Specifically, Gardner proposes to make it patent misuse to charge much more in the United States for the same drug than in the rest of the G7. According to Gardner, “it would be presumptive patent misuse to charge more than 125% of the average price in the other 6 countries in the G7 and it would be conclusive patent misuse to charge more than 150%.” This innovative change would be a simple change in the U.S. patent laws and would be very impactful. Said Gardner, “If the patent is being ‘misused’ in this way, the patent would be invalidated and/or unenforceable, opening up competition for generics. So the owner of a drug patent would have a strong interest in avoiding losing the protection of the patent and would hold down U.S. prices and/or drive up prices around the world. Either way, we (the U.S. consumers) would over time end up paying the real price of patented medicines, not the exaggerated price which includes a subsidy for foreigner consumers.”
Patent misuse is currently a defense to enforceability of a patent. Gardner’s proposal would be a significant expansion of the patent misuse doctrine, and one that would no doubt face substantial hurdles since the pharmaceutical industry would be guaranteed to protest.
Still, Gardner does make an interesting point on some levels, which is one that we have made here in the past. US consumers subsidize cheaper drugs for the rest of the world, which is undoubtedly one of the reasons that health care costs are out of control.
“I have long considered it terribly wrong that we pay a monopolized market price for medicines covered by patents in the U.S., while in most other G7 countries the local (national) government sharply controls the maximum price that the pharmaceutical companies can charge. This causes consumers in the U.S. to pay much, much more for the same drugs as sold in other countries.” Indeed, this price disparity has created the cottage industry of people driving across the Mexico and Canada borders to buy cheaper drugs. Gardner goes on to say, “The net result is that the U.S. consumer is paying much more than he/she ought to and the foreign consumer is paying a good bit less than he/she ought to. So in effect, the U.S. consumer is subsidizing low drug costs for foreigners. To me, forcing the U.S. consumer to subsidize foreign drug prices is outrageous.”
Gardner was the only candidate on the Republican side who did not appeal in a recent poll. Although his campaign continues, at this point there is little reason to believe that he will achieve the nomination against the well known candidates at the top of the field. Seriously raising the question of controlling costs for prescription drugs could, however, get him some attention.