Pharma lobbies Congress for big—and expensive—changes to patent rules
- According to the Congressional Budget Office (CBO), Inter Partes Review (IPR) exemptions currently being sought by the pharmaceutical industry could cost Medicare $1.3 billion over the next decade.
- The IPR system is used as an alternative way for generic companies to challenge patents, as opposed to using the federal court system. IPR challenges are generally decided within 15 to 18 months.
- The standard way of settling patent disputes is through the procedure established under the Hatch-Waxman Act in 1984. Under this system, the FDA is required to wait 30 months, or 2.5 years, before approving generic versions of drugs that are being challenged in federal court. The general contention is that IPR is a quicker process.
On one side in this fight are major industry trade groups like the Pharmaceutical Researchers and Manufacturers of America (PhRMA) and the Biotechnology Industry Organization (BIO), as well as a slew of sympathetic legislators, including 79 members of the House of Representatives. On the other side: IPR advocates, including the health insurance industry, and the American Association of Retired Persons (AARP), who argue that having access to the IPR system helps expedite the introduction of generics.
The IPR system has been in place since 2012 and has been used by companies, such as Mylan, to challenge brand-name drug patents. At the same time, many would argue that the likes of hedge fund manager Kyle Bass have misused the system by attempting to invalidate patents and then short-selling companies' stocks.
IPR managers refused to review Mr. Bass' challenge of several of Acorda's patents in August. It is too soon to say how the IPR issue will play out, as this case is still very much in flux.