Durbin, Senate Democrats Urge USPTO, Drug Companies To Address Errors In Patent Term Adjustment To Prevent Unwarranted Pharma Monopolies
Due to errors in calculating patent terms, pharmaceutical companies are able to improperly delay generic competition & continue charging monopoly prices, potentially costing consumers & taxpayers hundreds of millions of dollars in excess costs
WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, led a group of five Senate Democrats in sending a letter to the U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal regarding recent research that found pharmaceutical companies may be benefitting from errors in USPTO’s calculation of patent term adjustment (PTA). Those errors can extend the lives of drug patents held by the companies beyond the expiration dates dictated by statute. As a result, pharmaceutical companies are able to improperly delay generic competition and continue charging monopoly prices, potentially costing consumers and taxpayers hundreds of millions of dollars in excess costs. In addition to a letter to USPTO, the Senators also sent letters to three pharmaceutical companies—Biogen, Gilead, and GSK—that all received excess PTA on patents covering their medications to correct the errors and prevent ill-gotten gains. Co-signers of the letters include U.S. Senators Richard Blumenthal (D-CT), Chris Coons (D-DE), Amy Klobuchar (D-MN), and Peter Welch (D-VT).
In the letter to Director Vidal, the Senators urge USPTO to update its approach to calculating PTA and inquire about potential alternatives by October 11, 2024. Likewise, in the letters to Biogen, Gilead, and GSK, the Senators request answers to their positions and intent with the patent errors.
The Senators wrote to USPTO, “PTA allows a patent holder to extend the term of their patent to account for delays caused by the USPTO during the prosecution of the patent. In the ordinary course of business, the USPTO calculates PTA using a computer program that accesses information recorded in the Patent Application Locating and Monitoring (PALM) system. As the USPTO has recognized, ‘[t]he PALM system was not originally designed for the purpose of calculating patent term adjustment’… Whether due to shortcomings of the PALM system or the complex nature of the PTA calculation, errors in PTA are not uncommon. In recognition of these errors, USPTO regulations allow patent holders to request reconsideration of PTA. The USPTO conducts a manual determination of PTA in response to such a request.”
An article recently published in the journal Nature Biotechnology found that eight of 200 key drug patents reviewed received excess PTA. The excess PTA extended the lives of these patents by between 32 and 190 days. If the extended patent terms successfully delay generic competition, the pharmaceutical companies can rake in additional revenue of between $37.8 million and $519.6 million.
The Senators wrote to USPTO, “Surprisingly, the USPTO does not require pharmaceutical companies to disclose these errors when discovered. In fact, the USPTO’s Manual of Patent Examining Procedure (MPEP) makes disclosure of such an error entirely voluntary, stating that ‘[i]f a registered practitioner receives a patent term adjustment indicated on the front of the patent that is longer than expected, the practitioner may disclose the error to the Office.’ This contrasts with the duty of candor and good faith the USPTO imposes on patent applicants. That duty requires applicants to disclose information material to patentability during the examination process. Failure to meet that duty can result in the patent being found unenforceable.”
The letter to USPTO continued, “We urge the USPTO to update its approach to PTA, particularly in the case of patents listed in the U.S. Food & Drug Administration’s (FDA’s) Approved Drug Products with Therapeutic Equivalence Evaluations, or ‘Orange Book,’ and Lists of Licensed Biological Products with Reference Product Exclusivity and Biosimilarity or Interchangeability Evaluations, or ‘Purple Book.’ These are patents that include claims that cover, among other things, drug products and approved methods of use. Because entry of lower-cost generic drugs and biosimilars often is keyed to the expiration dates of Orange Book- and Purple Book-listed patents, any excess PTA granted to those patents ultimately costs consumers and U.S. taxpayers.”
Text of the letter to USPTO can be found here.
Text of the letter to Biogen can be found here.
Text of the letter to Gilead can be found here.
Text of the letter to GSK can be found here.
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