Drug Pricing and Patents – Part I

by Dennis Crouch

My law school Dean, Lyrissa Lidsky recently published a new op-ed entitled Patent reform is needed to protect patients’ access to lifesaving drugs.  Dean Lidsky is in the midst of breast cancer treatment that includes $150,000 for the biologic drug Herceptin.  Genentech (Roche) has aggressively protected this multi-billion-dollar marketplace by asserting its patent rights against potential competitors.

Dean Lidsky is receiving the treatment and insurance is paying price, but argues that the cost is simply too high:

I’m grateful that pharmaceutical companies continue to make discoveries like the one that saved my life. But Congress should pursue patent reform that puts patients first. Our lives are worth it.

The Op-Ed does not present a solution, but does cite to efforts by former Mizzou Law School professor Senator Josh Hawley (R-MO) and others.

Hawley and Sen. Rick Scott (R-FL) proposed the Transparent Drug Pricing Act of 2019 (S.977) includes a fairly weak transparency proposal requiring each state to adopt policies requiring pharmacists to disclose the price of prescription drugs.

The Bill would also limit the “retail list price” of U.S. drugs to “the lowest retail list price for the drug among Canada, France, the United Kingdom, Japan, or Germany.” Sen. Hawley explains in his press release: “There is no reason why U.S. pharmaceutical companies sell drugs to people in foreign countries far cheaper than what they charge Americans.”  As it stands, the Bill this provision could be easily skirted by manufacturers and retailers.  Notably, the Bill does not (1) define “retail list price;” (2) offer any enforcement mechanism; or (3) indicate if any agency would have authority to enforce the pricing provision.  Unless those elements are tightened-up, the provision will be mere lip service.

Prior to becoming Senator, Josh Hawley helped lead the charge against the Affordable Care Act (Obamacare) both as Missouri AG and privately in the Hobby Lobby case.