Supreme Court decision deals blow to pharma, but a win for generic drugmakers

The U.S. Supreme Court upheld changes Monday made by the Obama administration to patent law, which brand name drugmakers say have dire consequences for the pharmaceutical industry. They argue the changes "breed uncertainty and stifle innovation" in American medicine, while generic drug companies say the changes will help control drug prices, according to a report from STAT.

The case centers on a process for challenging patents called inter partes review, which was passed by Congress in 2011. In the past, patents were challenged in court litigation, and were presumed to be valid and understood by their "plain and ordinary meaning," according to the report. However, under inter partes review, patent challenges are heard by an appeals board within the U.S. Patent and Trademark Office, and are interpreted more broadly. As a result, they are more likely to be overturned.

The plaintiff in the Supreme Court case was a company whose patent on a speedometer designed to warn drivers of speeding was invalidated under inter partes review, according to the report. The pharmaceutical industry backed them, saying the review process also has a profound impact on drug patents.

While brand name drugmakers argue that "meaningful patent protection is required to justify investments in drug development," generic drug companies and health insurance plans supported the administration and the Supreme Court's ruling. They contend brand name drugmakers exploit the patent system to maintain high prices.

Justice Stephen Breyer wrote the Supreme Court opinion siding with the Obama administration, saying the federal government was within its legal authority when it changed the review process to ensure patents are interpreted more broadly. The justices decided to uphold the inter partes review unanimously, though Justices Samuel Alito and Sonia Sotomayor dissented on one section, according to STAT.

The generic drugmakers' trade group supported the decision.

"Today's decision from the Supreme Court is a significant win for consumers," America's Health Insurance Plans President and CEO Marilyn Tavenner and Generic Pharmaceutical Association President and CEO Chip Davis said in a joint statement, according to STAT. "By protecting and reaffirming the importance of the inter partes review, the Court recognizes the vital need for an efficient patent review process — one that promotes a competitive, affordable prescription drug market for consumers."

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