A Biologic Problem

The Supreme Court has agreed to hear a case next term, Sandoz v. Amgen; the justices will try to untangle devilishly complicated patent provisions buried deep in the Affordable Care Act. The relevant chapter of the ACA, known as the Biologics Price Competition and Innovation Act, is so obscure that seven years after Obama­care became the law of the land, this is the very first case interpreting it.

The core issue involves patent protections for specially engineered drugs called biologics. Creating the drugs requires binding thousands of atoms together into massive molecules: Research and development is hugely expensive—not to mention the costs of getting FDA approval.

With most such innovations, production costs go way down after the initial invention. Once one company figures how to make a biologic, others can copy the process and market the drug much more cheaply. This is why there are patents in the first place. As John Duffy reports at SCOTUSblog, Amgen, which developed the original drug in this litigation, wants more protection against imitators; Sandoz, which developed a generic version, wants less. The companies also disagree over how the FDA should regulate drugs that are similar to existing ones but not exact copies, what information the companies have to share with each other, when they have to do it, and how courts can enforce other provisions of the bill, if at all.

If it seems complicated, that’s because it is. The federal circuit court judges grappling with the case wrote, “Winston Churchill once described Russia as ‘a riddle wrapped in a mystery inside an enigma.’ . . . That is this statute.”

Like the rest of Obamacare, the section on biologics was hastily drafted and is turning out to be a nightmare to implement. Maybe it’s not such a bad thing that the Senate GOP is taking its time figuring out a replacement. But it’s also a reminder that the ongoing mess known as Obamacare needs to be repealed.