Bill restricting drug patent pacts could hurt consumers

Headlines continue to scream about the price of prescription medications skyrocketing. But here is some good news about drug costs: the price of generic medicines is falling. Fast.

In California, generic prices decreased on average 15 percent per year over the last several years.  California residents spent $24 billion less on generics than on brand prescriptions in 2018.  In 2018 alone, generic drugs saved Californians over $26 billion.

AB 824 changes the law, establishing a new burden on generic drug manufacturers that forces them into lengthy, expensive lawsuits that they risk losing.

But a measure in the California Legislature, while well-meaning, would likely end this decline and drive up prescription drug costs. Furthermore, it would delay getting some of these live-saving drugs to those who need them most. As a cancer and two-time liver transplant survivor, I can attest personally to the importance of these cost savings to patients.

Assembly Bill 824 restricts the ability of generic companies to settle patent disputes – an integral tool in lowering generic drug costs and bringing them to market quicker.

These patent settlements between drug companies increase access to lower-cost, life-saving generic medicines for patients.

Unfortunately, AB 824 changes the law, establishing a new burden on generic drug manufacturers that forces them into lengthy, expensive lawsuits that they risk losing. That means longer waits for access to less-costly generic alternatives.

The last thing we need now is legislation that will harm the ability for companies to bring new generic medications to market

Proponents maintain that the measure will prevent specific tactics that some brand-name drug companies have used to delay generic market entry beyond the date of the patent expiration. But as it stands, AB 824 casts too wide of a net, instead legislating that patent settlements, even ones that result in generic drugs coming to market earlier than the patent expiration date, are anti-competitive.

No settlement agreement should ever result in the delay of a generic medication to market.

But, as written, AB 824 is an overreach. It removes the ability for generic drug makers to enter into any mutually agreed upon settlement, thus subjecting all patent suits to a presumption standard that they are invalid, leading to costly and lengthy litigation. Prolonged litigation leads to delays in bringing cost-saving drugs to market, and, in more than half of these cases, generic medication makers lose, further delaying the opportunity for consumers to save.

The U.S. Supreme Court has said that settlements are not presumptively anti-competitive, and courts can determine the value of settlements to consumers. Meanwhile, the Federal Trade Commission has the authority to review settlements on a case-by-case basis. This, rather than a one-size-fits-all ban on all patent settlements, is the best way to protect consumer interests.

The bottom line is that patent settlements are an effective tool to prevent brand pharmaceutical companies from using delay tactics and avoid the costly and protracted litigation necessary to fight these abuses of the patent system.

The last thing we need now is legislation that will harm the ability for companies to bring new generic medications to market. Patients deserve the opportunity of access to these often life-saving medicines.

We already have a process that ensures an equitable solution to these issues between manufacturers holding patents and generic companies under federal statute that works effectively to bring medicines to market that provides greater affordability for patients and payors. Why fix something that isn’t broken?
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Editor’s Note: William “Bill” Remak is a cancer and twice liver transplant survivor from Petaluma, California. He is a national and global patient advocate for chronic diseases and medical research.