A Bridge Too Far? Hillary Clinton’s Proposed Plan to Limit Prescription Costs Would Stifle Innovation

October 30, 2015Articles Bloomberg BNA

Reproduced with permission from Life Sciences Law & Industry Report, 09 LSLR 1249, 10/30/2015. Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033)

In response to public outrage over increasing prescription drug prices—stoked by Turing Pharmaceuticals raising the price of Daraprim from $13.50 to $750 per pill—Democratic presidential candidate Hillary Clinton has unveiled a number of proposed reforms to the prescription drug market. Announced on Sept. 22, these proposed reforms include limiting how much patients would have to spend out of pocket for prescriptions to $250 per month or $3,000 per year, as well as allowing the government to negotiate Medicare prices. Clinton also proposed several reforms to pharmaceutical and biotechnology patent protection and regulatory exclusivity that we believe are well intentioned but ill advised.

Clinton’s proposed reforms include:

  • cutting the proposed regulatory exclusivity period for novel biologics from 12 to seven years, which is closer to the five-year regulatory exclusivity period for new pharmaceutical compounds; and
  • eliminating ‘‘pay-to-delay’’ or ‘‘reverse payment settlements,’’ which are effectively settlement agreements in a patent infringement suit where name-brand pharmaceutical manufacturers pay generic competitors to settle an infringement suit rather than face a non-infringement or invalidity challenge to their patents. Presidential candidate Sen. Bernie Sanders (I-Vt.) has suggested a similar approach on his campaign website.

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