Sunday, April 10, 2005

New legislation on drug/patent interface, wild card patent extensions?

Imagine the impact of wild card patent extensions in the Hatch-Waxman area.

from Chris Mondics of the Philadelphia Inquirer:

Now, the prospect of another SARS-like outbreak, or a repeat of the 2001 anthrax attacks that left five Americans dead, is spurring efforts in the Senate to enact incentives for drug companies to develop medicines to protect against biological attacks and epidemics.

Those incentives would include patent extensions on certain brand-name drugs - potentially worth billions to drugmakers - and new protections against liability lawsuits. Sen. Judd Gregg (R., N.H.), Senate Majority Leader Bill Frist of Tennessee, and Sen. Rick Santorum (R., Pa.), all key Senate players, are sponsoring one bill. In the coming weeks, Sens. Joe Lieberman (D., Conn.), the former vice presidential candidate, and Orrin G. Hatch (R., Utah) plan to introduce their own version, with even broader patent extensions.

The useful patent life on a medicine is about 10 years. Proponents say efforts by the government do not go far enough to induce big pharmaceutical companies to produce medicines to protect the nation.

"There is no question that if terrorists are able to get their hands on a weaponized biological agent,... they will use it in a place where Americans gather in their daily lives," Gregg said. "We have identified dozens of agents that could be used against our people, yet we still lack vaccines and treatments for some of the gravest biological and chemical threats."

Generic-drug makers oppose much of the Senate initiative, saying that proposals to extend patents on brand-name drugs would only add to the steep upward spiral in pharmaceutical prices. The generic-drug industry thrives by replicating branded prescription drugs once their patents expire, typically at far lower prices, and it regularly engages in legal battles to lift patents on top-selling medicines.

"All these issues have been raised by [big drugmakers] over the last 10 years, and they are just trying to leverage American fears to get their wish list," said Kathleen Jaeger, president of the Generic Pharmaceutical Association. "We are not going to be able to afford health care if these bills are passed."

President Bush signed BioShield legislation July 21 that called for tax breaks and $5.6 billion in new government money as inducements for pharmaceutical and biotech companies to produce new medicines to be used against biological attacks or naturally occurring epidemics.

Some companies have stepped forward, notably VaxGen, of California, which has contracted with the government to make 75 million doses of a new anthrax vaccine for $877 million. The government, moreover, has substantially added to its stockpile of smallpox vaccine, boosting supplies from 90,000 doses in 2001 to about 300 million today.


Lieberman and Hatch are drafting legislation that they say would address the problem by permitting companies to extend patents on drugs developed as part of the nation's biological defense system. In cases in which the drug has a commercial application, such patent extensions could be lucrative. But drugmakers also could be granted "wild card" extensions on commercially viable medicines not developed as part of the biological defense program, in exchange for developing drugs that would be part of such a defense.

Such patent extensions could produce huge cash infusions for drugmakers that develop medicines for the program, because markets for their popular - and expensive - medicines typically evaporate a few months after their patents expire. That is when generic-drug makers market less expensive copies.


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