An interesting discussion was recently started in the World Trade Organization’s community forum on a complex topic — data protection and pharmaceutical innovation.
Posted by KMLybecker
Generating the data necessary to secure regulatory approval has become more extensive and more expensive. Clinical testing has become more difficult and laborious. These regulations and associated costs play an increasingly important role in the pharmaceuticals and agricultural chemical industries, sectors in which product safety and efficacy are of utmost importance. As such, it is necessary to incentivize data generation by providing protection for the investment in data generation. Regulatory data protection serves to protect originator firms against free riding, and safeguards the substantial financial investment involved in drug discovery and regulatory approval.
Some may argue that pharmaceutical, biotech and agrichemical innovations are already adequately protected by the patent system. This brings an important distinction to light. The evidence required to demonstrate product safety and efficacy is very different from that necessary to establish that an innovation is patentable. Moreover, each process independently requires the investment of significant time and money. Though controversial, recent estimates place the cost of developing a new drug at more than $800 million, of which 60% is incurred in the conduct of clinical trials, most of which are required for regulatory approval. In addition, in the case of pharmaceutical research and development, a significant share of the time and money is spent on work that never yields a patentable product or provides a return on investment.
Further, in the case of some innovations authorized for market it may be the case that no other forms of protection, apart from regulatory data protection, are available. This is particularly true in the case of second generation patents: those for a new formulation, new use of an existing molecule, or a new synthetic process, rather than a new chemical entity. In these cases, patent protection may be weak, impossible to attain or eroded by a long development phase, in which case regulatory data protection may provide the only protection.
Failure to provide protection for such second generation products undermines the innovative process. Such a system would both discourage continued research on existing molecules and encourage work on products that are new, but may not offer any therapeutic advance. Protection would provide firms an incentive to pursue additional uses of an existing product. For example, to a wider population, by age, ethnicity or geography, or in new indications.