Washington Post Profiles Coalition’s Effort To Close Loopholes in Drug Patent Laws

In a front-page story, the Washington Post on March 25 highlights a campaign by governors and employers to lobby Congress and the Bush administration to close "costly loopholes" in federal prescription drug patent laws. Business for Affordable Medicine, a coalition of governors, employers and labor unions, has said that brand-name drug makers "abuse the system by filing frivolous appeals that take advantage of the loopholes" in the laws to "stretch out patent protection months or years longer than intended." According to a 46-state study conducted by the coalition, state Medicaid programs will spend $1.3 billion per year on 17 drugs scheduled to lose patent protection within three years. The programs would save $600 million when generic versions of the drugs reach the market. However, at least 12 brand-name drug makers have used provisions in drug patent laws to extend patents on "lucrative" drugs. Under the 1984 Hatch-Waxman Act, brand-name pharmaceutical companies can receive a 30-month patent extension from the FDA "each time a manufacturer simply claims generic approval would infringe on its patent." In addition, the law provides brand-name drug makers with three years of additional exclusive marketing rights when they find new uses for their drugs. Brand-name drug companies also can receive an additional six months of exclusive marketing rights when they test their drugs on children under the 1997 FDA Modernization Act. "What the drug companies are doing is obvious. They get to the very end of a patent, then change the color or throw in an inert ingredient and claim they need a new patent," South Dakota Gov. William Janklow (R) said.

Debate
Eighteen governors have asked HHS Secretary Tommy Thompson and FDA officials to block "unnecessary" patent extensions for brand-name prescription drugs, and the National Governors Association has urged Congress to hold hearings on the issue. Some states also have lobbied lawmakers to pass a bill, introduced by Sens. Charles Schumer (D-N.Y.) and John McCain (R-Ariz.) last year, to reform drug patent laws. In addition, a few states, such as Florida and Missouri, have established drug formularies in their Medicaid programs to help control costs. Employers, such as General Motors Co., have said that they may have to reduce benefits or salaries for employees to cover increased drug costs that result from patent extensions on brand-name treatments. "We do not have unlimited health care dollars. Spending money on a brand name when a generic drug would work just as well is not spending wisely. At the end of the day, the consumer gets hurt," Bruce Bradley, head of health policy at General Motors, said. Brand-name drug companies "argue that they are simply protecting their legitimate business concerns." They also point out that "only a fraction" of drugs on the market have become "embroiled" in patent disputes and that the drug treatments often save money for states and employers. "In many cases, these drugs are keeping patients out of hospitals and nursing homes. That is good not only from the standpoint of their quality of life but it's also saving money," Pharmaceutical Research and Manufacturers of America spokesperson Jeff Trewhitt said. In addition, drug companies have said that the share of drugs sold by generic drug makers has increased from 19% in 1984 to 47% last year as a result of the Hatch-Waxman Act, which awards six months of exclusive marketing rights to the first generic version of a drug to reach the market (Connolly, Washington Post, 3/25).