The FTC is threatening legal action against drugmakers over patent abuses

Transcript

LEILA FADEL, HOST:

Most drug patents are meant to expire no later than 20 years from the date they were filed. That's to allow generic drug makers into the market after that period, which ideally lowers the drug's cost and expands access. But the pharmaceutical giants have found a way to extend their patents on some common medications used by people with chronic conditions, like asthma and severe allergies. In the past, the Federal Trade Commission has warned drug makers to stop. This week, the FTC is acting more forcefully. FTC chair Lina Khan has issued letters to a number of big pharmaceutical firms threatening legal action, and she joins us now. Good morning.

LINA KHAN: Good morning.

FADEL: So what action are you taking?

KHAN: We're challenging more than a hundred improper patent listings in what's known as the FDA's Orange Book. So this is a book where firms are able to list patents, and they're only supposed to list patents covering active drug ingredients, so the substance of the drug that helps your body heal. And instead, we have found that firms are listing device patents that have absolutely nothing to do with the active ingredient, so patents that are instead covering the dispenser cap on a multidose eye dropper or the cap strap on an inhaler, which just keeps the inhalers in place. And so we've identified patents covering these components of devices that we think are improperly listing and that may in fact be resulting in Americans having to pay hundreds, if not thousands, of dollars more than they should be.

FADEL: Let's talk about how this impacts regular people who need these medications. Why are you taking this action?

KHAN: We're taking this action because I think, as we all know, there is a crisis in our country when it comes to health care costs. And all too often, people are not able to afford the medicines they need, the life-saving drugs that they need. And so the action that we're taking would affect a whole set of drug products that people use, including inhalers. You know, over 40 million people in America rely on inhalers. And a lot of the drugs that we see within the inhaler products have been around for many decades, but people are still paying hundreds and hundreds of dollars, and generic use is fairly low. It's less than 50%, even though some of these drugs and these drug components have been around for decades.

FADEL: What are the consequences for drug makers that will actually have an impact or make a change?

KHAN: So the drug companies are now officially on notice that we are contesting and challenging the patents that they've listed in the Orange Book. We're claiming these are improperly listed. So now legally, they're required to either justify and show their work and explain why these patents are listed, which again - we believe it's illegitimate. And if they cannot show why these patents are legitimately listed, then they'll have to remove them. They'll be delisted, which will open up the market for competition and make sure that people who rely on inhalers or EpiPens or a whole set of other drug products, that those people are able to access more affordable generics.

FADEL: Now, drug makers will say a move like this stifles their ability to innovate, bring more effective products to the consumer. What do you say to that?

KHAN: Look, we're talking here about inhalers, where, you know, the core parts of these products have been around forever - for decades and decades. And yet the prices are still fairly high. We haven't seen a lot of generics enter the market, we believe, because of improper patent listings. And that's a problem. And so we believe the FTC's action here is actually going to open up the market, spur innovation and spur more generics into the market, which is ultimately what's best for the public.

FADEL: Lina Khan is chair of the Federal Trade Commission. Thank you so much for joining us.

KHAN: Thanks so much.

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