The biopharmaceutical industry in New Hampshire plays a crucial role in the state’s economy, contributing $5.2 billion in economic output, directly employing 3,854 people, and supporting 15,956 jobs across the state, as of 2022. This thriving sector reflects New Hampshire’s reputation as a business-friendly state. To ensure continued growth, it is vital research and pharmaceutical enterprises are protected through strong intellectual property (IP) policies. This protection is essential for recognizing and rewarding the innovations that drive this industry.
Unfortunately, the Senate HELP Committee is considering two legislative proposals that could weaken the existing patent system and would threaten future research and development (R&D) investments. One of those proposals, Senate Bill 2780 or the Medication Affordability and Patent Integrity Act, introduced by Sen. Maggie Hassan, adds burdensome and duplicative requirements for drug manufacturers, such as submitting additional information to the United States Patent and Trade Office (USPTO) and increasing the amount of red tape manufacturers must work through to bring new, sometimes lifesaving, therapies to market. These new regulations are unnecessary, potentially slowing the development of new treatments and risking patient data confidentiality. Moreover, the bill overlooks the importance of America’s generics industry in providing affordable healthcare.
Supporters of Senate Bill 2780 argue it would boost competition in the generic drug market. However, the U.S. generic drug industry is already highly successful, with 90 percent of prescriptions filled being generics, and a 97 percent prescription rate when generics are available. The FDA has approved over 32,000 generic drugs to date. The additional requirements imposed by the bill could disrupt this success, jeopardizing patient access to affordable medications.
Another concerning legislative initiative the Senate HELP Committee will potentially undertake is the Biosimilar Red Tape Elimination Act, which seeks to limit the FDA’s ability to require “switching studies” that prove the interchangeability of a biosimilar with an existing biologic. These studies are critical for ensuring patient safety while transitioning to more affordable biosimilars. The bill also fails to address the distorted incentives that hinder patient access to biosimilars. Pharmacy Benefit Managers (PBMs) and insurers often prioritize expensive biologics over cheaper, interchangeable biosimilars due to financial incentives. Without addressing these issues, the potential benefits of biosimilars will not be fully realized and patients will continue to be guided towards more expensive medications.
Instead of pursuing these misguided legislative efforts, the Senate HELP Committee should focus on meaningful PBM reform. The rising cost of prescription medications is a pressing concern for millions of Americans, affecting access to essential drugs and overall healthcare outcomes. PBMs play a significant role in drug pricing, often securing large rebates from pharmaceutical companies but failing to pass these savings on to patients. This practice leads to higher out-of-pocket expenses for patients and limits access to necessary medications. The role of PBM middlemen is crucial in the medicine supply chain, but they function in obscurity within the healthcare system.
However, the more the public learns about PBMs, the more Congress should be compelled to act. A bombshell investigative report from The New York Times revealed, “the job of the PBMs is to reduce drug costs. Instead, they frequently do the opposite. They steer patients toward pricier drugs, charge steep markups on what would otherwise be inexpensive medicines and extract billions of dollars in hidden fees.”
Congress, including the Senate HELP Committee, would do well to follow the example of the FTC Chair, Lina Khan, who said her agency plans to scrutinize big PBMs. She rightly noted, “Dominant pharmacy-benefit managers can hike the cost of drugs—including overcharging patients for cancer drugs.”
Americans deserve healthcare transparency and system accountability. It’s time for Congress to act in the patient’s best interest by protecting the intellectual property system that allows American biopharmaceutical companies to innovate and implement lifesaving technologies and reforming the exploitive PBM industry.
