Senate, FTC cracking down on pharma patent shenanigans

Why do Americans pay so much more for common medications than people in other countries? Why does an inhaler that costs $7 in France cost almost $500 in the United States? These are just a few of the questions the Senate Judiciary Committee looked to answer in a recent hearing. The common answer? Dominant corporations use a variety of patent-related strategies to protect their power, maximize their profits, and squash their competition.

Americans are facing an affordability crisis at the hands of corporate titans. One in three people cannot afford the medications their doctors prescribe. These medications don’t have to be so expensive, but all too often pharmaceutical companies use illegal tactics to block competition that could lower prices and encourage innovation.

In one scheme recently exposed by the Federal Trade Commission, pharmaceutical companies improperly listed patents on a federal registry to gum up the works and delay generic competition, enabling them to continue charging sky-high prices for medicines people need.

Here is how it works: The Food and Drug Administration keeps a list of patents associated with approved drugs, known as the Orange Book. When a patent is listed in the Orange Book, the drug’s manufacturer can delay approval of a generic competitor for 30 months. That means the FDA isn’t allowed to approve any cheaper alternatives for 2 1/2 years.

Companies automatically get this 30-month freeze on generic competition without any analysis to determine if the listed patent was properly granted, covers the generic product, or even belongs in the Orange Book in the first place. Some companies have taken advantage of the system, overloading the list with improper, trivial patents — such as patents for dose counters, inhaler caps, or other device components, rather than drug ingredients themselves — to box out competitors and keep prices inflated.

Pharmaceutical companies have gotten away with tactics like these for far too long, boosting profits at the expense of people’s lives and pocketbooks. This cannot continue. President Biden, along with Congress and the FTC, have made it a priority to change this.

The Inflation Reduction Act, signed into law in 2022, made history by capping the price of insulin for Medicare beneficiaries at just $35 a month, an average savings of more than $300 per year for this necessary medication.

The Senate Judiciary Committee is building on that progress and holding pharmaceutical companies accountable. This Congress, the committee has advanced five bipartisan bills to lower prescription drug prices — taking on a range of practices from anticompetitive pay-for-delay agreements and sham citizen petitions to patent thickets and product hops. One of us (D.D.), who chairs the committee, has previously introduced bipartisan legislation to narrow the scope of the 30-month freeze on generic competition, to combat pharma’s gamesmanship with excessive secondary patents.

The FTC, which one of us (L.M.K.) leads, is using all of its tools to ensure that pharmaceutical companies cannot use illegal tactics to inflate the price of essential medical products like asthma inhalers. In November 2023, the FTC challenged more than 100 improper listings, leading several companies to delist their patents, paving the way for cheaper generics.

In response, three of the top four asthma inhaler manufacturers announced they will cap out-of-pocket costs for their products so that most Americans will have to pay only $35 for an inhaler. This is a major win for the millions of Americans with asthma who rely on inhalers to breathe.

But the FTC didn’t stop there. In April, it put more pharmaceutical companies on notice, challenging more than 300 additional bogus patent listings, including some for weight loss and type 2 diabetes drugs like Ozempic and Victoza. Earlier this month, a federal judge sided with the FTC and ordered a large pharmaceutical company to delist unlawful patent listings on inhalers.

Intellectual property laws should encourage innovation, not shield dominant players from competition. Challenging junk patent listings is only part of the solution. Congress is working to enact legislation to promote fair competition and lower out-of-pocket costs for essential medicines.

When your doctor prescribes a medication, your first thought should be “When can I pick this up?” not “Will I be able to afford this?” No American should pay inflated prices because of illegal business practices. Congress, the FTC, and the president will continue to protect Americans from the high cost of lifesaving drugs.

Dick Durbin is the senior United States Senator from Illinois, the Senate Majority Whip, chair of the Senate Judiciary Committee, and sits on the Appropriations and Agriculture Committees. Lina M. Khan is the chair of the U.S. Federal Trade Commission.