THEY SAID IT!: LAWMAKERS ROAST BIG PHARMA’S PATENT ABUSE, CALL FOR ACTION ON BIPARTISAN SOLUTIONS TO HOLD THE PHARMACEUTICAL INDUSTRY ACCOUNTABLE

Senate Judiciary Committee Puts Spotlight on Big Pharma’s Anti-Competitive Tactics that Extend Monopolies and Keep Drug Prices High

On Tuesday, the U.S. Senate Committee on the Judiciary held a hearing titled “Ensuring Affordable & Accessible Medications: Examining Competition in the Prescription Drug Market.”

During the hearing, lawmakers from both sides of the aisle highlighted the impact of Big Pharma’s egregious abuse of the patent system, and called on Congress to pass bipartisan, market-based solutions to crack down on Big Pharma’s anti-competitive tactics, previously advanced by the committee.

Here is what lawmakers had to say in opening statements and key exchanges during the hearing:

 

Chairman Dick Durbin (D-IL), U.S. Senate Committee on the Judiciary: 

“Too often the prices charged by Big Pharma do not reflect a scientific advancement; rather, they’re the result of skilled lawyers manipulating the patent system and skirting our nation’s competition laws. Take the blockbuster drug Humira, which AbbVie introduced in 2002. For more than 20 years, the company exploited international property laws to build a thicket of 165 patents that allowed Humira to avoid competition. The result, $20.7 billion in revenue to AbbVie in 2021 alone and over $200 billion in revenue over Humira’s 20-plus years of exclusivity.”

“You know what’s going on even if you have a beginner course in this business. The patent system is being manipulated and used by the attorneys to extend the patents’ life to avoid competition, generics and bringing down the cost.”

“The committee is taking leadership in addressing Big Pharma’s abuses. Last year, we unanimously reported five bipartisan bills that address issues ranging from anti-competitive pay for delay agreements and sham citizen petitions, to patent thickets and product hopping.”

 

Ranking Member Lindsay Graham (R-SC), U.S. Senate Committee on the Judiciary:

 “Count me in for challenging the patent system. Count me for trying to find ways to help the American consumer versus people in other countries. I am very open minded about stopping abuse.”

“The idea of playing games with patents needs to stop.”

During an exchange with Dr. William Feldman, MD, DPhil, MPH, Associate Physician, Division of Pulmonary and Critical Care Medicine, Brigham and Women’s Hospital, Senator Graham highlighted the blatant abuse of the U.S. patent system by pharmaceutical companies.

Senator Graham (R-SC): “Dr. Feldman, do you believe there’s gaming of the patent system by pharmaceutical companies?”

William Feldman, MD, DPhil, MPH: “I think there’s no question… I don’t think it’s sort of finding a needle in a haystack, everywhere we look, every study we do, we find gaming. We look at drug device combinations, I talked about inhalers, we see the same thing on GLP-1 receptor agonists like Ozempic, Wegovy.”

Senator Graham (R-SC): “See, I’m with you on this… the problem is real in terms of patent abuse.”

 

U.S. Senator Sheldon Whitehouse (D-RI):

Senator Whitehouse (D-RI): “Mr. Mitchell, what do you think are the sort of red flags that we should be looking at where anti-competitive use of the patent system is signaled as opposed to pro-innovation use of the patent system?”

David Mitchell, President and Founder, Patients for Affordable Drugs: “Well, any time you have a drug like Humira that, as the chairman pointed out in his opening remarks, had 165 patents on it and I remember the day Senator Cornyn spoke to the chairman of Humira in a hearing and couldn’t get a straight answer from him on how many patents there were on Humira. Those patents which began to expire in Europe in 2018 led to prices in Europe that were 15 percent of the prices that we paid in this country until Humira competition finally hit the market last year. So, look for the number of patents, look at what’s happening abroad. Did they give away a little bit of the market in Europe in order to protect their market here from competitors? There are signs to look for.”

 

U.S. Senator Chuck Grassley (R-IA):

Senator Grassley (R-IA): “So, I have this question about some bills that we’ve already passed out of this committee that I think lead to anti-competitive practices in prescription drugs as well as the availability of lower price generic alternatives. We focus on pay for delay deals, citizen petition abuse, product hopping and evergreening and unfair PBM practices and so these bills kind of come out with these names in this committee. Prescription Pricing for the People Act, The Preserve Access to Affordable Generics and Biosimilar Act, Stop Stalling Act, The Affordable Prescriptions for Patients Act and the Interagency Patent Coordination Improvement Act. It’s frustrating that these bills [have not moved] and become law, why they have not, I don’t know. I hope that we can break the logjam.”

“And Mr. Mitchell, you made that very clear. I was going to ask you as one of three people here, so I’m going to focus on Professor Rai and Dr. Feldman. Do you believe that these bills that I’ve mentioned will help promote competition and lower drug costs?”

Arti Rai, Elvin R. Latty Distinguished Professor of Law, Duke Law: “Thank you for the question. Yes, I do believe that they will.”

William Feldman, MD, DPhil, MPH: “I agree, I think every bill that we are talking about here today, all of these bipartisan bills, would help address the problem. To me, there is no silver bullet. I wish there was one solution that could solve all of our problems, but I really think the work this committee is doing around all of these issues, around better communication with the USPTO and FDA, or on citizen petitions, pay for delay settlement, we really have to be going after every single issue to make incremental progress on what I think is a real problem for our health care system.”

 

U.S. Senator Peter Welch (D-VT):

Senator Welch (D-VT): “Do you know how much the top 15 biggest drug companies reported in revenue in the first quarter of 2024? $173 billion. Does that sound about right?”

Jocelyn Ulrich, Vice President, Policy & Research, PhRMA: “I’m sorry, I don’t have that figure in front of me.”

Senator Welch (D-VT): “Well, it’s $173 billion. And of that, about 14 percent – $25 billion – was spent on research. By the way, that isn’t specified as to whether it’s for a new molecule or a combination of an active ingredients or marketing. Novo brought in $9.5 billion in the first quarter and spent only $1.2 billion on R&D. Do you know how much Novo spent on shareholder dividends and buybacks? $4.5 billion. So, there is a question here with the advertising expenditures with the shareholder buybacks and the dividends. Is there room for companies to consider maybe giving the consumers and the taxpayers a fairer price?”

 

Ranking Member Lindsay Graham (R-SC), U.S. Senate Committee on the Judiciary:

During a subsequent exchange with Senator Graham, Jocelyn Ulrich, Vice President, Policy & Research for PhRMA refused to take responsibility for the pharmaceutical industry’s egregious abuse of the patent system that costs patients and taxpayers billions of dollars each year, saying of the current system that enables Big Pharma to put profits over patients, “I think it’s working.”

Senator Graham (R-SC): “Do you agree there’s patent abuse in your industry?”

Jocelyn Ulrich, Vice President, Policy & Research, PhRMA: “PhRMA is not in support of anti-competitive behaviors.”

Senator Graham (R-SC): “Well, that’s not the question. Do you believe there’s abuse in your industry?”

Ulrich: “Well, I believe there are controls in place, to handle that when there is.”

Senator Graham (R-SC): “So you don’t think there’s a problem?”

Ulrich: “I think that the courts and FTC has immediate authority to deal with that.”

Senator Graham (R-SC): “Wait a minute, you don’t think there’s a problem with pharmaceutical companies playing games with patents to keep generics out of the market?”

Ulrich: “I think that the system has the correct checks and balances in place to deal with.”

Senator Graham (R-SC): “So you think it’s working?”

Ulrich: “I think it’s working.”

Senator Graham (R-SC) “Yeah, well I don’t.”

 

U.S. Senator Jon Ossoff (D-GA):

Senator Jon Ossoff (D-GA): “In the last few decades, have the active ingredients in these devices [inhalers] substantially changed?”

William Feldman, MD, DPhil, MPH: “No, since 1986 there have been no inhalers for asthma or COPD with a new mechanism of action. That means of the dozens upon dozens of brand name inhalers that have been approved, not a single one has an active ingredient that is fundamentally different from other active ingredients in the same class.”

Senator Jon Ossoff (D-GA): “For three and a half decades, you’re saying the active ingredients have been basically the same?”

William Feldman, MD, DPhil, MPH: “That’s right. Some tweaks to the molecules where you get new active ingredients in the same class. And so fundamentally, no major breakthroughs in terms of managing these diseases from inhalers.”

Senator Jon Ossoff (D-GA): “So why are so many Georgians and so many Americans still paying hundreds of dollars for these devices?”

William Feldman, MD, DPhil, MPH: “I think it comes back to really what we’re focused on in this hearing today, which is these problematic patenting practices, product hops, where companies are taking decades old active ingredients, getting patent protection for the delivery devices for other aspects of the products, and it allows them to keep prices high by limiting generic competition.”

 

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Read CSRxP’s on the record testimony for the Senate Judiciary hearing HERE.

Read more on how Big Pharma’s patent abuse tactics drive increased costs for consumers and the U.S. health care system HERE.

Learn more about market-based solutions to hold Big Pharma accountable and lower drug prices HERE.

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