Eliminating Thickets to Increase Competition Act; ETHIC Act
Summary
The Eliminating Thickets to Increase Competition Act (ETHIC Act) aims to address patent thickets by limiting the number of patents that can be asserted in infringement actions against parties seeking approval for generic drugs or biosimilars. Specifically, it restricts patent holders to asserting only one patent per "Patent Group" in such actions. This bill seeks to amend Section 271(e) of title 35, United States Code.
The bill defines a "Patent Group" as two or more commonly owned patents or applications that are subject to disclaimers to obviate obviousness-type double patenting. The amendment would apply to applications submitted under specific sections of the Federal Food, Drug, and Cosmetic Act and the Public Health Service Act on or after the enactment date of the Act.
The ETHIC Act intends to foster competition in the pharmaceutical market by preventing patent holders from using numerous patents to delay or block the entry of generic drugs and biosimilars.
Expected Effects
The ETHIC Act, if enacted, would likely lead to increased competition in the pharmaceutical market. This is achieved by making it more difficult for brand-name drug companies to use patent thickets to prevent generic drug manufacturers from entering the market.
This could result in lower drug prices for consumers and increased access to medications. It may also incentivize innovation by requiring companies to focus on the strength of individual patents rather than relying on a large number of overlapping patents.
Potential Benefits
- Lower Drug Prices: By limiting the ability of patent holders to assert multiple patents, the bill could lead to quicker entry of generic drugs and biosimilars, driving down drug prices.
- Increased Competition: The bill aims to reduce the anti-competitive effects of patent thickets, fostering a more competitive pharmaceutical market.
- Faster Access to Medications: Streamlining the patent litigation process could expedite the availability of generic drugs and biosimilars to patients.
- Incentivized Innovation: Companies may be encouraged to focus on developing stronger, more defensible patents rather than relying on a large number of weaker patents.
- Reduced Litigation Costs: Limiting the number of patents asserted in infringement actions could reduce litigation costs for both patent holders and generic drug manufacturers.
Potential Disadvantages
- Reduced Patent Protection: Limiting the number of patents that can be asserted may weaken the overall patent protection for innovative drugs, potentially disincentivizing research and development.
- Potential for Gaming the System: Patent holders may attempt to circumvent the limitations by strategically structuring patent ownership or claims.
- Increased Litigation Complexity: Defining and identifying "Patent Groups" may lead to complex litigation over patent relationships and disclaimers.
- Unintended Consequences: The bill's specific language may have unintended consequences that could affect patent litigation in unforeseen ways.
- Impact on Investment: Reduced patent protection could negatively impact investment in pharmaceutical research and development, particularly for smaller companies.
Constitutional Alignment
The ETHIC Act appears to align with the constitutional mandate to promote the progress of science and useful arts, as outlined in Article I, Section 8, Clause 8 (the Intellectual Property Clause). By addressing patent thickets, the bill seeks to foster competition and innovation in the pharmaceutical industry, potentially leading to the development of new and improved medications.
However, some argue that limiting patent protection could disincentivize innovation, which would be contrary to the intent of the Intellectual Property Clause. The balance between promoting innovation and ensuring access to affordable medications is a key consideration in assessing the bill's constitutional alignment.
Furthermore, the bill does not appear to infringe upon any individual liberties or rights protected by the Bill of Rights.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).