Change to patent law could cost federal healthcare programs billions

A change to pharmaceutical patent law procedures could end up costing federal healthcare programs $1.3 billion over a decade.

The reason for the cost burden is because the new procedure--requested by pharmaceutical trade groups--could potentially delay new generic medicines, according to an analysis from the Congressional Budget Office, individuals familiar with the matter tell the Wall Street Journal.

The trade groups want Congress to exempt drug patents from being challenged through a process known as Inter Partes Review (IPR) that is both cheaper and faster than federal courts.

The Pharmaceutical Research and Manufacturers of America, as well as the Biotechnology Industry Organization, believe that brand-name patents should be exempt from the procedure.

Meanwhile, health insurers and lawmakers say such an exemption could increase drug spending. Already, spending on medications is on the rise--Medicare, for instance, spent more than $103 billion on Part D prescriptions in 2013, FierceHealthPayer previously reported.

But some lawmakers support the idea of an IPR exemption for drug patents, and hope to find ways to offset the rising drug costs, notes the WSJ.

IPR challenges usually are decided within 15 to 18 months, the article points out, because the process uses a different legal standard than what is used in federal courts. Drugs companies like Amgen and Biogen have lobbied lawmakers about changes to the IPR system, saying the challenges have caused them to question which experimental drugs to invest in.

And due to the drawn-out nature of the federal courts, the health insurance industry says drug makers use this slow process to their advantage and thus delay generic launches. "An exemption would be really bad for consumers and really bad for the system," America's Health Insurance Plans Executive Vice President of Policy and Regulatory Affairs Matthew Eyles tells the WSJ. The Blue Cross and Blue Shield Association also opposes the exemption.

For more:
- here's the WSJ piece

Suggested Articles

Welcome to this week's Chutes & Ladders, our roundup of hirings, firings and retirings throughout the industry.

The Senate passed a short-term funding bill that includes a monthlong delay of payment cuts to safety-net hospitals.

Digital inhaler company Propeller Health has expanded a pharmacy refill app to include CVS, Kroger, Rite-Aid and Walmart pharmacies.