00:00We've seen that AstraZeneca, what they did was that they had this treatment.
00:05The actual medication inside did not change at all, the administration of it.
00:12But they filed a new patent to maintain exclusivity of it.
00:15This thing, to keep the cap from coming off, was a major part of the new patent that they had
00:23filed.
00:25And to extend and to prevent this life-saving drug from going generic and bringing down costs for everybody.
00:35Thank you, Mr. Chairman, and thank you to all of our witnesses for being here today.
00:40I want to talk about one aspect of innovation in health care, which is our pharmaceutical patent system.
00:49I've served on many different committees in Congress at this point.
00:53Financial Services, you know, Natural Resources Oversight.
00:58And this word, innovation, can include really incredible breakthroughs that save people's lives.
01:08And also a lot of scammy behavior that we see across industries, you know, and financial services.
01:17Stock buybacks, for example, being an innovation.
01:20That doesn't really create anything new of value, but is certainly a new way to juice some numbers.
01:28And so I think I want to dig in a little bit on our pharmaceutical patent system.
01:34Because this system is critical to drug development in the United States.
01:39And ensuring that breakthrough drugs become available to patients here.
01:44But it is also a system that is abused by big pharma to prevent long-standing drugs from becoming cheaper
01:54and more widely available to everyday Americans.
01:58Dr. Wang, when it comes to pharmaceuticals, the federal government reviews a company's patent application
02:05and determines whether or not it meets specific standards, like creating a brand new drug to treat a specific disease.
02:12Is that correct?
02:13That's correct.
02:14And when patents, and these patents, when a drug company earns a patent for a new drug,
02:22they get a period of protection from competition when no other company can sell that same drug.
02:28Typically, 20 years from the filing, correct?
02:32Right.
02:32And the logic of this is that if you are a company and you invested millions of dollars in the
02:40development of a drug,
02:41you should have exclusivity once you develop that drug to earn that money back and have that return
02:48and be rewarded for that innovation, right?
02:51That's kind of the gist of the system.
02:54But over the years, we've seen some drug companies do some curious things with this.
03:02We've actually seen them, I think, abuse this period of protection to create monopolies over the market
03:08and then increase the prices on their drugs.
03:10One example of big pharma abusing this system is when they file additional patents.
03:16They'll make a new drug.
03:17They'll get their 20 years.
03:19Then they'll file additional patents that involve really minor and often unnecessary changes to their products.
03:28So they'll have a great pill, and then they'll just change it to a capsule and then refile the patent.
03:36And we're seeing that in quite a few treatments, correct?
03:41That's correct.
03:42In a small number of cases, some of these reformulations can help our patients.
03:46They can make treatments more available and easier to use.
03:48But in the vast majority of cases, these are lifecycle extending.
03:52Yeah.
03:52In fact, the pharmaceutical company, AbbVie, used this strategy with their drug Humira,
03:57which is used to treat rheumatoid arthritis.
03:59By barely changing their products, they obtained over 130 patents
04:06that gave them continued exclusive market control over rheumatoid arthritis treatments.
04:13And during this time, the price from Humira went from $500 for one syringe to nearly $3,000 per syringe.
04:26And that led to about $80,000 for a one-year supply for a patient.
04:32In fact, AbbVie isn't the only one doing this.
04:35I have an example right here from AstraZeneca.
04:40This is an inhaler pump.
04:42It was loaned to me by someone with asthma.
04:47And we've seen that AstraZeneca, what they did was that they had this treatment.
04:53The actual medication inside did not change at all, the administration of it.
05:00But they filed a new patent to maintain exclusivity of it.
05:03And can you guess what was the great innovation that was worth this not going generic for?
05:12I'm not aware, but I think you know the answer, Congresswoman.
05:15Yeah.
05:16It's this little plastic piece right here.
05:20And it's one of the big features of that new patent.
05:23This thing, to keep the cap from coming off, was a major part of the new patent that they had
05:31filed.
05:33And to extend and to prevent this life-saving drug from going generic and bringing down costs for everybody.
05:44I was just curious, what do you think we do about this?
05:49I think very quickly, and I'd be happy to submit more for the record.
05:51But these strategies, unfortunately, reward the very thing that we should be avoiding,
05:56which is aggressive legal maneuvers instead of the risky basic science that our country should prioritize.
06:02Great.
06:02Thank you very much.
06:03And I yield back.
06:11Thank you very much.
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