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Senate Judiciary Committee to Vote November 17 on Special Interest Patent Extension for Claritin

Nov. 16, 1999

Senate Judiciary Committee to Vote Nov. 17 on Special Interest Patent Extension for Claritin

WASHINGTON, D.C. — A bill that would allow three-year patent extensions for the multibillion-dollar allergy drug Claritin and six other drugs is scheduled to be heard Wednesday by the Senate Judiciary Committee. The bill, S. 1172, sponsored by Sen. Robert Torricelli (D-N.J.), would cost consumers and taxpayers an estimated $11 billion.

Unless the planned hearing is derailed by the press of last minute business as Congress prepares to adjourn for the year, Senate Judiciary Committee action on the Claritin special patent extension will send a signal that Congress places a higher priority on pleasing its big contributors than meeting constituents’ needs for more affordable prescription drugs. The hearing is scheduled for 10 a.m. Wednesday in Room 226 of the Dirksen Senate Office Building.

“The Claritin patent bill will drive high U.S. prescription costs even higher,” said Frank Clemente, director of Public Citizen’s Congress Watch. “This is a test vote of whether Congress has the courage to take on the pharmaceutical industry. This is particularly crucial because next year, lawmakers will consider an affordable Medicare prescription drug benefit. Let’s hope they don’t let drug company money continue to rule Capitol Hill.”

Schering-Plough Corp, the manufacturer of Claritin, has spent $11 million since 1996 lobbying Congress for a special patent extension for Claritin, its best-selling allergy drug. It has poured nearly $1 million in soft money into Republican and Democratic coffers over the past three election cycles. Its PAC contributions to the seven Senate Judiciary Committee members who have publicly supported this effort are 17 times greater than to the 16 members who have not.

Here are the facts about this special interest legislation:

Multibillion-dollar cost to consumers and the U.S. health care system.
Consumers would pay through the nose for a three-year patent extension for Claritin and Relafen [top-selling arthritis drug], Cardiogen-82, Eulexin, Nimotop, Dermatop and Penetrex — the other “pipeline” drugs that would benefit from H.R. 1598/S. 1172. A new study by the University of Minnesota’s PRIME Institute estimates the cost at $11 billion between 2002 and 2012. Of that, $2.5 billion would be paid by Medicaid, the Veterans Administration and other government health programs. Taxpayers’ share would rise to $5 billion if a Medicare drug benefit is approved. At a time when Congress and the Clinton administration are struggling with how to make a Medicare prescription drug benefit affordable, these bills would only add fuel to the fire of rapidly rising drug prices.

Subverts the purpose of drug patents from research incentive to profit protection.
The 1984 Hatch-Waxman Act deliberately distinguished between pipeline drugs such as Claritin (so-called because they were in the FDA approval process when the Act became law) and drugs that were not that far along. Hatch-Waxman granted up to two years of patent term restoration to the pipeline drugs but, to provide an incentive for new research and development, reserved the five-year restoration period for drugs that had not been submitted for FDA approval. The legislative history is clear: “[Congress] established different maximum periods of extension to provide greater incentive for future innovations.” (H.R. Rep. No. 98-857, pt. 1 at page 41 (1984).)

Claritin already has benefited from extra patent protection.
In addition to the two-year patent term restoration, the Hatch-Waxman Act granted pipeline drugs a number of special provisions — including additional years of market exclusivity for patenting new formulations — which have benefited Claritin. The drug also got almost two years additional patent protection from the 1994 General Agreement on Tariffs and Trade (GATT).

Who’s telling the truth about FDA’s review of Claritin?
Schering-Plough claims that the FDA’s review of Claritin took too long, but the company won’t waive confidentiality requirements so the FDA can make public what took place. Rep. Henry Waxman (D-Calif.) and others have asked the General Accounting Office to investigate, and that report is pending. Why not wait for the results?

Profits, not research and development (R&D), are Schering-Plough’s priority.
In 1998, Schering-Plough earned more than one-and-a-half times as much in profits as it put into R&D (12.5 percent of its revenues went to R&D, while profits represented 22 percent). If a three-year patent extension for Claritin is approved, based on industry standards, only 3.6 percent of Schering-Plough’s additional revenue would be used for the discovery of new drugs. [University of Minnesota professor Stephen Schondelmeyer, Patent Extension of Pipeline Drugs: Impact on U.S. Health Care Expenditures, p. 10.]

Enacting H.R. 1598/S. 1172 opens the floodgate.
H.R. 1598 and S. 1172 both put the Commissioner of Patents and Trademarks — who has no expertise in this area — in charge of granting patent extensions. The criteria and process in the two bills differ slightly, but both are stacked-deck processes that would almost inevitably result in the extension being granted. Putting either into statute would invite the makers of other blockbuster drugs to ask Congress to “tweak” the process so that they could qualify for patent extensions. There are 20 such drugs [for example, Prozac, Prilosec, Vasotec] with annual sales of almost $20 billion, with patents due to expire between 2000 and 2005.

The Claritin Patent Extension Bill is opposed by 25 consumer, labor, senior and public health groups, including Public Citizen, AARP, AFL-CIO, National Council of Senior Citizens, Consumer Federation of America, United Auto Workers and AIDS Action.