Special Interest Legislation to Extend Patent Will Raise Prescription Drug Costs for Consumers

Citizens for a Sound Economy today condemned a provision of an agriculture appropriations bill designed to continue a lucrative patent held by Columbia University. “At a time of widespread concern about access to necessary medicines, it flies in the face of common sense to guarantee a wealthy university a stream of millions of dollars from the ill and infirm,” said August Stofferahn, CSE’s Deputy Director for Health, Education and Labor Policy.

This misguided amendment (Section 2801 of S. 2536) would allow Columbia to extend a patent it received for an innovate process used in the manufacture of a number of major medicines. Pharmaceutical manufacturers license this patent to create treatments for anemia, breast cancer, cystic fibrosis, strokes, arthritis, infertility, and multiple sclerosis; they then pay Columbia 1 percent of their total sales as a royalty.

“The team at Columbia that developed this method 20 years ago deserves commendation, and the university has received nearly $300 million in royalties under patent protection. But their innovation has no right to a longer patent than any other important product or process,” Stofferahn said. “They have already been rewarded handsomely for their success.”

Nevertheless, Section 2801 would allow Columbia to reap between $100 million and $500 million in additional royalties. “It’s understandable that Columbia wants this revenue to continue. But it would be inexplicable for Senators to approve this windfall without considering the cost to consumers. Who does Columbia believe this $100 million per year would come from? Ultimately, the consumers of these medicines would bear the load,” Stofferahn continued.

The amendment comes as a last-minute insertion to “must-pass” legislation—the bill that funds the federal government’s agricultural programs for the next fiscal year. Meanwhile the university’s patent is set to expire in mid-August. “The fact that this sweeping measure comes at the last legislative minute and as a rider to unrelated legislation may be an indication of its meager merits,” Stofferahn concluded.