The wrong prescription for drug affordability

The views expressed by contributors are their own and not the view of The Hill

This week the Senate Health, Education, Labor and Pensions Committee is scheduled to consider the Medication Affordability and Patent Integrity Act. Despite its name, the act would do nothing to actually lower prescription drug prices or improve drug patents.

Congress is considering the bill because Americans have long complained about high drug prices. Lawmakers want to be able to claim they’re doing something about the problem, especially in an election year. And “medication affordability” and “patent integrity” sound great in a campaign ad.

But a clever bill name won’t make brand-name medicines more affordable. Instead, the bill would create new regulatory burdens on biotech companies, making it harder and taking longer to develop the next generation of treatments. This legislation flies in the face of President Trump’s promise to dramatically reduce government-imposed regulatory burdens.

The legislation would require drug companies to provide additional certifications and disclosures to both the U.S. Food and Drug Administration and the U.S. Patent and Trademark Office, with the goal of ensuring that information shared with one agency is also shared with the other. But the two agencies receive somewhat different manufacturer information because they serve a different purpose. The Patent Office doesn’t need the reams of information — including clinical-trial outcomes — that the Food and Drug Administration requires.

It would also enable generic drug companies to overturn pharmaceutical patents in court by alleging that brand-name manufacturers failed to fully comply with the new requirements.

The bill’s supporters assert that pharmaceutical companies routinely exploit gaps in the patent system to unfairly delay the arrival of cheap generic competitors. But there’s little evidence of such abuse.

America already has the highest generic drug utilization rate in the world — roughly 90 percent of all prescriptions are generics or biosimilars. And while the average brand-name drug spends about 13 years on the market before cheaper generic competitors arrive, that fact hasn’t substantially changed in decades.

Yes, brand-name drug companies occasionally seek new or additional patents after a drug has been released in the marketplace. But those new patents are often the result of new, post-approval research that improves the drug or helps with patient compliance.

For example, the companies making the GLP-1 drugs — that is, the diabetic drugs now being taken to help people lose weight — all started as injectables. The companies have been working to develop the drug in pill form that will be just as effective while making it much easier for patients to maintain their medication regimen. The pills may receive new patents because new research and innovation are behind the improvements, even as some of the injectables eventually go off patent.

Put simply, research and development does not stop with the FDA’s approval. And it’s in patients’ self-interest for drug companies to continue innovating and improving already-existing drugs.

Besides, the government already has mechanisms to address rare cases of misconduct. Existing patent law imposes severe penalties on applicants who intentionally deceive patent examiners. Courts can render patents unenforceable if companies engage in fraud or material misrepresentations. Before lawmakers create an entirely new compliance regime, they need to explain why existing remedies are insufficient.

Washington often assumes that more reporting requirements, more certifications, and more regulatory oversight will result in lower prices. But when have increasing red tape and regulations ever lowered the price of anything? Indeed, the current regulatory regime is partly responsible for the high prices patients complain about.

The Patent Office already takes an average of nearly three years to reach a final decision on patent applications. Requiring examiners to sift through additional disclosures could further slow a system that is already under strain.

And as any business owner can attest, every additional disclosure obligation creates compliance costs, increases legal exposure, and adds uncertainty to an industry. Those costs inevitably influence decisions about where investment dollars flow.

That matters because pharmaceutical innovation is extraordinarily expensive and risky. Researchers frequently spend years pursuing a promising treatment — think of new drugs to slow the progression of or even cure Alzheimer’s — only to see it fail in clinical trials. Companies routinely invest hundreds of millions, and often billions, of dollars in projects that never lead to a marketable product.

If drug companies fear they could lose their patent protections on the small number products that succeed — all due to paperwork challenges — they’ll be less likely to pursue new research and development projects. And the U.S. will cede our historic role as the world’s leading drug innovator. Patients will ultimately pay the price.

Americans deserve affordable medicines. But they also deserve a health care and legal system that incentivizes companies to invest in new treatments, despite the high risk of failure. The Medication Affordability and Patent Integrity Act would only make the drug-approval process more challenging, not better.

Merrill Matthews is the Texas state chair of Our Republican Legacy.