Gerard Scimeca – Chairman, CASE
June 24, 2019

There are two priorities regarding healthcare in America on which nearly everyone agrees: finding ways to lower prescription drug prices, and supporting medical research that will lead to new treatments and cures. Washington lawmakers from both sides of the aisle have offered and continue to offer a slew of proposals weighing-in on these matters, with some ideas offering promise, with others off the mark. But a real danger lies in the attempt to offer an easy answer or quick fix through a sweeping change that will not only fail to address costs and innovation, but make things worse by undermining progress.

The Graham amendment to S.1647 is a prime example of this sort of quick-fix thinking, a proposal to tinker with and undermine patent protections that will do little more than crush innovation and savage research into new cures. Lawmakers should steer clear of it like expired penicillin.

In short, the Graham amendment, titled the “No Combination Drug Patents Act” will amend U.S. patent law to put the burden on drug makers conducting  scientific research to prove changes to an existing patented medication are not “obvious,” and therefore worthy of patent protection. The danger to future innovation cannot be overstated.

Sen. Graham’s intent is to stop drug makers from extending patent protections on their medications by making minor or trivial (i.e. “obvious”) changes that prevent the creation of a generic counterpart. But the reality is much more severe, and will deal a devastating blow to the intellectual property protections that drive billions of dollars of research into the new cures of tomorrow, and lead to improved cures today.

As CASE has argued, generics are an important part of the healthcare market and provide millions of consumers’ with options. But they are a far cry from a panacea for lowering drug prices, and should not be a motivating factor in unraveling our intellectual property rights protections that are the engine for America’s tremendous success in scientific innovation.

Still, the bigger issue remains that the Graham amendment turns patent law on its head, changing the long-established principle that a patent approved by the Patent and Trademark Office (PTO) is presumed valid. If this were to change, a drug maker that invests millions or even billions of dollars into research to improve a medication by a change in formulation, applying it to a new treatment, or devising a more effective dosage method, the burden of proof will be put on the maker to show these improvements are not “obvious” from the time the original drug was patented. Such a burden is entirely inconsistent with current U.S. patent law, and creates tremendous uncertainty as to what “obvious” means, and will lead to confusion both with patent examiners and the courts. Most certainly this legal burden will throttle research investment to make existing medications better.

Investment into reducing side-effects, making a drug more effective or potent, or impacting how it interacts with other agents are all currently critical parts of ongoing pharmaceutical research that will be stripped of patent protection if the Graham amendment is enacted.

As one example of how harmful this proposal would be, we can look to the miracle drug AZT. Its original patent was filed as a potential cancer treatment, for which it proved largely ineffective. Continued research uncovered its miraculous ability to combat the HIV virus, and today is responsible for saving millions of lives. Had Sen. Graham’s amendment been operative at this time, it’s quite possible that Burroughs Wellcome – the company that employed AZT inventor Jerome Horowitz – would have shelved the drug, as any new treatment devised would have been absent current patent protections. Instead, they made a significant investment into re-formulating the drug to include the highly potent Compound-S, changing medical history through this groundbreaking achievement.

The folly of the Graham amendment lies in its seeming simplicity; in fact it uses the word “obvious” to denote patent claims unworthy of protection. But regardless of how readily certain types of patent claims can fit into predetermined categories, in the end, they are all subjective and highly fact-specific. Patent law has long established the principle of being technologically neutral in these matters, but the Graham amendment will make it so a generic drug maker challenging a brand name manufacturer can initiate litigation with Congress already in its corner.

Aside from encouraging companies to cut funds into research to improve current drugs, Graham’s bill creates havoc with the patent process, and offers no clear guidelines. Furthermore it is unclear whether the burden against the brand name drug makers initiates during patent prosecution, litigation or both. The fact-specific nature of patent disputes makes settling these matters without prejudice ideal for the courts, not for Congress to predetermine with their elbow on the scale.

By attempting to filter out trivial patent claims Sen. Graham has instead ensnared the entire process by which we protect innovation into a giant and tangled net. Forcing companies who invest billions in research to defend their inventions with one arm already tied behind their back is a prescription for disaster, and will undermine progress and cause confusion and disarray in a patent system that is at the heart of America’s global leadership and success in innovation. The Graham amendment is a broad overreach that calls out a S.W.A.T. team to stop a pickpocket, it will do tremendous harm to medical research and future cures and must be defeated.