Biotech, Pharma Industries To Target IP Protection Legislation, Patent Reform

[Note: The Senate on 26 September passed S 3325.]

By Liza Porteus Viana for Intellectual Property Watch
When the new administration and Congress come into office following the November elections in the United States, the pharmaceutical and biotechnology industries will prioritise protection of their intellectual property and innovative biological drugs as the push for cheaper, generic versions gets stronger. Patent reform also will continue to be a lobbying priority, as well as making sure intellectual property is protected in any forthcoming international trade agreements.

The drug industry and others are watching the progress of two recent Senate bills on intellectual property enforcement. In particular – S 3325, introduced by Senators Patrick Leahy, a Vermont Democrat, and Arlen Specter, a Pennsylvania Republican, and S 3464, introduced by Sens. Max Baucus, D-Montana, and Orrin Hatch, R-Utah.

S 3464, approved by the Senate Judiciary Committee on 11 September, authorises the US attorney general to enforce civil copyright laws and would enhance civil and criminal intellectual property laws. It also gives more resources to the Justice Department to combat IP theft.

S 3325 requires the US Trade Representative to spur countries that violate US intellectual property rights to take more steps to halt violations, provides more funds to USTR to work with other countries on protection and enforcement, and gives the president enforcement tools to deal with those countries that refuse to crack down on IP theft.

“A robust worldwide respect for IP is necessary to transfer new innovations and discoveries into products we can use,” Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson said in a statement in support of that bill.

But groups like Public Knowledge oppose S 3325 out of concern over non-infringing third parties and the federal government assuming a private enforcement role. The Justice and Commerce departments this week sent the Senate Judiciary Committee a letter opposing several parts of the bill.

“The government should not be turned into the law firm for wealthy copyright holders,” said Public Knowledge President Gigi Sohn.

The committee later removed provisions that would have involved federal prosecutors in civil copyright cases.

Sen. Ron Wyden, D-Ore., said those provisions would have “resulted in a massive gift of scarce federal resources to Hollywood and the recording industry.  I regret that the legislation still includes provisions that overzealous federal prosecutors could misconstrue to allow the seizure of important components of our Internet infrastructure.”

Follow-On Biologics

There is movement to give the Food and Drug Administration a quicker pathway to approve follow-on biologics (FOBs) – generic versions of complicated biologic drugs, not chemical ones, manufactured with living organisms to combat deadly diseases such as HIV/AIDS, multiple sclerosis and cancer (IPW, Public Health, 17 July 2008).

The House of Representatives Energy and Commerce Health Subcommittee has been working feverishly on the issue, but the full committee is not expected to take up any bill until next year.

“There’s very little time left and too much disagreement even in the majority party” within the House Energy and Commerce Committee on what approach to take, BIO Executive Director Jim Greenwood recently told reporters.

The main sticking point in the FOB negotiations is the data exclusivity period. Patent owners want a 14-year window before generics can sell their products, saying that is the only way to encourage innovation and to recoup their costs. Generic firms and organisations like the National Multiple Sclerosis Society want the shortest window possible.

“We’re interested in seeing biogenerics legislation that will get generic versions of important biotech drugs to the market quickly and without undue regulatory delays and without improper market restrictions,” said Robert Weissman, director of Essential Action. “We are in favor of … zero data exclusivity.”

Essential Action hopes that by framing the debate in more simple terms in the new year, it will garner the attention of more people for a more inclusive public debate.

“What we’re talking about is the price of cancer drugs … people have a lot of very personal experience and they know these things very well,” Weissman said. “I think it will lead to a lot more public engagement and we hope it will change the frame of the debate on the [Capitol] Hill, as well.”

The Federal Trade Commission has requested public comment on the FOBs proposals in Congress. The FTC will hold two workshops and roundtables this fall on the topic, and in the spring of 2009, will introduce a report analysing the potential marketplace impacts of the various policy options.

The FTC is concerned about so-called “pay-to-delay” schemes, or reverse payments, where brand-name companies essentially pay off smaller, generic firms to prevent the new, cheaper drugs from coming to market.

Advisors to the John McCain and Barack Obama presidential campaigns last week told the Generic Pharmaceutical Association (GPhA) that both candidates support FOBs and that they want to see as short a market exclusivity period as possible. Obama health policy advisor Dora Hughes said a 14-year window is “excessively long,” while McCain adviser Douglas Holtz-Eakin said McCain’s instincts are to make the window as short as possible. Obama also supports eliminating reverse payments.

Patent Reform

Greenwood said it was a “titanic struggle” to prevent “bad patent” legislation from passing this year.

Sen. Jon Kyl, R-Ariz., introduced another patent reform bill this week that differs from previous bills and alleviates some concern of critics of Leahy’s bill, S. 1145, the Patent Reform Act. It would not grant the US Patent and Trademark Office mandatory applicant quality controls, but makes the applicants’ search report and analysis voluntary. It also calls for inequitable conduct claims to be dealt with administratively, not through the courts.

“It won’t go anywhere this session but we think it will … help move the thought process into some of the directions we’ve been advocating,” said Joshua Boger, chairman of the BIO board and president of Vertex Pharmaceuticals.

The Innovation Alliance, which represents technology patent owners, praised Kyl’s bill, but said “several concerns remain.”

The bill “advances the debate on damages in a positive direction by enhancing consistent enforcement of the current law on damages and providing greater predictability for companies across all industries – but without manipulating the rules to favour infringers,” Greenwood said in a statement, also praising the post-grant review provision that allows a second window to challenge a patent.

Boger said the biotech industry has “a lot of allies going into 2009” on patent reform that it didn’t have this year.

“This is, in fact, not a discussion between one industry and another industry,” he said. “There’s some more fundamental issues here … the attracting of portraying the IP debate as one issue versus the other is precisely what we want to get out of.”

A major obstacle to overcome is the issue of penalties for infringement.

“BIO, PhRMA, the university community, a lot of the mainstream manufacturers, venture capitalists – there’s quite a big coalition on our side of people who rely on innovation to create jobs and their business models,” said PhRMA Vice President Ken Johnson.

One provision of previous bills would lower penalties for those convicted of stealing IP, and that’s where PhRMA’s “biggest problem is,” Johnson said. The group is still working with lawmakers to find a “magical formula” that doesn’t undercut innovation.

Patent Commissioner John Doll told the Generic Pharmaceutical Association (GPhA) last week that the “incredible growth” of the breadth and scope of biopharmaceutical patent claims has gotten out of hand, particularly since there are hundreds of different variations of the same biologic drug.

“I think there’s a duty … to search that application, to draft that application and view the prior art and to point out what your inventive contribution is – and it isn’t the sun and the moon and the stars,” Doll said. “And when you get over 10 to the 80th [power], there’s no way in the world an examiner can search that.”

Liza Porteus Viana may be reached at info@ip-watch.ch.