Big Drug Makers' TacticsSep 16, 2002 | The Washington Post
The hottest fight now concerns the rules on the duration of drug patents. Under existing law, drug companies can extend patents for 30 months beyond their normal expiration dates by asserting that makers of cheap generic copies are violating some rule or other. The extension is automatic, however weak the assertion; what's more, the drug companies can make such assertions more than once for the same drug if it's protected by more than one patent. The Senate has passed a bill to restrain this practice; it would allow only one automatic 30-month stay per drug and would require patent holders to convince a judge of the merits of their case in order to secure a second one.
This is an eminently reasonable reform. The Congressional Budget Office estimates that it would save consumers $60 billion over 10 years by making generics more widely available; it would do this without compromising drug companies' rights to defend their patents in court. But the drug companies paint the Senate bill as an attack on the idea of intellectual property, and they have gone beyond the normal practice of making their argument to Congress and the public. They also have taken their case to companies that, hoping to reduce the cost of employee health plans, lobbied in favor of the Senate legislation.
This month Georgia-Pacific, a paper company, asked that its name be withdrawn from the Web site of Business for Affordable Medicine, the coalition of state governors and corporations that supports the Senate bill. E-mails between company officials, described in the Wall Street Journal, suggest that Georgia-Pacific's decision reflected pressure from Eli Lilly, a drug company that is one of Georgia-Pacific's big customers. Georgia-Pacific has been hoping to conclude a three-year sales deal with Eli Lilly, making this a particularly bad time for Georgia-Pacific to annoy its client. One Georgia-Pacific official reportedly wrote that he was "getting more concerned we may lose our business position if this is not managed correctly."
Eli Lilly denies linking its procurement decisions to Georgia-Pacific's view of the Senate bill, but it acknowledges a policy of contacting other firms to explain its position on the legislation. Whatever the truth, it's striking that other one-time supporters of the affordable-medicine alliance recently have pulled back: Verizon Communications and Marriott International have both quit, and United Parcel Service has asked that its logo be removed from the coalition's Web site. Given that all these companies stand to benefit from lower drug prices, it's a fair guess that drug-company pressure had something to do with their decisions. It's also a worrying sign that the Senate bill faces tough sledding in the House, whose members now have to choose between affordable medicines and placating the drug lobby.