Senator Orrin Hatch has introduced legislation designed to
curb the use of IPRs and PGRs against pharmaceutical and biologic patents by
essentially denying the benefits to generic/biosimilar companies of the
Hatch-Waxman Act and the Biologics Price Competition and Innovation Act. Allowing the usage of IPRs against
pharmaceutical and biologic patents was a serious oversight in enacting the
America Invents Act. Senator Hatch’s
Office has released the following information concerning the new Hatch-Waxman Integrity Act of 2018 (which includes a section by section analysis):
In 2012, Congress enacted the America Invents Act to fix a
problem unrelated to drug/biologic innovation and drug/biologic affordability;
it created the inter partes review (“IPR”) and post-grant review (“PGR”)
processes to combat the growing problem of patent trolls.
Even though Congress did not intend to upset its
drug/biologic-specific Hatch-Waxman and BPCIA procedures with the enactment of
the IPR and PGR processes, generic drug and biosimilars manufacturers have
increasingly used the IPR process to circumvent the Hatch-Waxman Act and BPCIA
patent challenge processes while nonetheless taking advantage of their
abbreviated processes for drug entry.1
Moreover, hedge funds with no interest in manufacturing or marketing
drugs have filed IPR challenges against drug patents with the goal of profiting
from stock market declines triggered by the IPR filings—a type of market
manipulation.
The Hatch-Waxman Integrity Act of 2018 would close the
loophole unintentionally created by the America Invents Act. To restore the
careful balance of the Hatch-Waxman Act and the BPCIA, and to prevent the IPR
or PGR processes from undercutting them, the FD&C Act and the PHS Act would
be amended to prevent using IPR (or PGR) challenges to circumvent the specific
patent challenge processes for drugs and biologics painstakingly created by
Congress. In addition, the federal securities rules would be clarified to
indicate that filing IPR patent challenges and profiting from resulting stock
price changes is a form of prohibited market manipulation.
The Press Release is available,
here. The text of the proposed
legislation is available, here. [Hat Tip
to Professor Dennis Crouch’s Patently Obvious Blog]
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