Many factors contribute to the price that consumers pay for prescription drugs and biologics.  These factors include research and development costs, manufacturing costs, terms negotiated by insurance plans, supply and demand, and intellectual property rights.  Intellectual property rights are often viewed as one of the most significant factors driving high drug and biologic prices. In March, a bipartisan group of six senators sponsored the Biologic Patent Transparency Act (BPTA). The BPTA is intended to “help increase patent transparency, promote biosimilar competition, bring needed biosimilar treatments to patients faster, and ultimately, lower drug prices for consumers.” The bill is intended to impose “transparency requirements that are similar to what are required for small molecule drugs under the Hatch-Waxman framework, which has proven successful in promoting the development and use of generic drugs.”

One target of the bill is “patent thickets.”  Patent thickets are described as ranging from dozens to hundreds of patents intended to block competition, and may include invalid or unenforceable patents.  AbbVie’s Humira has been criticized as a patent thicket with about 136 patents. Though the patent on Humira’s main ingredient expired in 2016, some patents directed to processes and techniques required to replicate Humira remain in force until 2034. Biosimilar competition would be blocked until 2023 when settlements will enable several companies to market biosimilars while paying AbbVie a royalty.  Since biologics are typically produced in living cells, the process often requires complex steps with more possible variations which can be patented. Johnson & Johnson’s Remicade is another biologic with more than 100 patents. The BPTA would require companies to disclose all patents that protect their biologics, which could make it easier for competitors to evaluate and develop generic versions. If a patent is not included in the list in a timely manner, no action for infringement of that patent could be brought.

The bill would also make FDA’s Purple Book a publicly available, single, searchable list which would include information on:

• Patents that claim and relate to FDA-approved biological products, for which a claim of patent infringement could reasonably be asserted by the holder, including manufacturing processes;
• Official and proprietary name of each biological product;
• The date of licensure and application number for each product;
• Information related to determinations of biosimilarity and interchangeability;
• Information related to marketing status, dosage form, route of administration, reference product, and any periods of exclusivity related to the product and the date that the exclusivity expires; and
• Approved indications.

Another goal of the bill is to limit patent enforceability of later filed patents by the biologic manufacturer when a biosimilar application has already been filed with the FDA by barring some claims of infringement for patent owners that do not timely disclose their patents. In other words, the bill is intended to discourage patent owners from filing numerous patent applications covering minor variations of the product, processes for making the product, or methods of using the product, long after the patent on the original product has issued. However, the language of the bill does not specifically reference the date that a biosimilar application has been filed.  The language in the bill regarding the restriction on claims of patent infringement only states that patents which are not timely included on the list cannot be used to bring an action for infringement. There is no specific language in the bill which would limit the enforceability of later filed patents by the biologic manufacturer when a biosimilar application has already been filed with the FDA, as long as such patents are disclosed in a timely manner.   Since the language “timely included in such list” is not limited to inclusion on the list before a biosimilar application is filed, an argument could be made that a patent which issues after a biosimilar application has been filed can still be timely disclosed.

Recently, there have been a number of legislative proposals with a goal of reducing drug and biologic product prices. While patents are the focus of the BPTA, other proposals include closing a loophole in the Food and Drug Administration’s Risk Evaluation and Mitigation Strategies (REMS) program which denied generic drug and biosimilar manufacturers access to product samples; prohibiting anticompetitive agreements between drug/biologic and generic/biosimilar manufacturers; allowing Medicare to negotiate prices with pharmaceutical companies; limiting regulatory exclusivities based on price increases; and restricting the price of prescription drugs/biologics in the U.S. based on the median price in Canada, the United Kingdom, France, Germany and Japan.  It is clear that rising drug prices are a concern, however, any public policy on drug pricing must find a balance between providing incentives to manufacturers for developing new medicines and providing affordable drug/biologic prices to consumers.