Patents and Drugs: Is the Present System Working?

The pharmaceutical industry is frequently singled out as the prime example of a successful U.S. patent system. But Benjamin Roin, a junior faculty member at Harvard Law School, argues a different view. To his way of thinking, the most basic standards of patent law -- that inventions can only be patented if the are novel and non-obvious -- undermine the development of new drugs. This is because much or most of the cost of producing a new pharmaceutical product derives from a long and costly regulatory process: series of clinical trials demanded by the U.S. Food and Drug Administration (FDA). Without FDA approval, a new drug is not eligible for marketing. So, unlike other industries in which novelty and non-obviousness make sense, in drug development such requirements "bear little relationship to the social value of those drugs or the need for a patent to motivate their development."

If, for example, academic scientists publish their research findings about a compound, it may be considered no longer novel, whether or not the scientists had any idea how it could be used as a drug. Without a strong patent, manufacturers are reluctant to invest hundreds of millions in clinical studies, knowing that a generic company could duplicate their product as soon as it was proven successful. "Congress can easily avoid this problem," writes Roin, "by ensuring that the successful completion of the FDA's rigorous clinical trial process is rewarded with a lengthy exclusivity period enforced by the FDA."

His argument, that the way to address inadequacies in the patent system with respect to drugs is not to rewrite intellectual property law, but rather for Congress to change FDA regulation to provide longer periods of data exclusivity, commensurate with the cost of complying with the regulatory process, is suggestive for the issue of follow-on biologics.

To read Roin's paper, click here.

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