House of Representatives Prescription Drug Task Force

May 5, 1999

 

"Blue Skies" Patent Extension Proposal for Schering-Plough Would Perpetuate Thunderously High Prices for Consumers

 

H.R. 1598 Would Set Up Administrative Process to Second-Guess Scientific
Review by the Food and Drug Administration After Drugs are Approved

 

Dear Colleague:

A small group of brand-name drug companies seeking patent extensions that would cost consumers billions of dollars are backing legislation that was introduced last week. H.R. 1598 is misleadingly titled the "Patent Fairness Act of 1999," in reality it is the "Patent Extension Act of 1999." The bill proposes to create an unprecedented backdoor opportunity to grant multibillion dollar patent extensions to a handful of drugs manufactured by five pharmaceutical companies. The primary purpose of the legislation is to give three additional years of market exclusivity to Claritin, an allergy medication manufactured by Schering-Plough which was projected to have $2.1 billion in sales last year. H.R. 1596 is estimated to give a lucky few drug makers an estimated windfall of over $6 billion.

H.R. 1598 undermines the pro-consumer Drug Price and Competition and Patent Term Restoration Act of 1984, better known as the Waxman-Hatch Act. In order to increase competition and encourage innovation, the Waxman-Hatch Act grants new drugs up to five years in patent extensions and five years in market exclusivity. When the Act was enacted into law, the makers of drugs already seeking FDA approval (i.e., "pipeline" drugs) had no need for additional incentives, yet received a generous two additional years of market exclusivity -- a windfall which they now claim is inadequate.

In fact, Schering-Plough and the other companies poised to benefit from H.R. 1598 have received almost four years of additional patent protection that they could not have foreseen when they developed their "pipeline" drugs -- including two years from the Waxman-Hatch Act and nearly two years from the 1994 GATT agreement.

H.R. 1598 is drafted so that the Patent and Trademark Office is virtually guaranteed to grant all seven drugs extra patent protection. It undercuts the FDA's scientific judgement -- in fact, having the Patent Office second-guessing the FDA and its expert scientists is like having the IRS deciding which research proposals should be funded by NIH.

We are currently awaiting a report from the Govenment Accounting Office (GAO) to determine the causes for any delay in Claritin's approval (possible explanations include scientific concerns over Claritin's potential carcinogenicity, as well as Schering-Plough's own delays). In the meantime, avoid giving a $6 billion taxpayer-funded gift to the drug industry.

 

Sincerely,

 

MARION BERRY	PETE STARK	HENRY WAXMAN
Member of Congress	Member of Congress	Member of Congress