Statement of Administration Policy: H.R. 5475 - Providing Policies for Approving Patent Term Extensions

(SENT 8/3/92)
(House)
(Hughes (D) New Jersey and 8 others)

The Administration opposes House passage of H.R. 5475 because of section 1 of the bill. That section would establish statutory standards for congressional extension of patent terms. This legislation would have the effect of creating a formalized congressional appeals process for administrative actions. It would offer a significant economic incentive to demonstrate governmental misconduct in the drug approval process.

The Administration supports the goal of discouraging inappropriate requests to Congress for patent extensions. However, the Administration is concerned that a formalized appeals process will, in fact, increase the number of appeals and individual statutory exceptions to the patent process (which now are only a few). The likely increase in patent extensions for drugs would serve to undercut the goal of the Drug Price Competition and Patent Term Restoration Act of 1984 to provide more competition from generic drugs.

The process itself would place an additional demand on scarce resources to justify agency decisionmaking. It would encourage inappropriate challenges to a complex Executive branch process. It could have the unintended consequence of encouraging companies to manipulate the approval process to establish a record that might qualify them for an extraordinary economic benefit. It might require a more cautious approach and more detailed recordkeeping by agency employees, which could slow the approval process.