FDAnews Drug Daily Bulletin
Pharmaceuticals / Regulatory Affairs

Senators Introduce Bill to Close Patent Loophole

March 13, 2018

Senators Tom Cotton (R-Ark.), Claire McCaskill (D-Mo.), and Pat Toomey (R-Penn.), along with other lawmakers, introduced the Preserving Access to Cost Effective Drugs (PACED) Act to address a potential legal loophole that could allow patent holders to block competitors from entering the market.

Under current law, patent holders can transfer patent ownership to Indian tribes, allowing the tribes to claim sovereign immunity and evade review if a dispute arises, a “loophole” the senators believe could lead to widespread patent abuse and increased drug costs.

“Sham transactions involving the transfer of patent ownership from a pharmaceutical company to a tribe for the sole purpose of shielding the patent from challenges are a clear abuse of our patent system and set a dangerous precedent for other consumer products,” Sen. Toomey said.

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