Emissary patents won’t drive down drug prices

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In their quest to drive down drug prices, some US leaders have identified a convenient scapegoat: patents.

Over the past few months, the commissioner of the Food and Drug Administration has sent letters to the director of the Patent and Trademark Office, asking about ‘abuses’ in the intellectual property system to ‘protect against’ issuing patents for “incremental” modifications to existing drugs.

And last summer, 100 lawmakers sent a letter urging the Secretary of Health and Human Services to “use administrative authorities” to overturn patents on certain brand-name drugs to speed up the introduction of generics and biosimilars. .

Robust IP system improves access

All of these efforts are based on the mistaken premise that patents impede access to medicines and thereby harm patients. But the reverse is true: innovation cannot happen without a strong and reliable intellectual property system.

Strong intellectual property protections have made the United States the world leader in biopharmaceutical innovation and ensured unparalleled access to new drugs. Far from dismantling drug patents, we should strive to bring more of their benefits to other sectors of the economy.

Patents, like other types of intellectual property, give creators a limited period of time in which to exclusively sell their inventions, after which the copied products can enter the market. This arrangement, enshrined in the Constitution and refined over time, balances two competing interests: it incentivizes inventors with the possibility of a reward and protects consumers by ensuring that the period of exclusivity is limited.

Over the years, our system has spurred notable growth in biopharmaceuticals, where the investment and risk required to create a new product is enormous. US pharmaceutical companies currently spend about $100 billion a year on research and development, about 10 times what the industry spent in the 1980s. Over the same period, FDA approvals for new drugs have increased fivefold. , rising from about 10 per year to 50 in 2021.

Strong protections drive innovation

But the industry could not have increased its production of new treatments and vaccines so dramatically without strong patent protections. It costs more than $2 billion on average to bring a new drug to market, and it can take decades.

Less than 12% of drug candidates that enter clinical trials ultimately gain FDA approval. Companies will only take this risk if they know that they can profit from the intellectual property rights on successful discoveries.

Thanks to the historically strong US patent system, two-thirds of all new drugs approved over the past decade come from US labs, including many life-changing medical breakthroughs. Today, people living with HIV can manage their condition with just one pill a day. Doctors can cure hepatitis C, the main cause of liver cancer. And we have Covid-19 vaccines based on breakthrough mRNA technology.

The United States has led the development of all of these treatments, among many others. And while only about half of newly introduced drugs are available in countries like Canada, France and Japan, the figure is almost 90% in the United States.

Perhaps the most fallacious claim of the anti-patent brigade is that intellectual property protections hinder access to affordable medicines. In the United States today, about nine out of 10 prescriptions are filled with generic drugs. There is not much room left in the drug market – if generic penetration approached 100%, there would be virtually no new drugs left.

Notably, the United States has the highest generic penetration of any OECD country within the Organization for Economic Co-operation and Development. On average, generics fill only about half of all prescriptions written in OECD countries.

Simply put, our system has served Americans well. It encourages the development of new drugs and ensures that patients can access them.

IP protections help the United States lead the world

Instead of lamenting that success, policymakers should look for ways to replicate it in sectors where U.S. companies have lagged behind their foreign competitors.

The United States is ceding global leadership to China for technologies ranging from 5G and quantum computing to artificial intelligence and clean energy. Yet we cannot expect to develop these industries domestically without strong intellectual property protections to encourage investment in research and development.

The United States leads the world in drug discovery thanks, not despite, to our intellectual property laws. Blaming patents for high drug prices may be politically expedient, but it’s also dangerously dishonest.

This article does not necessarily reflect the views of the Bureau of National Affairs, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Author Information

Andrei Iancu served as Undersecretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office from 2018 to 2021, under President Trump.

David Kapos served as Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office from 2009 to 2013 under President Obama. Both are co-chairs of the board of directors of the new Innovation Promotion Council.

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