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house Bill H.R. 1629

Should a Loophole Allowing Profitable Drugs to Have 7 Years of Patent Exclusivity be Closed?

Argument in favor

The so-called “cost recovery pathway” through which drug manufacturers can obtain seven years of patent exclusively for drugs that are profitable without patent protection artificially inflates the costs of life-saving drugs such as buprenorphine, a critical medication for medication-assisted treatment (MAT) for opioid use disorder. Ensuring that drug manufacturers cannot game the drug patent system will help lower treatment costs for patients and the healthcare system overall.

jimK's Opinion
···
05/12/2021
UPDATED: I just remembered an event from a couple years back where a large investment firm bought a group of companies that manufactured what is now called orphaned drugs- drugs which are life saving or quality of life enhancing to such a small group of people that big pharma won’t pursue them because of the limited market potential. These companies were able to pay down their development costs and turn a realistic profit even with a limited market to treat rare conditions or diseases. The investment company bought many of these companies with very generous offers that share holders or private owners could not ignore. They were to operate independently under an umbrella management company. Once these companies were situated and the sales complete, the umbrella company started to raise prices of the drug offerings, in some cases by factors of several hundred times the already profitable prices. The investment firm essentially bought these companies so they could hold those who needed these drugs to thrive or survive hostage to whatever charges the investment firm could get. This was all legal even though it was a highly immoral and a grossly unethical example of American capitalist greed. The investment firm found a way to take a families life savings and medical insurance resources and transfer whatever wealth they could get from them to their own pockets. The families payed dearly and everyone else’s insurance premiums went up. I cannot recall if or how this was resolved. I fear that other orphaned drug developers may have adopted this tactic as well as it is very profitable. I can see no compelling reason to extend patent rights to companies who can and do hold human lives hostage to their greed unless this has been regulated to the point where such exploitation is no longer possible. Sorry, but I do not know the answer regarding if legislation was ever enacted to limit blatantly gross profiteering which risks the lives of people who need these life-sustaining/life-saving drugs. … … … The rationale for a Nay vote is that currently there are no drugs which qualify so there is no need to close an exploitable loophole - is just profoundly stupid. It’s like arguing that a natural tunnel that has been discovered which bypasses all of the security of Fort Knox and opens up directly under the sensor-free floor of the US gold reserve; which does not need to be blocked because no-one has used it yet to steal the gold. … … … If we stop subsidizing and enabling big pharma to charge US customers exorbitant prices, the costs of new drug development can be spread across the entire user base around the world more equitably. … … … Now, the US consumer is subsidizing the development of drugs used worldwide. And while this country is quite wealthy compared to others, the US consumers in need if these drugs are mostly not that wealthy.
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burrkitty's Opinion
···
05/12/2021
Corporations don’t have shame. They are amoral constructs motivated and driven by profit. We cannot count on “shame”. Corporations are shameless.
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Zach's Opinion
···
05/12/2021
'Well, it's not affecting us now, so why do we need to do anything about it?' This kind of logic is partially responsible for why America did so poorly in response to COVID-19. Close the loophole.
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Argument opposed

As there are currently no drugs that have orphan drug exclusivity under the cost recovery pathway, there’s no need for this legislation. The high-profile example of the FDA revoking buprenorphine’s orphan drug designation after Sen. Jeanne Shaheen (D-NH) and other lawmakers criticized the manufacturer for seeking orphan drug designation was likely enough to shame drug manufacturers into not abusing this loophole. Alternatively, it’s important to ensure that pharmaceutical manufacturers have appropriate monetary incentives for new drug development, and this legislation would endanger pharmaceutical profits and, by extension, new drug development.

Devildog1968's Opinion
···
05/19/2021
This is the buyback for companies to invest BILLIONS of dollars in testing and development. Without this companies will be MUCH less willing to risk such big layouts. These are for PROFIT companies who make money for those holding their stocks either directly or in 401k’s. While this sounds “fair”, why should businesses be required to “beak even” just to satisfy some arbitrary rule? Why not 13 months? 24? 31 months? What about a company who WOULD have been profitable in 12 months but lost it due to some unforeseen circumstance say like COVID-19? Should these companies just be closed down? Seven years seems like a long time but this prevents long short term events from driving them to bankruptcy! Life isn’t fair and politicians needs to stop pretending they can make it so... And the rest of you need to stop deluding yourself into thinking that leads to anything but really low bars. The only way everyone can be equal, and things are fair is if the best of us play down to the level of the worst of us.
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JTJ's Opinion
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05/19/2021
So we don’t want to recognize patents anymore?
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Marshall's Opinion
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05/12/2021
R&D costs money. Drug companies need to be able to recoup some of their costs.
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What is House Bill H.R. 1629?

This bill, the Fairness in Orphan Drug Exclusivity Act, would close a loophole in the Orphan Drug Act of 1983 that can be used to block pharmaceutical competition and prevent innovative treatments for opioid use disorder from coming to market. To this end, it would require that all drugs that obtain seven years of market exclusivity under the Orphan Drug Act to show that they have no reasonable expectation of recouping research and development costs through sales in the U.S. within 12 years of first marketing the drug.

Currently, the Orphan Drug Act of 1983 allows pharmaceutical manufacturers to secure exclusive seven-year marketing rights for therapies that receive orphan drug designations. For a drug to qualify for orphan designation at present, it must either: 

  • Treat a drug or condition that affects fewer than 200,000 people in the U.S., or

  • For disease or conditions affecting 200,000 or more people, there must be no reasonable expectation of recouping R&D costs through sales (the “cost recovery pathway).

At present, new opioid medications are able to obtain orphan drug designation by “piggybacking” onto older drugs’ orphan drug status. This is allowed even if the new opioid medications are expected to easily recoup their R&D costs.

Impact

Patients who need medications for treatment; drug manufacturers; the FDA; and the Orphan Drug Act of 1983.

Cost of House Bill H.R. 1629

A CBO cost estimate is unavailable.

More Information

In-DepthSponsoring Rep. Madeleine Dean (D-PA) reintroduced this bill from the 116th Congress to close a loophole that allows manufacturers of drugs for opioid use disorder to game the pharmaceutical patent system by “piggybacking” new drugs’ patents off of older drugs’ patents:

“The Fairness in Orphan Drug Exclusivity Act will eliminate barriers for innovative medication assisted treatments (MAT) to come to market, boost competition in the marketplace, and drive down the cost of new medicines.”

Original cosponsor Rep. Marc Veasey (D-TX) adds:

“Each year, the opioid crisis impacts millions of families in every crevice of our country. The Fairness in Orphan Drug Exclusivity Act will help us curb the loss of life by expanding access to a wide range of new medication-assisted treatments that will create more options in the marketplace.”

Sen. Jeanne Shaheen (D-NH), who has been an original cosponsor of this bill’s Senate companion in both the 116th and 117th Congresses, expressed her support in a press release:

“Congress needs to do everything in its power to curb skyrocketing prescription prices, and that includes cracking down on drug manufacturers who abuse the system to prevent more affordable competitors from coming to market. As our communities fight to turn the tide of the substance use disorder epidemic, we need to be doing everything we can to ensure patients and treatment providers have access to affordable, effective medication to respond to this crisis. I’ll continue to work across the aisle to reduce prescription drug costs and increase market competition among manufacturers so Granite Staters and Americans across the country don’t have to pick between affording their medication and paying the bills.”

This legislation has one House cosponsor, Rep. Marc Veasey (D-TX), in the 117th Congress. Its Senate companion, sponsored by Sen. Bill Cassidy (R-LA), has two Democratic Senate cosponsors. On May 11, 2021, an effort to pass this bill in the House failed on a 250-168 vote under the suspension of the rules process, which requires a two-thirds majority for passage.

In the 116th Congress, Rep. Dean introduced this bill with the support of seven bipartisan House cosponsors, including four Democrats and three Republicans. It passed the House by a unanimous voice vote but was not voted on in the Senate. Its Senate companion, sponsored by Sen. Cassidy, had two Democratic Senate cosponsors and did not receive a committee vote.

Numerous patient advocacy groups, including AIDS United, Aimed Alliance, Young People in Recovery, No More ODs – The Savannah Harm Reduction Coalition, A Mother’s Addiction Journey supported this bill in the 116th Congress.


Of NoteThe Orphan Drug Act was enacted in 1983 to incentivize the development of drugs for rare disease by giving manufacturers seven years of exclusive marketing rights from the date of these drugs’ approval. During the seven-year exclusivity period, other drug manufacturers are prohibited from bringing generic versions of the same drug to market.

Currently, drug companies can use piggybacking of patents to obtain seven years of market exclusivity for new drugs even when they are economically viable without this patent protection. Maintaining exclusivity can allow drug companies to make billions in profit without market competition.

In 2019, it was revealed that the manufacturer of buprenorphine, a drug that is critical to medication-assisted treatment (MAT) for opioid use disorder, was attempting to use the orphan drug approval process to secure an additional seven years of exclusivity and block potentially cheaper generic versions of the medication from reaching the market. In response to this, Sen. Shaheen wrote a letter to the Food and Drug Administration (FDA) calling on it to prevent buprenorphine’s manufacturer from abusing the system in this way. This, along with public uproar, led to the FDA revoking buprenorphine’s orphan drug status.

There are currently no drugs that have orphan drug exclusivity under the cost recovery pathway.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / malerapaso)

AKA

Fairness in Orphan Drug Exclusivity Act

Official Title

To amend the Federal Food, Drug, and Cosmetic Act with respect to limitations on exclusive approval or licensure of orphan drugs, and for other purposes.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Health, Education, Labor, and Pensions
  • The house Passed May 19th, 2021
    Roll Call Vote 402 Yea / 23 Nay
      house Committees
      Health
      Committee on Energy and Commerce
    IntroducedMarch 8th, 2021

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    UPDATED: I just remembered an event from a couple years back where a large investment firm bought a group of companies that manufactured what is now called orphaned drugs- drugs which are life saving or quality of life enhancing to such a small group of people that big pharma won’t pursue them because of the limited market potential. These companies were able to pay down their development costs and turn a realistic profit even with a limited market to treat rare conditions or diseases. The investment company bought many of these companies with very generous offers that share holders or private owners could not ignore. They were to operate independently under an umbrella management company. Once these companies were situated and the sales complete, the umbrella company started to raise prices of the drug offerings, in some cases by factors of several hundred times the already profitable prices. The investment firm essentially bought these companies so they could hold those who needed these drugs to thrive or survive hostage to whatever charges the investment firm could get. This was all legal even though it was a highly immoral and a grossly unethical example of American capitalist greed. The investment firm found a way to take a families life savings and medical insurance resources and transfer whatever wealth they could get from them to their own pockets. The families payed dearly and everyone else’s insurance premiums went up. I cannot recall if or how this was resolved. I fear that other orphaned drug developers may have adopted this tactic as well as it is very profitable. I can see no compelling reason to extend patent rights to companies who can and do hold human lives hostage to their greed unless this has been regulated to the point where such exploitation is no longer possible. Sorry, but I do not know the answer regarding if legislation was ever enacted to limit blatantly gross profiteering which risks the lives of people who need these life-sustaining/life-saving drugs. … … … The rationale for a Nay vote is that currently there are no drugs which qualify so there is no need to close an exploitable loophole - is just profoundly stupid. It’s like arguing that a natural tunnel that has been discovered which bypasses all of the security of Fort Knox and opens up directly under the sensor-free floor of the US gold reserve; which does not need to be blocked because no-one has used it yet to steal the gold. … … … If we stop subsidizing and enabling big pharma to charge US customers exorbitant prices, the costs of new drug development can be spread across the entire user base around the world more equitably. … … … Now, the US consumer is subsidizing the development of drugs used worldwide. And while this country is quite wealthy compared to others, the US consumers in need if these drugs are mostly not that wealthy.
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    Corporations don’t have shame. They are amoral constructs motivated and driven by profit. We cannot count on “shame”. Corporations are shameless.
    Like (34)
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    It is far easier to extend patent exclusivity through drug development programs on new conditions documented by doctors using a drug off label when no approved treatments exist than for orphan drug conditions as there are more patients available for the clinical trial and to sell to once approved. Closing this alleged loophole will halt orphan drug research & development by removing funding. Orphan drugs are developed to treat a rare disease which affects fewer than 200,000 people. Approximately 7,000 rare diseases have been identified. Before the orphan Drug Act (1983) there were only 38 orphan drugs. Since the passage of this act (37 years from 1983 until 2020) 552 drug treatments have been approved but that still leaves 6,000+ conditions without treatment. After being involved in drug development for 4 orphan conditions my observation is that few of these efforts succeed. All 4 that I was aware of failed. The targets for success were reduced to those define by patient families that in any small way would improve or extend life. 3 of the 4 projects were based on patient families requirements because the patients had already died. It is difficult at best to do this much less to extend patent life on an existing drug. And it was a heart wrenching process taking requirements from patients & families. The real reason Biopharma invests into orphan drugs besides the humanitarian aspect is that many are caused by a single gene mutation and in better understanding the implications for this they hope to develop personalized medicine for drugs including diagnostics & treatments. Without this Act orphan drug development will cease as it will cut off funding for both the humanitarian effort as well as scientific research into personalized medicine. https://rarediseases.org/new-study-investigates-the-number-of-available-orphan-products-generics-and-biosimilars/
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    'Well, it's not affecting us now, so why do we need to do anything about it?' This kind of logic is partially responsible for why America did so poorly in response to COVID-19. Close the loophole.
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    While I believe drug prices need to be in check & I know the way to do that is UNIVERSAL HEALTHCARE, the only incentive to develop drugs for rare diseases is the ability to fund research & make money...or have the drugs subsidized.
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    The length of ALL patent exclusivity rights should be cut from what they currently are. This is especially true for essential drugs. The most egregious example of patent abuses by drug companies is Insulin. Not all that long ago there were three standard generic insulins. A vial of any one of them cost less than $10. Depending on a person's dose, it could last several weeks. Now you can multiple that cost X 15 or more--thanks to exclusive drug patents. I just looked up the cheapest Humulin N-100 10ml runs $185! One of worst offenders is Eli Lilly based in my home town Indianapolis. https://www.businessinsider.com/video-katie-porter-tears-into-pharma-ceo-whose-company-inflated-its-prices-for-two-major-drugs-2021-5
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    For the last 15 years, I have been paying upwards of $3K a month for a biologic medication to treat rheumatoid arthritis. I do not have the luxury of working for myself or taking time off because, without excellent insurance, this medication costs more than my mortgage every month. I have a great job with excellent health coverage. When that wasn’t the case, I struggled to pay the 20% copayment. If we can’t have single payer healthcare (which is my lifetime dream), at least we could keep companies from price gouging on their medications.
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    Rep. Katie Porter demonstrated that most of these profits go to executives and shareholders, not research and development. R & D costs are not as high as the corporations want us to believe.
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    Go burrkitty! As always, loving your comments! ❤️😊❤️
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    Based on what is written, it stands to reason to just close the loophole.
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    My husband has Neupro patches to control his tremors from Parkinson’s Disease. ( thanks to 18 months in the jungles of Vietnam and lots of Agent Orange). Our copay is $400.00 because the patches are still patented. He does get $285 a month from the VA for being poisoned for 18 months. When the patent was close to running out they changed the adhesive on the patch and bingo.... the patent was renewed. So, we will have to continue paying the HUGE copay so big pharm gets greater profits. Agent Orange... the gift that keeps on giving.
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    Yes! Let’s make drugs affordable for those who need them!
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    Things that are necessary to stay alive should not be sold for a profit.
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    Because of the covid lockdowns many of the rehab facilities were also closed and 2020 is likely the deadliest year for overdoses. On top of that drug seizures have gone up 50% along our southern border. No thanks to Biden 🙄. Sounds like this drug would be helpful in Biden’s America in combating opiate addiction as we have likely gained more addicts.
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    Let's put lives before profits for a change.
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    Isn’t there law that forbids monopolizing a product or a industry to keep the free market you all always claim capitalism right then how can you allow one company 7 years to rob people by creating artificial supply disruptions followed by the price increases oh wait that is capitalism take what yours an fuck the other guy my fault
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    Absolutely! No loopholes!
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    Might be a great bill and probably would save lives!!!
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    Taking the profit incentive away takes the incentive for development away. And consider that humanity has survived all this time without these particular drugs
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    Yes another rule that profits the corporation and screws the public...
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