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Senate's new controversial patent reform target

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May 20, 2024
UNITED STATES - SEPTEMBER 26: Sens. Thom Tillis, R-N.C., left, and Chris Coons, D-Del., attend a Senate Judiciary Committee hearing titled "Special Counsels and the Separation of Powers," on September 26, 2017. (Photo By Tom Williams/CQ Roll Call)

Tillis and Coons at a Senate Judiciary hearing. Photo: Tom Williams/CQ Roll Call

Sens. Chris Coons and Thom Tillis are pushing a pair of bills that they say are essential to overhauling the patent process, including for drugs and genomics, but that critics contend could wind up helping the pharmaceutical industry.

Why it matters: Drug patent reform has generated bipartisan interest for the way it could boost competition and bring down prices, with the Senate Judiciary Committee already approving bipartisan measures that would prohibit "product hopping" and crack down on "patent thickets."

  • Tillis and Coons' involvement adds a new twist. Both have ties to the drug industry and were top recipients of campaign contributions from pharma interests.

What they're saying: The bills, known as the PREVAIL and PERA acts, could see committee action relatively soon, Coons and Tillis told Axios last week.

  • "We're going to get it marked up," said Tillis.
  • Coons added that he's "optimistic they'll get a markup" at a forthcoming Judiciary business meeting this summer.
  • "I don't want to create negative consequences for anybody but I want to level the playing field in a few areas," Tillis told Axios.
  • "I've got industries that I'm generally friendly with that are concerned with it and I told them, tell us how to make it better. But telling us not to do anything is unacceptable."
  • Both bills have already been discussed in recent Senate Judiciary hearings, and Judiciary Chairman Dick Durbin is a co-sponsor on the PREVAIL bill.

What's inside: Both the PREVAIL and PERA Acts would alter the patent system as a whole but have a particular impact on the life sciences and drug development, said Chris Bruno of McDermott Will and Emery, who's represented pharmaceutical companies.

  • The PREVAIL Act would raise the bar for parties to challenge patents by requiring petitioners to have standing, either by having been sued or threatened with a patent infringement lawsuit.
  • "I think it will certainly help the branded side of the pharmaceutical industry, to the extent that it does make it more efficient to and economical to defend your patent against validity challenges," said Bruno.
  • The PERA Act essentially would amend the law regarding what inventions are eligible for patent protection and make it easier for certain scientific discoveries to be patented.
  • Bruno said that could cover modified genes or discoveries "that require a lot of research and have finance and expectation behind them."

Friction point: Advocacy groups like Families USA, Patients for Affordable Drugs and Public Citizen have all spoken out against the PREVAIL Act.

  • Advocacy groups recently urged Durbin to protect the current patent system and pointed out how the PREVAIL Act could make drug prices higher, in part by making it harder to cancel invalid patents.

"Drug companies are abusing the patent system in order to maintain market exclusivity. That allows them to have high prices and continue to raise them," said Bailey Reavis, government relations manager at Families USA.

  • "We have concerns with anything that would alter the patent review process, or who can bring concerns as it relates to drug patents."
  • Families USA is supportive of some of the other patent reform bills that have passed out of Senate Judiciary previously.

The other side: "The PREVAIL Act is a positive step that would provide needed clarity to the Patent Trial and Appeal Board proceedings for patent owners across all technologies," Alex Schriver, senior vice president of public affairs at PhRMA, told Axios in a statement.

  • Schriver added that PhRMA has not taken a position on PERA yet, but that the group is "pleased to see Congress engaging on ways to ensure that the U.S. patent system continues to provide certainty to investors and innovators."

What's next: Senate Judiciary is also holding a hearing tomorrow on examining competition in the prescription drug market, which includes witnesses from PhRMA and Patients for Affordable Drugs.

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