CCAGW Urges Opposition to S. 1416 | Council For Citizens Against Government Waste

CCAGW Urges Opposition to S. 1416

June 11, 2019

U.S. Senate
Washington, D.C. 20510

Dear Senator,

On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you not to co-sponsor or support S. 1416, the “Affordable Prescriptions for Patients Act." While the title and supposed intent of this legislation may seem attractive, its enactment would be devastating to patients and costly to taxpayers.

S. 1416 would amend the Federal Trade Commission (FTC) Act to give the agency unprecedented authority to find anti-competitive liability merely for having patent applications granted by the Patent and Trade Office (PTO). This liability would not be based on science, but on whether a non-patent-trained administrative law judge decides that the patent qualifies as “product hopping” or “patent thickening” regardless of how beneficial the innovation may be. The legislation applies only to pharmaceutical patents, but that does not stop it from being extended to other research-intensive industries that constantly improve their inventions, like telecommunications and technology.

Simply having more patents does not equal higher prices, and the pharmaceutical industry does not even hold the most patents. A January 12, 2018 USA Today article listed the 50 most innovative companies and found that in 2017, International Business Machines was granted 9,043 patents; Samsung was granted 8,894 patents, and Canon was granted 3,285 patents. Fifty companies, including Apple, Google, Microsoft and Amazon, accounted for about 30 percent of patents. There were no pharmaceutical companies on the list. An April 18, 2018 National Golf Foundation article noted that Acushnet, which owns Titleist, has “46 patents for both the 2017 Pro VI and new AVX, and 68 for the Pro V1x” golf balls. In other words, every company that relies on intellectual property (IP) rights for its products constantly improves them, knowing that they can try to recoup their research and development costs during the time their patents are protected.

Patent thicket and product hopping as used in S. 1416 seem to predetermine that any new formulation of a drug, including whether administration changes from a needle to a patch, or from two doses to one dose per day, or treats a different disease, is per se anticompetitive. Even discontinuing an older version of a drug could be considered anticompetitive.

At a March 13, 2019 Senate Judiciary Subcommittee on Intellectual Property hearing, Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office Andrei Iancu stated, “Our overall goal is to ensure that rights owners and the public alike have confidence in, and can rely on, a predictable and well-functioning IP system. This confidence spurs inventors to invent, investors to invest, companies to grow and create new jobs, and science and technology to advance.” The FTC’s new powers under S. 1416 could hinder the decision-making of PTO examiners for everything from pharmaceuticals to golf balls.

There are already legal avenues to challenge possible antitrust behavior by any pharmaceutical company. It is completely unnecessary to grant unwarranted and unnecessary power to the FTC, particularly when it could stifle innovation. CCAGW urges you to not co-sponsor or support this legislation. All votes on S. 1416 will be among those considered for CCAGW’s 2019 Congressional Ratings.

Sincerely,

Tom Schatz
President, CCAGW

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