IAM recently covered the Labour Party’s radical plans to rework IP protections for life sciences companies in the UK should it win the forthcoming general election. Increasingly, it seems that next year’s Presidential election could be equally pivotal for pharma and biotech patents in the US.
Campaigning for the Democratic Party nomination is in full swing ahead of key primaries set to take place in early 2020. With lowering prescription drug prices a key focus of debate, several frontrunners have this week set out proposals that would radically increase the use and threat of compulsory patent licensing. Such policies would mark a significant shift from patents being seen as dependable rights granted according to set criteria towards the concept of IP rights as contingent exclusivities, dependent on broader political considerations.
Perhaps most notable is Elizabeth Warren’s announcement on Friday that as part of her plan to reduce the country’s unusually high healthcare costs, in the first 100 days of her administration she would use executive power to tackle pharma companies “that abuse our patent system and use every trick in the book to avoid competition”.
Warren – who currently sits in second place in national polls behind Joe Biden among Democrats – stated that she would deploy existing compulsory licensing powers to “bypass patents”, as well as utilising march-in rights under the Bayh-Dole Act to require the re-licensing of patents protecting inventions arising from government funding. She has vowed to issue compulsory licences on patents relating to Truvada, Naloxone, Harvoni and Humira, pledging also to pursue Humira producer AbbVie for alleged antitrust violations.
On the same day, other leading would-be Democratic candidates introduced the Prescription Drug Affordability and Access Act to Congress. Tabled by Senators Bernie Sanders (currently in third place in the polling) and Cory Booker (eighth), this bill seeks to create a new Bureau of Prescription Drug Affordability and Access with the mandate to issue compulsory licences on patents and other exclusivities when pharma companies refuse to set drug prices at an appropriate level. Appropriate price would be determined by a complex set of criteria, including impact on access, patient population size, therapeutic benefit, federal expenditure and international cost comparisons. Exclusivity would be lost if a notice to lower prices was not followed within 30 days. Another presidential hopeful, Kamala Harris, also sponsored the legislation.
This is not the first time in recent years that bills have been put forward in Congress to weaken life sciences IP rights. Concerns about the role of patents and patent strategies in pushing up drug prices have led to a steady stream of proposals since 2016. These include an earlier piece of legislation introduced by Bernie Sanders, the Prescription Drug Price Relief Act, which also threatened to bypass IP rights to ensure that no drug is priced higher in the US than the median cost in five other developed countries; as well as the Preserve Access to Affordable Generics and Biosimilars Act, which was introduced by another Democratic presidential hopeful Amy Klobuchar and makes reverse-payment settlements presumptively anti-competitive.
Even if Sanders makes it to the White House, his most recent legislation will of course depend on support in the House of Representatives and the Senate. Most patent reform proposals in recent years have failed to garner sufficient legislative backing, while the bipartisan Affordable Prescriptions for Patients Act, which proposes to make it an antitrust offence to engage in patent thicketing, seems to have faltered in the past couple of weeks. So, much will depend on the outcome of the 2020 Congressional election taking place alongside the presidential one.
What is more significant, then, is the realistic possibility that the Democratic Party candidate in 2020 will be standing on a platform of making unprecedented use of existing executive powers to circumvent valuable IP rights. As well as Warren, Pete Buttigieg –currently polling fourth and seen as a centrist – has also recently stated that he will empower the attorney general to invoke eminent domain power to bypass patents when “worst offender” companies refuse to negotiate lower prices. Harris too has said she will use march-in rights against the “most egregious offenders” if Congress fails to act in the first 100 days of her presidency. And, while Sanders has not explicitly said that he will use these executive powers, his stated views on this issue imply that he would strongly consider it.
But the party’s hopefuls are not all of the same mind on this point. While current frontrunner Joe Biden proposes a radical shake up of the US healthcare system, he has not supported the circumventing of patent rights. And potential new entrant Michael Bloomberg, a former Republican, seems unlikely to adopt such an approach.
All this, of course, is before the current occupant of the White House sets out any plans he might have for his second term. Reducing drug prices in the US is a popular policy and as an incumbent currently experiencing considerable political headwinds, President Trump may find it hard not to present his own strategy that also centres on changing current IP norms in one way or another.
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