Is FDA Going to Get A Little Help From Its Friends at the PTO?

Drug pricing has been a hot button issue in the U.S. for decades, and patent protections have been cited as a source of “gamesmanship” allowing brand companies to keep drug prices high.  Yet, as long as FDA and FTC have been trying to address anticompetitive behavior, the U.S. Patent and Trademark Office (PTO) has been relatively absent from these discussions.  Really, FDA and the PTO only interact in the context of patent term extensions, in which the PTO relies on FDA to determine the dates of the applicable regulatory review periods.  But President Biden wants that to change.

In the July 2021 Executive Order on Promoting Competition in the American Economy, the White House noted that patent laws “have been misused to inhibit or delay—for years or even decades—competition from generic drugs and biosimilars, denying Americans access to lower-cost drugs.”  To that end, the Executive Order directs FDA to “write a letter” to the PTO “enumerating and describing any relevant concerns” in order to “to help ensure that the patent system, while incentivizing innovation, does not also unjustifiably delay generic drug and biosimilar competition beyond that reasonably contemplated by applicable law.”  In September 2021, FDA did just that.

On September 10, 2021, then-Acting Commissioner of FDA, Janet Woodcock, sent a letter to the PTO emphasizing FDA’s commitment to fostering innovation and competition and working to address abuses of the system that serve as impediments to these goals.  FDA recognizes the critical role of patents but laments certain patenting practices in the pharmaceutical industry that are used to forestall access to lower cost medicines.  Specifically, Commissioner Woodcock’s letter cites patent thickets, patent evergreening, and product-hopping as major issues used to inappropriately impede competition:

• Patent thickets, or “continuation” patent applications, allow filers to obtain follow-on patents resulting in multiple patents on different aspects of the same product. While the term of the patent is not extended, multiple patents increase litigation burden.
• Patent evergreening, in which sponsors patent post-approval or secondary changes to previously-approved just as earlier patents are expiring, extends patent protections beyond the intended patent life.
• Product-hopping occurs when sponsors submit a new application for a modified drug product, protected by new patents, and effectively switches the market to the new product before generic competition is set to come to market. This forces the market to adopt the new product in place of the old, obviating the newly-approved generic.

These issues are at the heart of FDA’s concerns about the abuse of the patent system to thwart generic entry.  But because FDA has no authority to address any of them, it must rely on the PTO.  To that end, the September 2021 letter, at the direction of the Executive Order, FDA outlines FDA’s suggestions and questions for the PTO.  FDA suggests that it could provide training for PTO examiners to help determine whether particular documents constitute prior art to a claimed invention.  FDA also suggests that FDA and PTO could hold joint Patent Term Extension training.  In information-gathering mode (though, my snarky brain likes to think its passive aggressiveness), FDA asks for the PTO’s perspective on the possible misuse of the patent system and “whether it is considering means of limiting such practices.”  Finally, FDA asks how the Patent Trial and Appeal Board (PTAB), including Post Grant Review and Inter Partes Review, can have any impact on Orange Book-listed or biological product patents.

In July 2022, PTO responded to FDA’s letter.  In this response—which, frankly, reads like your typical response to an FDA Form 483—the PTO commits to initiatives to protect against patenting of incremental and obvious changes to drugs, providing additional time and resources for examiners, and collaboration with FDA to develop new policies.  Consequently, PTO is “prioritizing” various initiatives to strengthen the patent system for both the pharmaceutical industry and other technologies.  The PTO plans to:

• Enhance collaboration with other agencies, including the development of formal mechanisms to do so. Specifically, the PTO proposes to explore joint PTO-FDA collection of stakeholder input; to provide training to examiners in collaboration with FDA; to coordinate with other agencies to ensure consistency in industry representations to each agency; to collaborate with FDA on America Invents Acts proceedings; to collaborate with FDA to improve the Patent Term Extension process; and to work to understand the overlap between agencies with respect to regulatory policy.
• Improve procedures for obtaining a patent by providing more examining time; providing more training and resources; enhancing communication between patent examiners and the PTAB, which hears patent challenges; “considering” enhancement of information disclosure and scrutiny for continuation applications; revisiting certain double patenting practices; revising procedures for third-party input during prosecution; comparing the U.S. patenting system to that of other countries’; and providing technical input on proposed legislation.
• Improve the PTAB challenge practice by potentially applying additional scrutiny and allowing third-party input.
• Improve public participation.

The letter also states that the PTO will “consider and evaluate new proposals for incentivizing and protecting the investment essential for bringing life-saving and life-altering drugs to market while minimizing any unnecessary delay . . . .”

All in all, the letters don’t really provide much in the way of substance.  Essentially, they commit to better collaboration, enhanced training, and improving processes, but there’s little in the way of concrete plans.

But the real question here is why it took this long for PTO to get involved in the conversation.  As FDA notes, the misuse of the patent process is a significant issue, and it’s one that has been discussed in the industry for more than a decade.  But FDA can’t deal with that alone, and the PTO has been largely silent until now.  Indeed, it’s a bit late for the PTO to be trying to “understand” how FDA’s and the PTO’s authorities and responsibilities overlap; and references to “exploring the policies surrounding the use of ‘skinny labels,’” use codes, and REMS seem pretty dated more than four years after the first GSK decision brought skinny labeling front and center, almost 13 years since the Caraco decision ordering correction of a patent use code, and 15 years since Celgene’s Citizen Petition objecting to sharing its patented REMS program with competitors.  Conversations about these issues have been ongoing for years yet this seems like the first time the PTO has taken any real interest.

It’s not entirely clear why it has taken an Executive Order to get the PTO’s attention, but we’re here now.  We wait with baited breath to see if this exchange of letters is merely lip-service for the sake of the Executive Order or reflects a real commitment to collaboration.