WASHINGTON, D.C. – Today, House Budget Chairman Jodey Arrington (TX-19) led a bipartisan, bicameral group of lawmakers in introducing the Eliminating Thickets to Increase Competition (ETHIC) Act, legislation to lower prescription drug costs by addressing patent gamesmanship.
“America leads the world in medical innovation and Congress understands the necessity of strong IP protections. Groundbreaking research and development fuels our economy, improves quality of life for patients, and brings down healthcare costs – one of the drivers of our national debt. Unfortunately, loopholes in our current patent system allow manufacturers to file for duplicative patents that delay competition. I am proud to lead this legislation to ensure new patents include real innovation and bring additional value to patients,” said Rep. Arrington.
“Promoting fair competition and innovation within the pharmaceutical industry is vitally important. I am proud to join my friend and fellow Texan, Congressman Jodey Arrington, in introducing bipartisan legislation that would eliminate patent thickets. By allowing only one patent per terminally disclaimed group, we strike a balance to ensure every drug improvement receives proper protection without hindering innovation. Our goal with this bill is to lower skyrocketing drug costs to relieve unnecessary burdens on Americans while fostering a competitive and inventive healthcare landscape," said Rep. Pfluger.
“The exceptionalism of America’s patent system is to be found in its commitment to protect our greatest innovations as well as promote the inventions and innovations that change the world. But that system must also contain just as strong a commitment to fundamental fairness. This bill matters because it can deter gamesmanship in the patent system and streamline the process of determining when generic medicines can reach the market to provide the right treatment to the right patient at the right time,” said Rep. Issa.
“Creating a thicket of patents with multiple patent applications for the same idea is one tactic used by Big Pharma to block good ol’ fashioned American competition from generics. To encourage a healthy free market, this legislation ensures that when generic competitors successfully challenge one patent, the associated duplicates fall as well. This modest reform will encourage timely generic competition to drive down prices for patients and achieve savings for taxpayers. Much more is needed to combat Big Pharma’s monopoly pricing, but this bill represents a good step forward,” said Rep. Doggett.
“For far too long, Big Pharma has manipulated and abused the patent system to stifle competition and create monopolies on drugs. These practices raise prices for American families and too often put them out of reach of the patients who need them – causing sick people to ration medications or skip them altogether. I’m so proud to join my colleagues in leading this bipartisan, bicameral bill to empower generic manufacturers to cut through ‘thickets’ and promote competition in the drug manufacturing market. This will be an important step to lower costs and ensure that hardworking Americans can afford lifesaving medications,” said Rep. Jayapal.
“As the cost of delivering quality, affordable health benefits to workers and families continues to rise, ERIC appreciates the work of the bill sponsors to preserve and incentivize innovation in the life sciences sector by addressing patent thickets...employers support the careful balance between innovation and competition that Congress sought to create when passing the Hatch-Waxman Act in 1984 and the BPCIA in 2010. Practices like patent thickets can create barriers to competition, preventing employers and workers from unlocking drug savings. Congress should advance policies, like those in the bill, to help the more than 155 million Americans receiving health benefits through their employer continue to access innovative therapies while mitigating their out-of-pocket costs,” said Melissa Bartlett, Senior Vice President of Health Policy at The ERISA Industry Committee (ERIC).
“Patent thickets impose a major barrier against patients who need high-quality and affordable generic drugs. Rep. Arrington’s commonsense proposal would ensure drug manufactures cannot game our patent system to artificially raise the cost of important medications. This will help put patients back in charge of their healthcare decisions,” said Governor Bobby Jindal, Chair of the Center for a Healthy America at The America First Policy Institute.
“Patent thickets increasingly serve as a barrier to patient access to lower-cost generic and biosimilar medicines. The Arrington-Issa bill proactively addresses anticompetitive patent thickets by limiting brands to a single patent out of a duplicative patent family in Hatch-Waxman and biologics patent litigation. The bill, which aligns with the Administration’s Executive Order on competition, will accelerate generic and biosimilar launches and stop these problematic double patenting practices,” said John Murphy, President and CEO of the Association of Accessible Medicines.
"We applaud and support the bipartisan, bicameral legislation to crack down on drug companies’ patent abuse. PBMs support lower drug prices, but for far too long, drug companies have engaged in anti-competitive tactics that keep more affordable alternatives, such as generics and biosimilars, off the market so that they can extend their product monopolies to boost profits,” said J.C. Scott of the Pharmaceutical Care Management Association.
Background:
The U.S. patent system was designed to strike a balance between fostering innovation and encouraging competition. Protections around intellectual property (IP) are a cornerstone of American innovation and encourage companies to base their companies in the U.S. However, some companies have exploited this system by creating dense webs or “thickets” of patents around their most profitable drugs, blocking patients from accessing lower cost generic options.
New research shows that the thickets used by certain branded pharmaceutical companies are duplicative, and fail to make substantial improvements to the original drug. This practice delays competition and keeps drug prices high for hardworking American families.
The ETHIC Act would curb the practice of patent thicketing, bringing much-needed competition to the domestic biosimilars market and increasing access to lower cost treatments and cures.
Bill Summary:
This legislation rewards innovation by ensuring that every improvement to a drug gets the intellectual property protection it deserves.
- The bill does this by allowing a drug company to assert one patent per ‘terminally disclaimed group’ against a generic or biosimilar competitor, meaning if one patent in a family of duplicates is struck down by the courts, then all of its duplicates will also be invalidated.
- Very simply, a drug company can assert only one patent for each patentably-distinct improvement made on the drug. The more the drug is innovated, the more patents the innovator can assert against a generic or biosimilar manufacturer.
- The bill applies only to patents asserted against generic and biosimilar drug manufacturers and does not impact other industries.
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