{
  "id": "R45666",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R45666",
  "active": true,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 595995,
      "date": "2019-04-04",
      "retrieved": "2019-12-20T19:35:25.340608",
      "title": "Drug Pricing and Intellectual Property Law: A Legal Overview for the 116th Congress",
      "summary": "Intellectual property (IP) rights play an important role in the development and pricing of pharmaceutical products such as prescription drugs and biologics. In order to encourage innovation, IP law grants the rights holder a temporary monopoly on a particular invention or product, potentially enabling him to charge higher-than-competitive prices. IP rights, if sufficiently limited, are typically justified as necessary to allow pharmaceutical manufacturers the ability to recoup substantial costs in research and development, including clinical trials and other tests necessary to obtain regulatory approval from the Food and Drug Administration (FDA). However, because they may operate to deter or delay competition from generic drug and biosimilar manufacturers, IP rights have been criticized as contributing to high prices for pharmaceutical products in the United States.\nTwo main types of IP may protect pharmaceutical products: patents and regulatory exclusivities. Patents, which are available to a wide range of technologies besides pharmaceuticals, are granted by the U.S. Patent and Trademark Office (PTO) to new and useful inventions. Pharmaceutical patents may claim chemical compounds in the pharmaceutical product, a method of using the product, a method of making the product, or a variety of other patentable inventions relating to a drug or biologic. The holder of a valid patent generally has the exclusive right to make, use, sell, and import the invention for a term lasting approximately 20 years. If a court concludes that a competitor\u2019s generic or biosimilar version infringes a valid patent, the court may issue an injunction precluding the competitor from making, using, selling, and importing that competing product until the patent expires.\nIn some circumstances, FDA grants regulatory exclusivities to a pharmaceutical manufacturer upon the completion of the process required to market pharmaceutical products. Before a new drug or biologic can be sold in the United States, companies must apply for regulatory approval or licensure from FDA, which determines if the pharmaceutical is safe and effective. For certain pharmaceuticals, such as innovative products or those that serve particular needs, FDA provides a term of marketing exclusivity upon the successful completion of the regulatory process. If a product is covered by an unexpired regulatory exclusivity, FDA generally may not accept and/or approve an application seeking FDA approval of a follow-on product (i.e., a generic drug or biosimilar). Regulatory exclusivities vary in length from as little as six months to as much as 12 years depending on the specific type of drug or biologic at issue and other factors.\nLike regulatory exclusivities, patent rights can affect when generic and biosimilar manufacturers can market their follow-on products. Pharmaceutical patent disputes are subject to certain specialized procedures under the Hatch-Waxman Act and the Biologics Price Competition and Innovation Act (BPCIA). Under Hatch-Waxman, applicants seeking approval of a generic version of an existing FDA-approved drug must make a certification with respect to each patent that the brand-name drug manufacturer lists as covering the product. If the generic manufacturer challenges those patents, FDA generally cannot approve the generic drug application for 30 months while the patent dispute is litigated. For biologics, applicants seeking approval of a biosimilar version of an existing biological product may choose to engage in the BPCIA\u2019s \u201cpatent dance,\u201d a complex scheme of private information exchanges made in preparation for formal patent disputes between brand-name biologic and biosimilar manufacturers. The patent dance does not affect FDA\u2019s ability to approve a biosimilar application.\nSome pharmaceutical companies have been criticized for charging high prices and engaging in practices that are perceived by some to exploit the existing legal system governing IP rights on pharmaceutical products. For example, some generic manufacturers have claimed that brand-name drug manufacturers have unreasonably refused to sell them samples of brand-name drugs in order to impede their ability to obtain FDA approval and delay market entry of generic competition. Other commentators have criticized the practice of \u201cpay-for-delay\u201d settlements, through which brand-name drug companies settle patent litigation with generic or biosimilar manufacturers by paying them to delay their entry into the market. Still others criticize so-called patent \u201cevergreening,\u201d in which pharmaceutical companies are alleged to serially patent minor improvements or ancillary features of their products in order to extend the effective term of patent protection.\nIn recent years, a number of congressional proposals have been introduced that seek to address these and other issues in IP law that are perceived by some to contribute to high prices for pharmaceutical products. These proposed reforms range from relatively modest changes, such as increasing patent transparency, to more sweeping reforms such as pricing controls and government compulsory licensing provisions.",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4754,
          "name": "Intellectual Property"
        },
        {
          "source": "IBCList",
          "id": 4880,
          "name": "FDA Product Regulation & Medical Research"
        }
      ]
    }
  ],
  "topics": [
    "American Law",
    "Economic Policy",
    "Foreign Affairs"
  ]
}