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Op-Ed | The American Prospect | March 29, 2024

Senators’ Latest Attempt to Enrich Big Pharma Must Not Prevail

Congressional OversightEthics in GovernmentPatent and Trademark OfficePharmaRevolving Door
Senators’ Latest Attempt to Enrich Big Pharma Must Not Prevail

Patents are meant to encourage actual innovation, not monster corporate profits.

This article originally appeared in The American Prospect

The point of America’s patent system is to encourage innovation. Hence why the Constitution authorizes Congress “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Sadly, the American patent system has drifted far from that ideal, especially in the realm of pharmaceuticals. Americans pay on average more than twice as much for prescription drugs than people in other high-income economies, while U.S.-based pharmaceutical companies are twice as profitable as companies in other sectors. The impact of high drug prices is keenly felt in Americans’ daily lives: 80 percent of adults describe drug costs as unreasonably high.

That’s why the Biden administration is pushing on multiple fronts to lower drug prices. However, the administration has run into some roadblocks in the form of the pharmaceutical industry’s loyal defenders in Congress. In the Senate, two industry stalwarts, Chris Coons (D-DE) and Thom Tillis (R-NC)—both of whom were among the biggest recipients of pharma checks in Congress during their last election cycle—are lead signatories to the Biotechnology Innovation Organization–endorsed letter opposing the National Institute of Standards and Technology’s new draft guidance framework, which outlines potential uses of march-in rights to reduce prescription drug prices.

Worse, Coons and Tillis have introduced legislation that would fuel Big Pharma’s abuse of the patent system and exacerbate the drug-pricing crisis in this country. Recently, they’ve informed their colleagues that their latest attempt to push forward the misleadingly named Patent Eligibility Restoration Act (PERA) and Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act has enough steam to make it out of committee. Enacting these bills, alone or together, would richly reward pharmaceutical companies for their donations, and encourage them to give more to support Coons and Tillis’s re-election bids in 2026.

The first of these bills, PERA, would enable companies to patent things that have been off-limits for centuries because humans did not and could not invent them—namely, products of nature, natural laws, and abstract ideas. If PERA becomes law, it would allow companies to patent isolated human genes, correlations between specific genes and health conditions, and methods of using those correlations to give patients information about their health that could be critical to improving or saving their lives.

Patenting isolated genes poses a grave threat to the health and safety of the American population. Before the Supreme Court confirmed in 2013 that existing law prohibits such patents, one company, Myriad Genetics, had patents on isolated gene sequences, which are highly correlated with breast, ovarian, and prostate cancers. Myriad used its patents to prevent other laboratories from developing or offering their own tests, even those that were more comprehensive and accurate. The day the Supreme Court issued its decision in Association for Molecular Pathology v. Myriad Genetics, Inc., everything changed. Five different laboratories announced they would provide tests for those mutations for far less than Myriad had charged. Prices quickly dropped from $4,000 to between $1,000 and $2,300 per test. By bringing patents like Myriad’s back to life, PERA would also bring back exorbitant prices for diagnostic genetic tests, including those that have been critical to the fight against COVID-19.

The second bill, PREVAIL, which is co-sponsored by Senate Judiciary Committee Chair Sen. Dick Durbin (D-IL), would enable companies to keep patents that cover things that were already known or obvious to scientists in the relevant field. Currently, patents are typically required to be original, non-obvious findings—in line with the Constitution’s language about “Progress.” Coons is also engaged with the House Judiciary Subcommittee on Intellectual Property on a separate version, which aims to impose additional restrictions on procedures for challenging these problematic patents.

The currently proposed bill would protect these wrongly granted patents by restricting access to the only mechanism the public has for challenging them outside of federal court: the Patent Trial and Appeal Board (PTAB). Congress deliberately created the PTAB to make it easier, cheaper, and more efficient to invalidate wrongly granted patents. And it has been a success: 46 percent of patents challenged at the PTAB have been found invalid in whole or part.

Naturally, Big Pharma hates this board. Gutting government capacity with the elimination of PTAB would only allow for an explosion of wrongly granted patents, which are crucial to pharma’s ability to block competition and lock in exorbitant prices for decades.

Two of the biggest supporters of these bills are former U.S. Patent and Trademark Office (USPTO) directors David Kappos and Andrei Iancu. This is no surprise. Since leaving their roles, Kappos and Iancu have committedly opposed efforts to remodel our clearly anti-competitive patent system. What’s more, the former directors advocate loudly for changing the law while remaining silent about the corporate interests they represent. After leaving the USPTO, David Kappos joined the partnership of Cravath, Swaine & Moore, which represents Amgen, Johnson & Johnson, and Novartis, among other pharma heavyweights. Iancu is now a partner at Sullivan & Cromwell, which lists AbbVie, Bayer, and Merck among its life sciences clients. He also founded the Council for Innovation Promotion as an outfit to more systematically support the entrenchment of the current anti-competitive system.

The former directors’ current roles reveal the other primary beneficiaries of the proposed bills: law firms and lawyers. Patent litigation is big business, with costs ranging from $2 to $4 million per case on average. But recently, patent litigation rates have begun to decline sharply. Given the business they stand to lose, it’s no wonder that law firm partners are pushing for changes that would ensure more patents are granted and litigated in court. Lawyers have every right to advocate for their own interests and those of their clients. But when they do, they should be transparent about it, instead of using the veneer of their former roles in the public sector to paint their positions as anything other than advocacy on behalf of their corporate clients’ interests.

The patent system exists to promote scientific innovation to benefit the public, not to enrich private interests regardless of the merits of their scientific contributions. Yet that is precisely what PERA and PREVAIL would do by granting Big Pharma even more sweeping government monopolies and associated price-gouging power. We hope the senators who have shown their willingness to stand up to Big Pharma will stand up to their colleagues’ efforts to reward their benefactors.

Congressional OversightEthics in GovernmentPatent and Trademark OfficePharmaRevolving Door

More articles by Timi Iwayemi

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