In America’s health care system, patients benefit from the balance between availability of innovative, life-saving medicines and access to lower-cost generic medicines; in fact, generic medicines account for 74 percent of prescriptions written in the U.S. This balance is based on a variety of factors. Unfortunately, one of those factors is currently under attack in the nation’s capital. It’s about the ability of brand pharmaceutical companies—like those growing in Seattle’s biotech cluster—to resolve potentially costly and lengthy legal battles with their generic counterparts to come.
As part of the generic medicine regulatory process, it is routine for companies that manufacture these medicines to file legal challenges to the patents guarding brand pharmaceutical technologies. This does not necessarily reflect on the quality of the patent at issue, but rather is a response to incentives that exist for early generic challengers.
Following these challenges, however, the two legal adversaries often find themselves entangled in a costly, lengthy patent dispute – one that could take years, and many millions of dollars, to resolve in court.
As with other types of litigation, brand and generic companies may reach a settlement agreement to resolve the patent dispute. Typically, the brand company will agree to allow the generic medicine onto the market prior to patent expiration, making it available to patients months or years sooner than if the brand company had won in court.
Unfortunately, these settlement agreements are often mischaracterized as “delaying generic entry,” so some federal lawmakers are supporting legislation that would dramatically restrict a broad range of agreements.
At face value, such restrictions are unnecessary. After all, we currently have a regulatory system in place, including Federal Trade Commission review and the courts, to help ensure that these agreements are pro-competitive and in the best interests of patients.
More importantly, however, the proposed law is likely to hinder patient access to lower-cost generics prior to patent expiration. In the U.S., 74 percent of prescriptions are filled with generics. This high rate could be undermined if lawmakers take steps to over-regulate settlements that bring generics to the market early.
It’s also important that our laws and judicial system respect the value of patents and the ability of patent owners to protect their property. Intellectual property exists for a reason – to encourage
