Patents, Data Exclusivity, and the Development of New Drugs

Abstract

Pharmaceutical firms typically enjoy market exclusivity for new drugs from concurrent protection of the underlying invention (through patents) and the clinical trials data submitted for market approval (through data exclusivity). Patent invalidation during drug development renders data exclusivity the sole source of protection and shifts the period of market exclusivity at the project level. In instrumental variables regressions we quantify the effect of a one-year reduction in expected market exclusivity on the likelihood of drug commercialization. The effect is largely driven by patent invalidations early in the drug development process and by the responses of large originators. We hereby provide first estimates of the responsiveness of R&D investments to market exclusivity expectations.

High Risk, Low Return (and Vice Versa): The Effect of Product Innovation on Firm Performance in a Transition Economy

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“…In order to extend patent terms, the companies can apply for new formulations, new routes of administration, new uses of the drug among other strategies. (237,238) This is very important when considering drug repurposing, once those strategies can make it harder to patent a new method of use for the drug, compromising the legal rights of the new repurposed indication. As a consequence, the expected profit associated with repurposing can be severely affected.…”

IP-Based Incentives Against Antimicrobial Crisis: A European Perspective

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