NIHCM Foundation questions patent laws

October 1, 2000

Pharmaceutical Representative

Federal intellectual property protection laws have significantly delayed the entry of some generic drugs into the U.S. market, forcing consumers to incur billions of dollars in prescription drug costs that they otherwise might not have paid, according to an analysis released by the Washington-based National Institute for Health Care Management Foundation.

Federal intellectual property protection laws have significantly delayed the entry of some generic drugs into the U.S. market, forcing consumers to incur billions of dollars in prescription drug costs that they otherwise might not have paid, according to an analysis released by the Washington-based National Institute for Health Care Management Foundation.

The analysis examined six laws adopted from 1983 to 1997 that have been drivers in the area of intellectual property protection, particularly the Waxman-Hatch Act of 1984.

"Considered individually, each of the laws offers a reasonable approach to stimulate innovation and ensure broad access to new prescription drugs. Viewed collectively, the laws have conferred multiple and additive protection on prescription drugs," the analysis stated.

According to the study, the laws addressed in the analysis have either strengthened the patent protection enjoyed by brand-name drugs, allowed for extensions of a drug's exclusivity in the market, or facilitated the transfer of federal inventions to pharmaceutical companies. While each law was intended to provide incentives for innovation and research, collectively their effect appears primarily to enable the industry to extend the lucrative franchises for top-selling drugs.

The analysis also found that only 36% of new drug applications approved by the Food and Drug Administration during the past decade were for new compounds never sold on the U.S. market. The majority (60%) of approved new drug applications were for drugs whose active ingredient was already on the market. This includes new dosages (45%), new combinations (5%), or new manufacturers (10%) of ingredients already available.

A 'misleading,' 'inaccurate' study

The Pharmaceutical Research and Manufacturers of America, Washington, said the NIHCM's findings were an attempt by the sponsors to reduce patent terms for medicines so that they can save money for themselves.

PhRMA President Alan F. Holmer said the NIHCM report overlooked a recent survey by Standard and Poor's that found that 150 prescription drugs with $50 billion in annual sales will go off-patent in the next five years, giving unprecedented opportunities to generic drug manufacturers and offering even greater choice to consumers.

Holmer pointed out that a recent study by key researchers at Tufts Center for the Study of Drug Development reported that the average patent life for a prescription medicine approved from 1993 to 1995 was only 11.2 years, compared with 18.5 years for most other products.

"This is ironic since the public health depends, in large part, on drug innovation. It means that pharmaceutical companies have less time than other industries to recoup their huge research and development costs – an average of $500 million per drug," Holmer said.

"Without innovative medicines to copy, the generic industry wouldn't exist," added Holmer. "And, without patents, biomedical innovation to help and heal patients would dramatically decline. The NIHCM report conveniently ignores these key facts." PR

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