[Ip-health] Patent extension to benefit one drug company included in Senate patent reform legislation

Mon Feb 25 14:16:21 2008

http://pubs.bna.com/ip/bna/PLP.NSF/eh/a0b6b2y3k2

CBO Report Projects Significant Costs To Government Resulting From
Senate Bill

BNA Pharmaceutical Law & Industry Report
February 22, 2008

[snip]

Effect on Generic Rx Competition

One provision, if adopted, would essentially grant a pharmaceutical
manufacturer an extension on a popular heart medication and delay the
entry of generic price competition, according to the report.

Section 13 of S. 1145 amends 35 U.S.C. =A72 to allow the PTO director to
accept a patent filing that was 30 days late as the result of
unintentional delay. This provision, nicknamed the "Dog Ate My Homework
Act," by detractors, apparently originated in a separate bill, H.R.
1778, which was introduced in March by Rep. William D. Delahunt (D-Mass.).

However, H.R. 1778 was not the first time that such a provision has been
before Congress. The measures resembles a narrower measure from the
109th Congress that would have amended the patent term extension
provisions, 35 U.S.C. =A7156 to permit the PTO director to accept late
filings for term extensions on drug patents.

The principal beneficiary of this proposed change is The Medicines Co.,
which missed by one day the deadline for filing for an extension on its
patent (5,196,404) for the anticoagulant drug Angiomax. The CBO's report
estimates that the enactment of Section 13 would result in the granting
of an additional five years of patent protection for Angiomax.

"That added patent protection would increase the net cost for hospitals
to perform certain procedures using that drug and would lead to higher
net spending on health services by private health plans and certain
federal and state health programs," the CBO stated.

If the Angiomax patent is allowed to expire, according to the CBO,
generic versions of the drug are expected to be available by 2011. The
availability of generics would result in lowered prices for the
medication. Without the availability of generics until 2014, should such
an extension be granted, the CBO projected that between 2011 and 2018,
"hospitals would spend about $2 billion more for the drug and save about
$1 billion in other patient-care costs for a net increase in hospitals'
costs of roughly $1 billion. That increase in hospitals' costs would
result in higher payments by some public and private providers of health
insurance."

According to the CBO, Medicaid and Federal Employees Health Benefits
spending would be $2 million higher between 2011 and 2013 than otherwise
and would be $19 million higher between 2011 and 2018 .

Such delay of generic versions of Angiomax would also result in
additional costs with regard to health programs administered by the
Veterans Health Administration, the Indian Health Service, and the
Department of Defense, as well as increased premiums for federal
employees' health insurance, the CBO said. The total of these increases
in discretionary spending would be about $17 million between 2011 and
2018, the CBO estimated.

Finally, the CBO projected that permitting the acceptance of the
Angiomax filing would result in losses to the generic drugs industry
that the CBO did not have the data to estimate.

[snip]

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FULL STORY:

Provisions of the patent reform bill currently pending before the Senate
are likely to result in significant costs to the government, according
to an estimate published Feb. 15 by the Congressional Budget Office. The
provisions in question include targeted exceptions to the application of
the Patent Act in specific instances.

According to the report, in total, S. 1145, if enacted in its current
form, would result in net spending increases of $1.4 billion for the
Patent and Trademark Office, and $500 million in other discretionary
spending for the period of 2009 to 2018.

The private sector as well as state, local, and tribal governments would
also be hit with increased costs related to certain targeted provisions
of the legislation, according to the report.

Effect on Generic Rx Competition