Responses to Questions for the Record by Senators Grassley, Klobuchar, and Blumenthal for Senate Judiciary Committee Hearing on 'IP and the Price of Prescription Drugs: Balancing Innovation and Competition'

Responses to Questions for the Record by Senator Grassley, Senator Klobuchar, and Senator Blumenthal

Rutgers Law School Research Paper

9 Pages Posted: 6 Sep 2019

Date Written: May 28, 2019

Abstract

In response to questions for the record after my testimony at the Senate Judiciary Committee hearing, I addressed the inquiries of three Senators.

First, I responded to Senator Grassley's questions. I explained that the market of pharmacy benefit managers (PBMs) is not competitive and that PBMs have increased prices and distorted the market. Relatedly, I noted that consolidation does not lower costs, but harms small pharmacies. And I explained how "rebate walls" are harmful to patients. I then (relying on Frakes & Wasserman) highlighted deficiencies with the Patent Office examination process that result from limited review time, asymmetric incentives, and the ex parte nature of the process. As a result, I suggested that Congress grant more resources to the Patent Office, not enact the Hatch-Waxman Integrity Act of 2018, and pass antitrust legislation.

Second, I responded to Senator Klobuchar's questions. I highlighted the concerns with abusive citizen petitions. And I supported legislation, the Stop STALLING Act, that would address these petitions, suggesting ways to strengthen the legislation. Finally, I noted that Congress could adopt helpful administrative changes that would further reduce the harm, such as those offered in S. 660, the Efficiency and Transparency in Petitions Act.

Third, I responded to Senator Blumenthal's questions. I highlighted the dangers of product hopping and patent thicketing and explained how they would be addressed by the Affordable Prescriptions for Patients Act of 2019. Finally, I discussed "killer acquisitions," which Congress could address by adjusting the Hart-Scott-Rodino Act’s pre-merger notification requirements in the pharmaceutical industry.

Keywords: pharmaceuticals, drugs, PBMs, patent examination, citizen petitions, product hopping, patent thicketing, killer acquisitions

JEL Classification: I18, K21, L40, L41, L43, L65, O34, O38

Suggested Citation

Carrier, Michael A., Responses to Questions for the Record by Senators Grassley, Klobuchar, and Blumenthal for Senate Judiciary Committee Hearing on 'IP and the Price of Prescription Drugs: Balancing Innovation and Competition' (May 28, 2019). Responses to Questions for the Record by Senator Grassley, Senator Klobuchar, and Senator Blumenthal; Rutgers Law School Research Paper. Available at SSRN: https://ssrn.com/abstract=3442654

Michael A. Carrier (Contact Author)

Rutgers Law School ( email )

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United States
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