What Will The Incoming Trump Administration Mean For Drug Patents?

By Ben Comer, Chief Editor, Life Science Leader

A Q&A with Megan Chacon, principal at Fish & Richardson

The Biden administration, through policy and leadership appointments, raised the level of government scrutiny over biopharmaceutical IP and patenting practices. From the FTC’s challenge (under Biden FTC appointee Lina Kahn) of Orange Book listings and the IRA’s drug price negotiations in Medicare, to raising the specter of march-in rights among other policies, life sciences CEOs have decried the higher levels of uncertainty their companies face in getting new drugs to market, and in securing an acceptable level of return on investment.

The first Trump administration also took an aggressive stance on the biopharmaceutical industry, at least initially, including support for Medicare drug price negotiation, international reference pricing, and importing cheaper drugs from other countries for American patients. Those views and political stances were largely absent from the Trump administration’s recent campaign, but as a president willing to appoint disruptors and challenge the status quo, biopharmaceutical leaders will need to pay close attention, and be patient, as the second Trump term commences.

To get an early read on what the incoming Trump administration might mean for IP and patenting practices in the biopharmaceutical industry, Life Science Leader spoke with Megan Chacon, a principal at Fish & Richardson (where current USPTO director Kathi Vidal worked previously) and a member of the firm’s life sciences industry team. Chacon has represented Big Pharma companies and biotech organizations in Hatch-Waxman litigation and other intellectual property disputes at Fish & Richardson for nearly a decade. This Q&A has been edited and condensed for clarity.     

What impacts do you anticipate a second Trump administration having on intellectual property and patents in the biopharmaceutical sector?

Megan Chacon: The first thing that comes to mind is, during the Biden administration, we saw an increased role played by the FTC and its current chair, Lina Khan, in terms of taking a closer look at listed patents. In the biopharma space you need those patents that cover small molecules to be listed in the FDA’s Orange Book. That’s the listing where the public and generic competitors can look to see what patents cover a particular drug product. Regulations regarding Orange Book listings have been around basically since the inception of the Hatch-Waxman Act 40 years ago that govern what types of patents can be listed in the Orange Book. That has been the crux of the FTC’s focus during the Biden administration — really trying to evaluate what types of patents are being listed in the FDA Orange Book. Over the past couple of years, we certainly saw more scrutiny. Letters have been sent to various drug companies requesting delisting, and there has been subsequent litigation stemming from that. What remains to be seen is what the FTC’s view or role is going to be going forward on Orange Book listed patents. I think it's a little hard to read the tea leaves on that right now. We'll have to wait and see what the Trump administration does in terms of whether Lina Khan will be chairing the FTC, or whether new folks will be brought in to lead that effort. We haven't to date really seen a particular stance from the Trump administration in terms of whether or not it will continue encouraging that scrutiny by FTC, but it's certainly something we will keep an eye on to see if there's any sort of paradigm shift there.

On the campaign trail, Vice President-elect JD Vance was complimentary of Lina Kahn’s leadership at the FTC, as recently as last August. Do you think there’s a possibility that she could stick around?

MC: I've seen some of the same comments that you just mentioned in terms of JD Vance, suggesting that there might be a place for her in the Trump administration. It's unclear if and what that role could be, whether it's her current role or a different role. With a change of an administration, however, I think there's a likelihood that Lina Khan will be potentially replaced, perhaps to elevate one of the current Republican FTC commissioners. Right now, the FTC is composed of three Democrat commissioners, including Lina Khan, and two Republican commissioners, and no more than three commissioners can be of the same party. I would not be surprised to see a shift at the FTC in that role. But again, it remains to be seen whether or not Lina Khan has another role at the FTC or elsewhere within the Trump administration.

Industry political donations seemed to hedge, with both candidates and parties receiving biopharmaceutical support. Have you gotten a sense from your clients about which candidate they preferred regarding IP protections?  

MC: It's a pretty diverse group. We have clients that are both small and large molecule makers on the branded side, and to some degree on the biosimilar and generics side as well. I think it depends on who you ask. I would say the general sentiment is that there is some uncertainty right now, as always when there’s a shift in the administration. But I do think that there are certain initiatives undertaken by the Biden administration, for example, the IRA and the focus on march-in rights under Baye-Dole, that a lot of companies have been paying attention to whether you're on the branded side or on the generic and biosimilar side. There's a lot of anticipation about whether or not that enhanced focus, or momentum, with those particular initiatives ends up slowing down [under the Trump administration], or if it's carried over. At this point, it’s kind of hard to speculate. But these issues have not been at the forefront of the Trump campaign in terms of leading into the 2024 run, even if they were more of a subject of the 2016 or the 2020 runs. Those are things that I think all biopharma companies are are interested in, and they're watching, and we are too. We're all learning where the dust settles in terms of who's going to be in the administration and who is going to control of Congress.

Do you have any initial thoughts about what might change at the USPTO under a Trump administration?

MC:  With any new administration, it's almost expected at this point that there would be a shift in terms of who the director of the USPTO is, and the director of the USPTO has a significant impact on patent policy, including patent examination and post grant proceedings at the Patent Trial and Appeal Board (PTAB), for example. [Current USPTO director] Kathi Vidal really had a role in establishing the framework for direct review and providing clarity on discretionary denials. If we’re looking to the future, what’s past is prologue. We could potentially expect an appointment similar to President Elect Trump's past USPTO appointment, Andrei Iancu. We might look back to some of Iancu’s initiatives during his time as director and try to think about how things are going to change. I think the big picture for Iancu was operational efficiency, reducing regulations, strengthening patents, and perhaps relaxing some of the Section 101 requirements. Iancu comes from the perspective of being focused on IP litigation. He was a managing partner at Irell & Manella before his time at the USPTO and after his appointment by President Trump. We are likely to see a change in leadership, and we will see how that change affects policy. I think there's probably going to be a renewed focus on the strengthening of patents, and a USPTO that could potentially be more pro business, pro innovator. We'll have to wait and see whether or not the new director comes in and takes a look at policies at the USPTO, particularly the PTAB, in terms of whether or not those policies will have an impact on making invalidating patents any more difficult.

What do you make of the Biden administration’s efforts to promote collaboration between the FDA and USPTO on drug patents?

MC: It is certainly something that everyone was paying attention to who operates in the biopharma space, or represents those types of companies, because the process of getting a drug approved, and securing drug patents, really does involve a whole host of different governmental entities. I’m not surprised that there was some focus on the idea of promoting consistency between FDA and USPTO. We certainly have seen an attempt to codify those efforts at the tail end of the Biden administration. There is the bipartisan Medication Affordability and Patent Integrity Act, which has been introduced in the Senate, and which requires sponsors of applications under FDA to certify to FDA and the PTO that information submitted to one entity is consistent with information submitted to the other. Whether or not that initiative will carry forward and eventually pass remains to be seen. Everyone wants consistency, and everyone wants predictability, but whether or not that legislation becomes law in the new Congress, we will have to wait and see.

Do you have any expectations about what might happen with the IRA? Do you think it will be expanded, limited, or repealed entirely?

MC: It’s one that is certainly being watched by the biopharma industry. It's relatively complex in terms of allowing for rules for selecting which drugs get subject to the IRA, and the protracted negotiations for drug pricing in that regard. We really have limited data. The IRA was just enacted in 2022, and we have one year, one round of products, selected under the IRA so far. I think there are aspects of the IRA that we probably can expect the Trump administration to roll back. And some of those are not necessarily patent related; it's climate change policies and those sorts of things. I think it's unclear at this point how a Trump administration would necessarily handle the drug price negotiation component of the IRA. During the 2016 campaign, the Trump administration supported allowing the federal government to negotiate drug prices for Medicare recipients, but it later dropped that proposal. In contrast, the potential Harris administration wanted to expand the IRA. I think it's relatively safe to say that maybe the Trump administration wouldn't go that route, necessarily. But I don't necessarily think the IRA is is going anywhere right away. I don't think the Trump administration is going to seek to expand or to expedite it. All that being said, we'll see where the Trump administration lands on the subject of price negotiation and drug pricing generally, because, again, we have a couple of data points when it comes to the Trump administration. Still, it’s unclear whether or not the IRA is going to look the same way it looks currently, once the Trump administration gets rolling.

Are there any biopharmaceutical patent reforms that you or your clients would like to see the Trump administration or the USPTO address in the coming years?

MC: I think one current proposal that's before the USPTO right now that has a lot of people's attention is the draft proposal on terminal disclaimers. The USPTO issued a proposed rule for comment, and this rule would require patentees to agree not to enforce any patent linked by terminal disclaimers where any claim has been finally invalidated. And the rationale behind it, as I understand it, is designed to discourage excessive patent thickets. This rule is heavily opposed by industry. I think there were hundreds if not thousands of comments on the proposal. Generally speaking, I think the way that it is articulated has met a lot of opposition. From that perspective, it's something that probably would impact a lot of innovators in the biopharma space, and one that there is some concern about.

Is there any advice you would give to biopharma leaders at the beginning of a new administration? What should executives be paying attention to, and what should they do now?

MC: Overall, one of the biggest takeaways I can offer — as hard as it's going to be — is to be patient. It really remains to be seen what will happen with all of the current initiatives, and proposed initiatives that are now on the table. We don’t know how everything will land, but we do know these things are in motion. Talk to your teams, make sure that you know the folks in your legal group, your commercial group, your regulatory groups. With the patent issues we’ve been discussing today, it can be easy to think about the topic from a narrow scope, that this is only relevant to the IP group and legal. It’s really not. These are big issues; your innovations are ultimately protected by your intellectual property. IP is a big deal in the biopharma space. Right now, patience and communication are key. Once we start seeing who the new director of the USPTO is, you can start to divine out what other initiatives people are going to want to start doing internally to address that shift. In summary, hold on to your hats. It’s wise for the C-suite to focus on IP, and to have people in various roles within their organizations keeping tabs on these issues as well.