infoJustice

Author: Charles Duan

Abstract: Administrative patent challenge proceedings, the most prominent form of which is inter partes review, have attracted much controversy. In particular, the pharmaceutical industry and its supporters have criticized the proceedings as unfairly biased toward canceling valuable drug patents. Yet there has been little empirical study of the impact of these administrative proceedings on drug patents or pharmaceutical markets.

In this Article, I review the universe of administrative challenges on drug patents that have proceeded through appeal to the Federal Circuit. I find that a large fraction of patents challenged this way are deemed unpatentable at both the agency and appellate levels, and that administrative cancellation of drug patents correlates closely with subsequent generic drug competition and reduced drug prices. The data suggests that these effects are not due to bias against patents, but rather because of the expertise of administrative adjudicators and the remarkably low quality of the drug patents challenged. Indeed, I find that nuanced aspects of these administrative proceedings, particularly at the appellate level, in fact are biased in the opposite direction — against patent challengers. These findings suggest that inter partes review and other administrative challenge proceedings likely serve an important purpose for lowering the costs of medicines, and those proceedings could potentially be improved.

Citation: Duan, Charles, On the Appeal of Drug Patent Challenges (March 31, 2023). American University Law Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4406404 or http://dx.doi.org/10.2139/ssrn.4406404