Pharma Patent Practices Come Under Scrutiny From Congress, FDA, PTO

As Congress again proposes drug pricing efforts, many of its members, as well as a couple of government agencies, have pharma manufacturers in their crosshairs for a somewhat related reason: their patent processes. The FDA and the U.S. Patent and Trademark Office (USPTO) recently said they would be working together to scrutinize certain practices that could potentially lead to delays in competition from biosimilars and generics.

The move follows President Biden’s July 9, 2021, Executive Order on Promoting Competition in the American Economy in which he called for “a fair, open, and competitive marketplace” across numerous industries. “Too often, patent and other laws have been misused to inhibit or delay — for years and even decades — competition from generic drugs and biosimilars, denying Americans access to lower-cost drugs.”

The order specifically called on the FDA and USPTO to work toward these goals.

Among other actions, it instructed the FDA commissioner to write a letter to the USPTO “describing any relevant concerns of the FDA.” Following that, then-acting FDA Commissioner Janet Woodcock, M.D., sent a letter to the PTO on Sept. 10, 2021. She noted that “the Agency recognizes that patents are critical to fostering innovation, including innovation in the pharmaceutical industry. Nonetheless, the impact of certain pharmaceutical company patenting practices on the pharmaceutical marketplace has attracted attention within the debate over drug pricing.…We believe that rewarding innovation should not improperly forestall access to lower cost medicines. We fully acknowledge that the regulatory structure surrounding drugs is complex, and not all of the gaming of the system is related to patents or their issuance. Certain uses of the patent system, however, have been criticized as allowing companies to inappropriately impede competition from generic, biosimilar and interchangeable biological products.”

She described “several areas of concern,” including patent thickets — i.e., numerous patents on differing aspects of a product within a patent application — product hopping — which is when a company submits a new application for a modified product, such as a different dosing regimen, obtains a patent and then switches the market to the new drug right before facing biosimilar or generic competition — and evergreening, or patenting additional changes such as a new formulation or new delivery system to a previously approved drug, patents that are often sought as older patents are expiring. Woodcock cited a study that found that of the drugs receiving new patents as listed in the Orange Book from 2005 to 2015, 78% of them were not new agents but rather ones already on the market.

The FDA, Woodcock explained, was “actively evaluating” the impact of those practices on the entry of generics and biosimilars, and she invited the USPTO “to collaboratively engage with us in these efforts and in any complementary activities under your purview that can advance competition and access in the marketplace.” Again noting “the goal of increasing competition and access to affordable drugs while respecting the need to preserve patent rights and incentives for innovation generally,” she included some suggestions for topics that the agencies could discuss; among them was “possible misuse of the patent system,” including practices “being used in ways that unduly extend market monopolies and keep drug prices high without any meaningful benefits for patients.”

On June 6, Kathi Vidal, under secretary of commerce for intellectual property and director of the USPTO, responded to Robert M. Califf, M.D., FDA commissioner, acknowledging patents’ “critical role” in incentivizing companies to bring drugs to market while agreeing that biosimilars and generics must not be “unnecessarily delay[ed]” from launching. She said she “could not be more excited” to work with the FDA on the effort and included a list of initiatives that the USPTO could take up, as well as what the two agencies could do collaboratively, such as examining consistency in presentations made to the agencies by patent applicants. Vidal also said she was open to discussions with FDA and other agencies about the FDA’s concerns about patent thickets, evergreening and product hopping.

Also on June 6, Vidal and Califf published a joint blog. They noted “the important contributions and lifesaving treatments developed by the pharmaceutical industry,” which are “made possible in part through our patent laws.” Those laws incentivize both manufacturers that bring original drugs to market and also those that develop generics and biosimilars, they wrote. However, while patents to incentivize these companies are “critical,” the system “must not be used to unjustifiably delay generic drugs and biosimilar competition beyond that reasonably contemplated by law.”

Through the initiatives that the agencies described in their letters, the USPTO “will protect against the patenting of incremental, obvious changes to existing drugs that do not qualify for patents. This effort can lead to lower drug prices because drug companies will not be able to unjustifiably delay generic competition based on trivial changes to a drug product.” Both agencies, they wrote, will help ensure that patent examiners have the resources and knowledge they need, as well as develop policies that will protect and incentivize innovation while promoting competition. They also disclosed that the agencies will have public outreach events and listening sessions to help with this process.

Multiple members of Congress have recently urged action on potential patent misuse. On May 25, Sens. Bill Cassidy, M.D. (R-La.), and Maggie Hassan (D-N.H.) sent a letter to Vidal and Califf maintaining that a “lack of coordination” between the USPTO and FDA “has allowed the pharmaceutical industry to obtain patents of questionable validity” and specifically mentioned patent thickets. The senators called for better communication between the agencies and requested responses by June 24 to a series of questions about the USPTO’s use of FDA information when it is reviewing patent applications from pharma companies.

Then on June 8, Sens. Patrick Leahy (D-Vt.), John Cornyn (R-Texas), Richard Blumenthal (D-Conn.), Susan Collins (R-Maine), Amy Klobuchar (D-Minn.) and Mike Braun (R-Ind.) sent a letter to Vidal about patent thickets, noting that they can delay biosimilar and generic competition for years or even decades. “The Patent Act envisions a single patent per invention, not a large portfolio based on one creation,” they wrote. “But continuations now account for almost a quarter of all patent filings. We are concerned this could mean the USPTO is granting multiple patents for one invention, in contravention of the statutory text.”

They asked for Vidal to consider regulation and practice changes to address the issue, in particular changing how the USPTO examines patent applications. “While we still need consistent avenues to address poor-quality patents after issuance, this is an opportunity to take prompt action at the preissuance stage,” they wrote. In addition, they asked a series of questions and requested that the USPTO issue a notice of proposed rulemaking or a public request for comments by Sept. 1.

While not cited in the letter, AbbVie Inc.’s Humira (adalimumab) is perhaps the best-known example of a patent thicket. The company has filed almost 250 patent applications for the top-selling drug in the world, with 89% of them filed after the drug was on the market. The drug was first approved at the end of 2002 and launched in 2003. Although the FDA has approved seven biosimilars of Humira as of AIS Health press time — the first back in September 2016 — not one has launched in the U.S. due to patent litigation with AbbVie. The reference drug manufacturer has settled with the approved biosimilar companies, as well as others with pending FDA approvals, and in 2023 will finally face competition in the U.S. as early as Jan. 31.

One study estimated that “this extended monopoly” will cost U.S. payers and taxpayers more than $14.4 billion. “AbbVie’s pricing practices are protected by an aggressive evergreening patent strategy to extend the life cycle of Humira in order to deliberately delay competition,” it states. “The overpatenting of Humira and other medicines puts a strain not only [on] America’s public health care budgets, but also undermines the health and financial well-being of individuals and families throughout the country.”

Finally, on June 17, Sens. Dick Durbin (D-Ill.), Thom Tillis (R-N.C.), and Chuck Grassley (R-Iowa) introduced the Interagency Patent Coordination and Improvement Act of 2022 (S. 4430) to establish an interagency task force between the USPTO and FDA with the goal of sharing information and providing assistance for patent reviews, among other purposes. It also would require that within four years of the legislation’s enactment, the USPTO would submit a report on how often the FDA provided information via the task force, the most useful methods for providing that information, any recommended changes to the “mandate, funding, or operations” of the task force and a list of other agencies that the USPTO could coordinate with in a similar fashion. The bill has been referred to the Senate Judiciary Committee.

“Establishing clear avenues for collaboration between USPTO and FDA is essential for both agencies to operate smoothly and do their job effectively,” said Durbin in a statement. “By incentivizing coordination, we can empower patent examiners and in turn boost competition, including for prescription drugs.…By improving coordination between the USPTO and FDA, Congress can ensure that patent examiners have access to all of the relevant information that they need to help them make a sound determination regarding patentability. This bill is a simple good-government measure that will protect the strength of the patent system, improve patent quality, and cut down on unnecessary bureaucracy between these two agencies.”

This story was reprinted from AIS Health’s monthly publication RADAR on Specialty Pharmacy.

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