Patent Docs: A Solution in Search of a Problem
Kevin Noonan discusses the Biologic Patent Transparency Act and how he thinks the U.S. Congress might be picking the wrong target (patents) as a way to decrease drug prices and increase transparency
On March 8, a bipartisan group of senators introduced S.659, entitled "The Biologic Patent Transparency Act." These senators (Collins, R-ME; Kaine, D-VA; Portman, R-OH; Shaheen, D-NH; Braun, R-IN; and Stabenow, D-MI) are ostensibly motivated by a desire to reduce prescription drug prices (according to their websites) and have focused on differences between the Biologics Price Competition and Innovation Act (BPCIA) and the Hatch Waxman Act that, in their view, reduces "transparency" over purported bases of biologic drug prices to the public's detriment. But a close look at the provisions of the bill suggest that it solves a problem that doesn't exist and instead focuses on cosmetic changes that have little chance to resolve the issues that have arisen in the implementation of the BPCIA.
The bill provides for improvements to the so-called "Purple Book," a listing of biologic drugs and their biosimilar counterparts established by the U.S. Food and Drug Administration by analogy to the Hatch-Waxman “Orange Book” but insufficiently utilized because listing is not tied to any penalty or disadvantage for failure to list. The provisions of the bill (Section 2) mandate that Biologics License Applications granted under Section 351(a) of the Public Health Service Act (codified at 42 U.S.C. § 262) or abbreviated Biologics License Applications granted under Section 351(k) of the PHSA must submit to the Secretary of Health and Human Services:
[A]ny patent for which the holder of a biological product license approved under subsection (a) or (k), or a biological product application approved under section 505 of the Federal Food, Drug, and Cosmetic Act and deemed to be a license for a biological product under this section on March 23, 2020, believes a claim of patent infringement could reasonably be asserted by the holder, or by a patent owner that has granted an exclusive license to the holder with respect to the biological product that is the subject of such license, if a person not licensed by the holder engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product that is the subject of such license.
In addition, the bill would amend 35 U.S.C. § 271 to include a penalty for non-compliance with this disclosure requirement:
(7) The owner of a patent that should have been included in the list described in section 351(o)(1) of the Public Health Service Act (42 U.S.C. 262(o)(1)), including any updates require under subparagraph (C) of that section, but was not timely included in such list, may not bring an action under this section for infringement of the patent.
The senators, in introducing this bill, seem to believe that implementation of the BPCIA has been inhibited by non-disclosure by reference product sponsors (RPS) of patents that can be asserted against biosimilar applicants to their detriment.
This sentiment ignores some important facts. First, the BPCIA already includes a provision, codified at 35 U.S.C. § 271(e)(6)(C), that seriously disincentives a reference product sponsor from failing to notify a biosimilar applicant of relevant patents:
The owner of a patent that should have been included in the list described in [paragraph 3(A), the patent disclosure of the "patent dance"], but was not timely included in such list, may not bring an action under this section for infringement of the patent with respect to the biological product [emphasis added].
Second, if any party has been disadvantaged under the BPCIA, it has been the reference product sponsor, as the result of judicial imprimatur of a strategy first employed by Sandoz to not disclose its aBLA or relevant manufacturing information to the RPS. Enactment of S.659 will not address these issues, which include judicial interpretation of a Congressional mandate ("A biosimilar applicant shall [disclose its aBLA and relevant manufacturing information]"; emphasis added) to be optional.
Another justification for these changes in the law involves the potential difficulty in a potential biosimilar applicant identifying before the fact (i.e., before a RPS competitor committed to pursuing a biosimilar) multiple patents that might be asserted against the biosimilar applicant. But these concerns fly in the face of available outlets (for example, www.drugpatentwatch.com) that has this information readily available.
On the other hand S.659 contains provisions that could increase transparency in useful ways, by establishing "a single, easily searchable, list” that includes:
(i) the official and proprietary name of each biological product licensed under subsection (a) or (k), and of each biological product application approved under section 505 of the Federal Food, Drug, and Cosmetic Act and deemed to be a license for the biological product under this section on March 23, 2020;
(ii) with respect to each biological product described in clause (i), each patent submitted in accordance with paragraph (1);
(iii) the date of licensure and application number for each such biological product;
(iv) the marketing status, dosage form, route of administration, strength, and, if applicable, reference product, for each such biological product;
(v) the licensure status for each such biological product, including whether the license at the time of listing is approved, withdrawn, or revoked;
(vi) any period of any exclusivity under subsection (k)(7)(A) or subsection (k)(7)(B) of this section or section 527 of the Federal Food, Drug, and Cosmetic Act, and any extension of such period in accordance with subsection (m) of this section with respect to each such biological product, and the date on which such exclusivity expires;
(vii) information regarding any determination related to biosimilarity or interchangeability for each such biological product; and
(viii) information regarding approved indications for each such biological product, in such manner as the Secretary determines appropriate.
Political posturing is in vogue and particularly posturing regarding prescription drug prices. But patents are not the problem; bills like this one promote that narrative but at the cost of addressing systemic issues with drug pricing that will be unaffected by any changes or diminution of patent protection that protects biologic drug innovation.
Kevin Noonan is a partner with the law firm McDonnell Boehnen Hulbert & Berghoff LLP and represents biotechnology and pharmaceutical companies on a myriad of issues. A former molecular biologist, he is also the founding author of the Patent Docs weblog, http://patentdocs.typepad.com/.