Strong patent protection for pharmaceuticals drives medical progress by providing economic incentives for innovation. Patents provide the patent owner with the legal means to prevent others from making, using, or selling the new invention for a limited period of time, subject to a number of exceptions. Patents only gives an inventor the right to prevent others from using the patented invention. A patent says nothing about whether the product is safe for consumers and whether it can be supplied. Patented pharmaceuticals still have to go through rigorous testing and approval before they can be put on the market.
High Cost of Drug Development
The underlying reason why pharmaceutical progress is dependent on intellectual property protection is the high cost of drug development. Although a pharmaceutical invention costs a great deal to discover and develop it can be copied or reverse-engineered very inexpensively, at a small fraction of the innovator’s research and development costs. Without strong patent protection, pharmaceutical companies could not attract the investment needed to conduct this expensive, high-risk research.
American Pharmaceutical Policy
American pharmaceutical policy has increasingly favored the interests of the patent holder. The United States has labored to discourage foreign governments from infringing pharmaceutical patents and buying unauthorized generics from foreign countries. When necessary, the United States has used trade barriers and various other types of political pressure to keep non-compliant governments in line.
25-Year Patent Protection
The prior 15-year patent regimes were replaced with 20-year product patents in the early 1990s. The 20-year protection can be increased by up to five additional years through a Supplementary Protection Certificate (SPC). SPCs were introduced in 1992 to compensate originator companies for the time and cost of developing registration data. In addition to the 25-year protection, further patents for varying periods are regularly granted to pharmaceutical companies for new uses, indications, and dosages as well as changes in formulation, color, or markings.
Strategic Patenting
Patents do not protect medicines; they protect inventions. The invention may relate to a product, a process, a medical indication, or a combination of products. As a consequence, a single medicine can be protected by a large number of separate patents, each relating to a different invention. Pharmaceutical originators may practice strategic patenting by creating a barrier of entry for competitors by filing several patent applications on many different related items. As many patents as possible are sought during the development and marketing cycle, and they are extended for new uses of established products.
Risk of Infringement
The complex science and the extent of coverage of pharmaceutical patents introduces considerable risk of infringement into product development. The business risk of infringement arises in any drug or medical device development. For generics, it arises particularly because a generic medicine is defined as being identical to a branded drug in terms of active principle, and having the same pharmaceutical form, safety level, and therapeutic effect.
Trade Related Agreement on Intellectual Property Rights
The World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) attempts to strike a balance between the long term social objective of providing incentives for future inventions and creation and the short term objective of allowing people to use existing inventions and creations. The TRIPS Agreement is an agreement between WTO Member States. It requires WTO Member States to enact or modify their own patent legislation to regulate the granting and enforcement of patents in accordance with some minimum international rules that it defines. The agreement covers a wide range of subjects, including patents for pharmaceuticals. If a government needs or wants to exploit a patented invention, it must ask the patent holder for authorization and offer “reasonable compensation” for the privilege.
WTO members have to provide patent protection for any invention, whether a product or a process, while allowing certain exceptions. Patent protection has to last at least 20 years from the date the patent application was filed. Members cannot discriminate between different fields of technology in their patent regimes. Nor can they discriminate between the place of invention and whether products are imported or locally produced. To qualify for a patent, an invention has to be new, nonobvious, and useful. Details of the invention have to be described in the application and therefore have to be made public. Member governments have to require the patent holder to disclose specifications of the patented product or process and they may require the patent holder to reveal the best method for carrying it out.
Governments can refuse to grant patents in the following three areas that may relate to public health:
1. inventions whose commercial exploitation needs to be prevented to protect human, animal or plant life or health
2. diagnostic, therapeutic and surgical methods for treating humans or animals
3. certain plant and animal inventions
Legislative Changes
- Providing for extension of the patent term to compensate for delays in securing marketing authority from the U.S. Food and Drug Administration (FDA) to sell new drugs for humans and to make it an act of infringement to apply to the FDA for marketing approval of a patented drug to be effective before the expiration of the patent and to remove from the definition of patent infringement acts relating to the collection of data for use in submissions to the FDA for marketing approval of a drug etc.
- Extension of right to prove prior invention to acts carried out in WTO countries;
- Removal of remedies for infringement of patents for surgical processes; and
- The Intellectual Property Omnibus Reform Act of 1999, which provides for early publication of patent applications in most cases, prior user rights for users of later-patented business methods, extension of the terms of patents that would otherwise have terms of less than 17 years notwithstanding the applicant’s diligent attempts to secure early allowance, and an expanded role for third parties in reexamination if they so choose.
Subject Matter of Patent Available For Public Use at End of Patent Term
In keeping with the patent bargain, the subject matter of each patent must become available for public use at the end of the patent term, which according to TRIPS is now 20 years from the filing date of the patent application. If a later patent application tries to re-monopolize the invention as described in an earlier patent, it is to be rejected.
No International Patents
There is no such thing as an international or global patent. When a company is said to have patented a medicine worldwide, it really means that it has a collection of different patents, one for each country or region of interest to it.