Republican Lawmakers Introduce Bill to Limit IPRs by Generic and Biosimilar Developers

Last week, Republicans in the House of Representatives and in the Senate introduced legislation that would restrict generic and biosimilar developers from challenging patents on reference drugs using the inter partes review (IPR) process.

The bill, titled the Hatch-Waxman Integrity Act of 2018, was originally proposed by Senator Orrin Hatch, R-Utah, as an amendment to the Creating and Restoring Equal Access to Equivalent Samples Act (CREATES Act) in June of 2018. In its form introduced this month by Hatch, Representative Bill Flores, R-Texas, and Senator Thom Tillis, R-North Carolina, the proposed legislation would amend the Food, Drug, and Cosmetics Act and the Securities Exchange Act to restrict generic or biosimilar developers from availing themselves of both the IPR and/or post-grant review (PGR) process and litigation pathways provided for under the Hatch-Waxman Act for generics or the Biologics Price Competition and Innovation Act for biosimilars.

According to a summary of the bill provided by Hatch, Congress never intended for the IPR process to “upset” standard litigation procedures, and the new legislation would “close the loophole” created by the IPR process.

The name of Hatch’s new legislation references The Drug Price Competition and Patent Term Restoration Act of 1984, referred to colloquially as “Hatch-Waxman” after Hatch and former Representative Henry Waxman, D-California, who were cosponsors of the 1984 legislation that created the foundation for the US generics market. However, Waxman has been vocal in his criticism of the new bill.

Writing with coauthors Bill Corr and Kristi Martin in The Commonwealth Fund after Hatch first unveiled his plan as an amendment to the CREATES Act, Waxman said that Hatch’s proposal would “delay the ability to challenge and resolve invalid patents for brand-name drugs and thereby also delay development of lower-priced generics.”

Waxman and his coauthors went on to write that “The IPR process is one of several key policy mechanisms for encouraging competition and reducing prices in the pharmaceutical markets. Efforts to undermine this process—such as the proposed Hatch amendment—will likely undermine current efforts to ease the burden of high drug costs on American consumers by allowing brand-name manufacturers to extend monopoly pricing.”

Many in the pharmaceutical industry, however, have met the proposed legislation with support. James C. Greenwood, chief executive officer of the Biotechnology Innovation Organization, said in a statement that the IPR process, which he termed “unforeseen gamesmanship,” has undermined the law’s balance of the need for generics with the need to defend innovation.

“The majority of biotechnology companies are small companies that have no products on the market, and thus their research and development activities are funded through massive amounts of private sector investment over many years, sometimes even decades. Without strong, predictable and enforceable protections for patented inventions, investors will shy away from investing in biotech innovation,” said Greenwood.