If you were unaware of the events that have been ongoing in drug industry, back in 2012 the Leahy–Smith America Invents Act was signed into legislation by President Obama. The legislation presents the largest alterations to the US Patent system since 1952. Essentially it changes the patent system from a “first to invent” to a “first to file” system. The legislation is intended to eliminate poorly crafted or poor quality patents. This opened the doors for patents owned by drug firms to be challenged as well as many other products.
To see a summary of this America Invents Act click this link.
A well known hedge fund manager Kyle Bass has in recent times been challenging certain drug patents. The results of his challenges has often impacted public stock valuation of the drug companies who’s patents are being challenged.
Monday one of his challenges hit a brick wall when the US Patent and Trademark Offices declined to review two patents on Acorda Therapeutics multiple sclerosis drug Ampyra.
Ampyra is prescribed for multiple sclerosis patients where in may help their ability to walk though the medication also has been known to help with other symptoms of MS as it helps assist nerve signal conductivity. It is however prescribed for assistance in walking only.
the US Patent and Trademark Offices decided to reject reviewing the patents nature. The drug industry as well as people within the medical community have raised many concerns about hedge fund challenges to medication patents with the intent to make money by driving down the stock values.
Earlier this year a review of the first Ampyra patent was filed Acorda’s stock value dropped 10% for example but other companies have also been impacted by these challenges.
Bass claims the method behind his logic and actions is big companies extend patent protection in by altering dosages and / or packaging thus protecting patents and keeping the costs of the medications high.
The patent office has said no, Ampyra patents are not new and thus the patents will no longer be allowed to be challenged.
Drug firms have been lobbying congress to prevent hedge fund entities from submitting such reviews.
Last month Celgene corporation requested that the Patent and Trademarks office sanction Bass for attempting to profit from them by short-selling when the valuation of their stock falls.
Bass believes that his challenges will help lower drug prices and the fact he can make money in doing so is acceptable.
Source: Reuters
