CASE Letter Warns North Carolina Congressional Delegation of Danger of Weaker Patent Protections

September 24, 2024

Members of the North Carolina Congressional Delegation:

Consumer Action for a Strong Economy (CASE) writes today to express strong opposition to misguided calls to undermine America’s historically strong patent protections.

While CASE welcomes the opportunity for constructive dialogue about ways to help lower prescription drug costs for consumers, abusing laws like Section 1498 to lower prices ignores how the pharmaceutical innovation ecosystem actually works. The approach also fails to address the real problems plaguing the American healthcare system.

Bringing a new drug to market is expensive and time-consuming. Innovative companies spend an average of $2.6 billion on research and development over 10+ years before they can offer a new treatment to patients. Moreover, according to the Congressional Budget Office, only 12 percent of drugs that start clinical trials ultimately receive FDA approval. Creating new medicines is a risky business, and companies need to be able to secure a return on investment. Without strong patent and intellectual property (IP) rights to protect their innovations, businesses will lack the incentive to engage in the crucial research that goes into developing novel treatments and therapies, ultimately depriving patients of access to care.

Calls to undermine these IP protections also ignore the root causes of skyrocketing prices, which lie in anti-competitive practices by pharmacy benefit managers (PBMs), as established by a Federal Trade Commission report from earlier this year. With just six companies controlling 95 percent of the prescription drug market in the United States, PBMs wield outsized power over prescription drug prices.

Lawmakers’ time would be far better spent investigating the role these middlemen play in increasing costs for prescription drugs in this country. Particularly, lawmakers should focus their attention on PBMs’ rebate system, which favors drugs with higher list prices due to the larger rebates PBMs can extract from manufacturers. This incentive structure means one thing: the largest and most powerful PBMs profit while consumer costs rise and patients suffer.

Thanks to medical innovators on the other hand, Americans now have access to revolutionary new products like diabetes and obesity medications. We cannot jeopardize future breakthroughs that will continue to improve patient outcomes, all while healthcare middlemen get away with manipulating the system to line their own pockets.

Sincerely,

Consumer Action for a Strong Economy (CASE)

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Consumer Action for a Strong Economy
1800 Diagonal Road, Suite 600
Alexandria, VA 22314

@CASE_forAmerica