WASHINGTON (August 29) — Today, the Centers for Medicare & Medicaid Services released the initial 10 prescription drugs subject to price controls under the Inflation Reduction Act. Frank Cullen, executive director of the Council for Innovation Promotion, issued the following statement regarding the development:
“Today’s announcement marks a concerning turn for America’s intellectual property system. Allowing the government to determine the price of breakthrough medicines just nine years after their introduction — without regard to their remaining patent term — undermines the entire premise of the U.S. patent system and its ability to incentivize future innovation.
The essence of the American patent system is a promise — a commitment that inventors will have a limited duration to benefit from their creations without fear of theft. This right is firmly rooted in our Constitution and has been instrumental in shaping America’s innovative economy and our global leadership. When such foundational rights are shaken, and inventors’ innovations are devalued, the ripple effect is undeniable. It diminishes the potential returns on investments and disrupts the entire incentive structure for innovation — in short, price controls that effectively gut patent protections will result in less innovation and will weaken U.S. leadership in this essential industry.
When disruptive inventors, entrepreneurs and investors see dwindling prospects of gainful returns, we will see fewer innovations, fewer new companies, and less investment. This will lead to a decline in new drugs and, consequently, a decline in generic versions. Together, this represents a devastating loss for all patients, as they struggle to find affordable and effective treatments.
We are also deeply concerned that the government is applying disparate treatment to pharmaceutical innovations as compared to other technologies. Under U.S. law, as well as international treaties, patent protection must apply equally to all technologies, without the government picking winners and losers at will. Inventors are left to wonder if other technologies will be next to have their patent term effectively shortened, therefore depressing investment in many other areas of technology, such as energy and climate change. In addition, foreign governments might now also be encouraged to pick various technologies that they believe should have a shorter effective patent term. The United States has always fought to prevent such disparate treatment of technologies, and must do so again.
C4IP calls on lawmakers to shift course and prioritize the intellectual property protections that fuel drug development in the first place. Strong intellectual property rights actually increase competition by encouraging development of competing drugs, in addition to the future development of generics. If lawmakers fail to protect intellectual property rights, the rapid and profound advancements in medicine that we have come to take for granted will slow, to the detriment of patients.”
About Council for Innovation Promotion: The Council for Innovation Promotion is a bipartisan coalition dedicated to promoting strong and effective intellectual property rights that drive innovation, boost economic competitiveness, and improve lives everywhere.