Bills are advancing in Congress that would introduce different forms of drug patent reform.
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The INSULIN Act passed the U.S. Senate Health, Education, Labor and Pensions Committee in July with a 17 to 5 vote, and is now proceeding to the full Senate for deliberation. This legislation could significantly impact individuals with private insurance by capping out-of-pocket insulin expenses at $35 monthly, a benefit already available to Medicare recipients under the Inflation Reduction Act. Moreover, the INSULIN Act proposes a pilot grant initiative to ensure uninsured individuals can access insulin affordably at the same $35 cap.
A critical component of the bill seeks to address alleged misuse of Food and Drug Administration (FDA) citizen petitions, which can obstruct the introduction of lower-cost generics and biosimilars. These petitions allow any party to request the FDA take a specific administrative action. In the pharmaceutical industry, companies may file a petition shortly before a generic or biosimilar competitor is approved, potentially delaying market entry.
Generics are drugs with the same active ingredients as their brand-name counterparts, whose patents have expired, making them therapeutically equivalent. Biosimilars, on the other hand, are akin to biologics—medicines derived from living organisms. These undergo extensive testing to gain FDA approval and must demonstrate similar clinical benefits as the original biologics.
Congress Takes Aim At Barriers To Drug Competition
A new legislative proposal aims to remove the FDA’s additional “interchangeable” designation requirement for biosimilars, a label that allows a biologic to be replaced with its biosimilar. The Biosimilar Red Tape Elimination Act seeks to eliminate the need for a separate interchangeability study for biosimilar manufacturers, aligning with European regulations where biosimilarity alone suffices.
The adoption of biosimilars in the U.S. has improved over the past decade, but many approved biosimilars face market entry delays due to legal settlements. For example, Humira’s biosimilars were unable to launch until 2023 in the U.S., despite earlier approvals, whereas they entered the European market in 2018.
Originator biologic manufacturers have effectively delayed biosimilar market entry through lengthy patent disputes, as seen with Enbrel, whose biosimilar was approved in 2016 but won’t launch in the U.S. until 2029. In contrast, Enbrel biosimilars have been available in Europe since 2016.
This highlights the issue of patent extensions in the U.S., originally intended to balance innovation with competition through temporary monopoly rights. However, some pharmaceutical companies appear to exploit these provisions to hinder competition.
Lawmakers Target Drug Patent Practices
During the latest markup of the INSULIN Act, senators from both parties voiced concerns over what they describe as the industry’s manipulation of the patent system to stifle competition and inflate prices. Sen. Cassidy (R-LA) remarked that while patents are vital for innovation, they should be time-limited, and their misuse extends monopolies, keeping drug prices unnaturally high.
Pharmaceutical advocates argue that diminishing intellectual property protections could deter investment in drug development, as patents are essential for fostering innovation and funding research.
Beyond the INSULIN Act, other legislative measures to reform drug patents are progressing through Congress. The Medication Affordability and Patent Integrity Act, a bipartisan effort, aims to enhance patent oversight and eliminate loopholes that impede competition.
In July, the HELP Committee, alongside the Senate Judiciary Committee and the House Energy and Commerce Committee, conducted hearings to examine industry practices that allegedly maintain high prices. Sen. Hawley (R-MO) criticized pharmaceutical firms for exploiting the patent system, noting that innovation is futile if medications remain unaffordable.
In a separate House hearing, Rep. Ocasio-Cortez (D-NY) highlighted a case where a company patented a redesigned inhaler cap, delaying competitor entry, as an example of competitive obstruction.
The Eliminating Thickets to Increase Competition Act, though not yet out of the Judiciary Committee, targets patent thickets. These are overlapping patents related to drug compositions and processes, which can deter market entry. Legislators propose capping the number of related patents a company can claim. The ETHIC Act and the Affordable Prescriptions for Patients Act aim to limit the patents brand-name biologic manufacturers can assert in lawsuits.
Drug Costs Draw Bipartisan Attention
Despite political divides, there is notable bipartisan agreement on addressing healthcare affordability, particularly in reducing medication costs. The expense of healthcare is a significant concern for voters, with nine out of ten indicating it could influence their decisions in the upcoming midterm elections.
This bipartisan focus on reducing high out-of-pocket expenses is reflected in the proposed legislation. While some bills aim to immediately lower costs, such as those for insulin, others seek to indirectly affect prices by addressing industry practices that delay competition.
