Taking Long View on Patent Fight Pays Off
Updated: 2:58 p.m.
How does a policy earmark worth more than $214 million garner the votes of conservatives such as GOP Reps. Michele Bachmann (Minn.) and Ron Paul (Texas)?
On Thursday, the House approved an amendment, authored by Rep. John Conyers (D-Mich.), that would change how the Patent and Trademark Office calculates a 60-day period for companies to apply for patent extensions. If signed into law, the language would provide a direct benefit to the Medicines Co., which faces the loss of its patent for its flagship drug, Angiomax, as well as to law firm WilmerHale, which is on the hook for a $214 million settlement with MDCO because it was tardy in submitting the drug’s patent extension request.
That retroactive amendment means the company can keep its patent on Angiomax and WilmerHale is free from the settlement that it agreed to with MDCO in February.
But the amendment could end up being worth much more than the $214 million that MDCO deemed as “fair” in the settlement; the company has said it expects anywhere from $500 million to $1 billion in profits if it retains the patent to the popular anticoagulant past 2014.
At issue is MDCO’s 2000 application to maintain its patent over Angiomax. Following approval of the sale of the drug by the Food and Drug Administration in December 2000, the company had 60 days to file for a patent extension, which under the law would have precluded the sale of generic versions of the drug until 2014.
In 2001, the PTO rejected MDCO’s application to extend the patent, saying its application was not filed on time. In August 2010, a federal district court agreed with MDCO that the extension was filed in time. The amendment would codify that interpretation.
MDCO and WilmerHale’s success in getting the legislation through the House during a time of deep public cynicism about how Congress works is a testament to the abilities of the companies and their lobbyists’ decision to take the long view.
MDCO, for instance, has spent a total of $16.93 million on lobbying since 2003, according to OpenSecrets.org.
“Why didn’t it get resolved years ago? Clearly they had to work it over and cajole and encourage” lawmakers and their staff to back the bill, said Steve Ellis, vice president of Taxpayers for Common Sense.
Although campaign contributions are the most scrutinized mechanisms for greasing the skids of Washington, Ellis argued that in situations such as MDCO’s, it is the traditional role of lobbyists working Congressional aides and individual Members over time that can count.
“When you hire this much lobbying muscle, a lot of it is dealing with staff,” Ellis said.
The reliance on staff is particularly apparent in how the amendment was sold to lawmakers. Although the offices for conservatives who voted for it, such as Bachmann and Rep. Mike Pence (R-Ind.), did not return requests for comment, other supporters of the measure said they voted for the bill because it makes technical corrections to the law and creates a common set of definitions.
“By eliminating confusion regarding the deadline for patent term extension applications, this amendment provides the certainty necessary to encourage costly investments in lifesaving medical research,” Conyers said in a floor statement before the vote.
Paul spokeswoman Rachel Mills said, “It did not allocate money to anyone; therefore, it was not an earmark,” and she noted that Paul ultimately voted against the final bill.
Bachmann and Paul are running for the GOP presidential nomination. Pence, a former Republican Study Committee chairman, is running for governor of Indiana.
Backers of the amendment argued that it would not just apply to MDCO, and by default WilmerHale, because it would permanently change the language in the rule.
There have been almost no instances of patent extensions being rejected because they missed the deadline, though. From 1984 to 2006, the PTO processed 700 extensions, and only four — including MDCO’s — were denied because they missed the deadline, according to Congressional testimony by PTO officials.
Still, lobbying Congress on such detailed matters is rarely something that requires heavy lifting on the Member level and can be accomplished by working staff over a period of time, Ellis said.
“A lot of this [is] at a level of minutia that is at a level where lawmakers aren’t usually involved,” he added.
Unfortunately for Members, their reliance on staff can often lead to instances such as this, where Congress has passed what amounts to a private bill for two companies, Ellis contended.
“I don’t have a lot of sympathy. You need to do your homework. … You should have done your due diligence,” he said.
But despite the years and expense of lobbying on MDCO’s part, the legislation, a version of which has passed the Senate and is supported by the Obama administration, is still not out of the woods.
Senate GOP aides said Tuesday that Sen. Tom Coburn (R-Okla.) has placed a hold on the bill because of an unrelated funding issue, and that could doom the legislation. A Coburn spokesman declined to comment on the issue. But Coburn’s opposition is likely rooted in a standoff between appropriators and authorizers over PTO fees. Coburn has consistently opposed the fee provisions in the bill, insisting that the PTO be given full control over how it spends the fees that it collects.
House appropriators, however, would retain some control over the PTO under the House bill.