Less Is More — the Premise of the Biosimilar ‘Patent Thicket’ Bill

As part of a push to increase competition and lower drug prices, the U.S. Senate recently passed a bill that limits the number of patents that can be asserted in biosimilar litigation. The Affordable Prescriptions for Patients Act of 2023 (S.150) mandates that a maximum of 20 patents — with some exceptions — can be asserted against a biosimilar competitor in a Biologics Price Competition and Innovation Act (BPCIA) action. Proponents applaud the bill as ending the practice of creating “patent thickets,” where reference product sponsors frustrate competitors by asserting a multitude of patents. However, research allegedly linking patent thickets to biologic drug pricing remains hotly contested between innovator and follow-on biologic manufacturers, making the eventual impact of the bill unclear.

The bill proposes to amend 35 U.S.C. § 271(e), the patent infringement statute, to create considerations unique to litigation under the BPCIA. Specifically, the bill caps the number of certain asserted patents at 20, sets out which patents are subject to the cap, provides mechanisms to exceed the cap, considers in BPCIA litigation whether a reference product sponsor has acted so as to support “good cause” to exceed the cap, and limits application of the cap based on whether a biosimilar competitor has acted in support. See S.150 providing a new provision at 35 U.S.C. § 271(e)(7)(A)-7(E). Key to the operation of the bill to prevent application of patent thickets is the specification of exactly which patents are subject to the cap. In particular, the bill covers later-filed patents often thought of as life cycle management patents that Director Kathi Vidal has characterized as “incremental, obvious changes to existing drugs.” (Vidal and Robert M. Califf, “The Biden Administration is acting to promote competition and lower drug prices for all Americans,” United States Patent and Trademark Office website, July 6, 2022.) Opponents of the bill, unsurprisingly, maintain that no change is needed, that the patent system functions correctly and that all inventions meeting patentability requirements should be granted patent rights.

Stay tuned for the next blog post on the details of Bill S.150.