Dive Brief:
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Kyle Bass, a hedge fund manager whose Coalition for Affordable Drugs has challenged numerous drug patents, readily admits that there is a profit motive in the group's actions.
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In a filing with the U.S. Patent and Trademark Office, Bass said the concept that he is seeking to profit from the challenges is "a truthful irrelevancy" and is not the only reason for the challenges.
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The coalition has filed 18 petitions with the office to challenge patents.
Dive Insight:
Well, Bass is honest about it, and he also notes that this is perfectly legal. Further, Bass notes that the pharmaceutical companies behind the patents are also most certainly in the business of business -- to make money, sometimes a lot of it. And he also says his actions are not just about the money.
“Poor quality patents enable pharmaceutical companies to maintain artificially high drug prices and reap unjust monopoly profits paid for by consumers and taxpayers," he wrote in the patent office filing.
Bass made the comments in a response to the patent office after Celgene Corp. claimed he was abusing the patent review process. Bass has challenged Celgene's patent on Revlimid, a blood cancer drug.
Challenges like this are one reason why the drug industry is trying to get Congress to exclude drug patents from the patent review process. Hedge fund managers and other investors theoretically (and practically) could use the patent review process to profit from shorting a stock, or extract a payment from a drug company in exchange to dropping the challenge.