs are so expensive is a lack of competition. Generic drugs are far more affordable for consumers, but many brand drug companies have established effective monopolies by abusing patents. A patent grants a monopoly on a prescription drug for a limited period of time, and competition is allowed afterwards. The goal is to balance promoting innovation with the public interest in competition and free markets.

 

But brand drug companies engage in two practices to game the patent system: patent thicketing (when they file many patents on a drug and every stage of its development in order to discourage generic competition and preserve their monopoly) and product hopping (when companies makes small changes to a drug in order to move their customers to another, very similar drug with a longer patent life, thus extending their market exclusivity). Consumer advocates have been drawing attention to these problems for years, and members of Congress have introduced several bills to end these abuses.

 

But other bills would make this problem worse. The STRONGER Patents Act of 2019 is one of these bills. Sponsored by Senator Chris Coons (D-DE) and Thom Tillis (R-NC), this proposal would place strict limits on the ability of the Patent Office to review and look for bad and invalid patents. Right now ordinary Americans can appeal to the Patent Office to review bad patents through inter partes review (IPR), which lets people facing infringement allegations challenge bad patents in front of administrative judges with technical expertise. This process is much cheaper and faster than trials in federal court.

 

The STRONGER Patents Act would undermine this process by setting much higher standards for invalidating patents and raising the cost of invalidating them. At a time when patent abuse is a serious and growing problem, this is the wrong approach. Consumers will pay the price - literally! Prescription drugs will be more expensive, innovation will be reduced, and there will be less competition.

 

We urge Senators Coons and Tillis to introduce legislation that reins in brand drug companies and ends their patent abuse. The STRONGER Patents Act is a big step in the wrong direction.

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