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
9 Pages Posted: 6 Sep 2019
Date Written: May 28, 2019
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: Suggested Citation