Bills are advancing in Congress that would introduce different forms of drug patent reform.
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The INSULIN Act successfully passed out of the United States Senate Health, Education, Labor and Pensions Committee in July, by a vote of 17 to 5 and now heads to the full Senate floor for consideration. It’s a bill with potentially significant impact, as it would limit out-of-pocket insulin costs to $35 a month for people with private insurance. This is a cap that Medicare beneficiaries already have through an Inflation Reduction Act provision. The INSULIN Act would also establish a pilot grant program helping uninsured patients access affordable insulin at the $35 maximum.
Importantly, the bill also includes provisions to curb alleged abuses of Food and Drug Administration citizen petitions that can delay lower-cost generic and biosimilar market entry. Such petitions allow any individual or organization to request that the agency take, change, or refrain from implementing a specific administrative action. In the case of branded pharmaceuticals, shortly before a generic or biosimilar competitor is set to get FDA licensing, the manufacturer may file a citizen petition that raises concerns about the pending market entrant.
As a reminder, generics are medications that contain the same active pharmaceutical ingredients as brand-name drugs whose patents have expired. As bioequivalent entities, they’re considered therapeutically interchangeable with their branded counterparts. Biosimilars are similar to medicines made from living organisms called biologics. Like biologics, biosimilars go through rigorous testing before receiving FDA marketing authorization. They’re made from the same types of organic material and offer the same clinical benefits as their referenced originators.
Congress Takes Aim At Barriers To Drug Competition
Lawmakers have introduced a bill that would eliminate the redundant FDA “interchangeable” designation for biosimilars. Here, interchangeable refers to an originator biologic being able to be swapped out for its referenced biosimilar(s). The Biosimilar Red Tape Elimination Act would get rid of the need for manufacturers of biosimilars to complete a separate study to determine interchangeability. This is a requirement that other regulatory agencies such as the European Medicines Agency do not impose. They’re satisfied so long as biosimilarity is proven.
The U.S. record in terms of uptake of biosimilars is better than it was, say, five to 10 years ago. But there are many instances in which approved biosimilars have had to wait to enter the market until agreed dates included in litigation settlements. The blockbuster biologic Humira (adalimumab) is one such example, as its referenced approved biosimilars couldn’t launch until 2023, more than six years after their regulatory approval. Meanwhile, in Europe Humira-referenced biosimilars entered the market as early as 2018.
Manufacturers of originator biologics have been adept at erecting barriers to entry. These lead to sometimes exceedingly long delays in biosimilar entry into the market as protracted patent disputes play out. For instance, even though the FDA approved the first Enbrel (etanercept) referenced biosimilar in 2016, it will have to wait until 2029 before launching in the U.S. In Europe, Enbrel-referenced biosimilars entered the market in 2016.
These examples illustrate a potential problem in the U.S. with respect to patent extensions. The Hatch-Waxman Act of 1984 and the Biologics Price Competition and Innovation Act of 2009 were designed to achieve a compromise of sorts between innovation and competition. Legislators established temporary monopoly rights in an effort to balance the competing objectives of incentivizing innovation and spurring competition.
However, pharmaceutical firms have at times actively sought to block competition, with an array of tools that appear to violate the compromise.
Lawmakers Target Drug Patent Practices
During the INSULIN Act’s latest markup, senators from both political parties expressed concerns about the industry’s purported “gaming” of the system by blocking competition. They say that this drives prices up. For example, Sen. Cassidy (R-LA) stated that “patents are critical to innovation and driving investments in new therapies for patients, but they are and should be time-limited, and abuses can unfairly extend brand monopolies and keep drug prices higher than they should be.”
Pharmaceutical industry advocates counter by saying that weakening intellectual property rights could harm investment in drug development. In this respect, patents are said to be the lifeblood of innovation. Without them, there wouldn’t be the investment in research and development needed to innovate.
Besides the INSULIN Act, other bills that would introduce drug patent reforms are advancing in Congress and moving out of the HELP Committee. These include a bipartisan proposal called The Medication Affordability and Patent Integrity Act. It would strengthen oversight of the patent system and close loopholes that delay competition.
In addition to the HELP Committee, the Senate Judiciary Committee and the House Energy and Commerce Committee each held hearings in July, with lawmakers highlighting industry practices which they allege keep prices high. And Sen. Hawley (R-MO) criticized pharmaceutical companies for gaming the patent system, stating that innovation “doesn’t do much good” if people can’t afford the medications.
Separately, in a House hearing, Rep. Ocasio-Cortez (D-NY) pointed to what she considers an egregious example of the use of ways to impede competition, highlighting how a manufacturer patented a redesigned inhaler cap that resulted in delaying competitor market entrants.
And though it hasn’t yet moved out of the Judiciary Committee, the Eliminating Thickets to Increase Competition Act is specifically targeting patent thickets. Drug manufacturers can construct overlapping patents that pertain to a pharmaceutical’s composition, manufacturing processes, formulations and indications. These can be used to thwart competitors from entering the market. Legislators want to cap the number of related patents a pharmaceutical company can claim. The ETHIC Act and a separate bill called the Affordable Prescriptions for Patients Act would limit the number of patents brand-name biologic manufacturers can assert in infringement lawsuits.
Drug Costs Draw Bipartisan Attention
Despite a heavily polarized political climate, there’s a surprising amount of bipartisanship on certain healthcare issues, particularly ones related to affordability of medicines for patients. A large majority of voters consider healthcare costs an important item that could factor in their vote in this fall’s midterm elections. Specifically, nine in 10 voters say the costs of healthcare, including prescription drugs, will influence their vote.
And so, it makes sense that this has become an issue in which lawmakers on both sides of the aisle appeal to constituents that they want to do something about high out-of-pocket expenses.
Bills being introduced in Congress could have an immediate impact by directly lowering patient out-of-pocket costs for certain items like insulin. Other proposals may indirectly impact costs by curbing drug industry tactics that delay competition.