Pharma – Page 3 – UA LAW IP

scientist looking through a microscope In their new paper, Evergreening of Pharmaceutical Exclusivity: Sorting Fact from Misunderstanding and Fiction, Professors Kristina Acri née Lybecker and Mark Schultz, along with CPIP John F. Witherspoon Legal Fellow David Lund, analyze how the term “evergreening” is used in the context of pharmaceuticals.

After sorting through the vagaries and rhetorical excesses that restrict meaningful discussion, they identify seven categories that capture typical uses of the term:

The assertion that the duration of existing patents can generally be “renewed” or “extended,” for very long or indefinite periods;
Obtaining additional patents related to a particular pharmaceutical or treatment;
The use of laws that allow patent owners to restore some portion of their term lost due to governmental delays;
The use of laws that give companies a limited term of exclusive time to market a drug;
Regulatory barriers that frustrate potential generic competitors’ ability to enter a market;
Business practices that largely rely on marketing to advantage innovators; and
Settling lawsuits with generic manufacturers that seek to invalidate a patent.

In addition to identifying practices claimed to be “evergreening,” this paper also discusses the impact and value of these practices. For most situations, the practices reflect specific policies that are having their desired effect, such as the increase in studies of drug safety and efficacy in children brought about by pediatric exclusivity. In some cases, the practices are simply legal impossibilities. Only in a few specific situations related to regulatory requirements do the authors observe strategic opportunities that could plausibly be considered problematic.

Because of the number of practices and the diversity of value those practices bring to pharmaceutical commercialization, the term obscures far more than it illuminates. Discussions about patents, exclusivities, and public health would benefit greatly from discussing the practices and policies specifically, rather than attempting to use a nebulous term such as “evergreening.”

The paper, which started as part of Professor Acri’s work through CPIP’s Thomas Edison Innovation Fellowship, can be found here. The abstract is copied below.

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Evergreening of Pharmaceutical Exclusivity: Sorting Fact from Misunderstanding and Fiction

Abstract

When people use the term “evergreening” to describe pharmaceutical industry practices, they typically display an unwarranted confidence that they know exactly what they mean both descriptively and normatively. However, a consistent and coherent definition of “evergreening” does not appear to exist.

This article surveys legal, academic, trade, and popular sources that use the term “evergreening” to develop a taxonomy of the policies and actions to which the term is applied. We find that the term is used to cover roughly seven categories of circumstances. Our review finds that the use of the term, taken as a whole, is more typified by the diversity of practices to which it applies rather than any consistent meaning. There are some commonalties, but they exist mostly at a general level.

We then analyze these seven categories to determine if the rhetoric matches the reality. Evergreening is most frequently used as a pejorative term, with a common implication that the “evergreener” is engaged in some sort of strategic behavior at least, or perhaps an immoral if not illegal practice. However, the categorical application of a pejorative term such as “evergreening” to any of the general policies and types of actions we examine is unwarranted and inappropriate. Proponents often apply the term to ordinary use of legal rights as they were designed and the concept makes no meaningful distinction between beneficial and problematic actions.

Unfortunately, “Evergreening” is a key concept in health policy that obscures far more than it illuminates. Once the term is stripped of misunderstandings and loose rhetoric, little of value remains. This is not to say that all policies and actions that extend or preserve exclusive rights are prudent or defensible in individual cases. Rather, the discussion regarding patents and public health would gain much clarity and rationality from addressing the disparate things labeled as “evergreening” on their individual merits.

To read the paper, please click here.

scientist looking through a microscope The hardest things are often the most important things. That’s one of the implicit justifications for the intellectual property system. If we want people to do the hard and important work of researching, developing, and commercializing game-changing innovations, then we need to secure the fruits of their labor with property rights.

In her forthcoming paper, The Drug Innovation Paradox,[1] Professor Erika Lietzan of the University of Missouri School of Law gives reason to question whether our IP and regulatory system is properly encouraging pharmaceutical innovators to work on the most important, and hardest, questions.

This paper, produced while Prof. Lietzan was a CPIP Edison Innovation Fellow, considers a paradox. Some of the biggest health challenges, the most important things, are indeed the hardest things. Therapies for diseases such as multiple sclerosis and Alzheimer’s demand research, development, and testing that takes longer. Unfortunately, the longer something takes to develop, the shorter the term of exclusivity under the IP system, and thus the less secure the investment.

The drug innovation paradox is that the hardest and most important cures are often the ones most poorly supported by our IP system.

Combining several different data sources for the first time, Prof. Lietzan presents comprehensive statistical findings that bring the extent of the drug innovation paradox into focus. The implications for innovation policy are profound, especially if we wish to see groundbreaking new therapies that are inherently more difficult to develop.

Incentives are particularly important in the pharmaceutical industry, where the average cost of developing an approved new medicine is over two billion dollars.[2] Drugmakers would hardly invest so much without the promise of exclusivity once the medicine goes to market. However, the period of exclusivity—the incentive—we give to drugmakers depends upon how long it takes them to bring a new medicine to the market. The more time they spend on developing a new medicine, the less reward they receive for their troubles by way of a shorter patent term.

In the United States, it takes 3.5 years on average for a patent to issue, and in many industries, patent owners thus might expect to enjoy around 16.5 years of clear market exclusivity.[3] However, things are very different in the pharmaceutical industry, where the safety and efficacy of a new drug has to be proven before it can be marketed. Years of preclinical testing and clinical trials run down the patent term clock while a drugmaker awaits approval. Congress has instituted measures to restore a portion of the time lost, but the fact remains that longer development programs result in shorter periods of exclusivity.

Pouring over the data going back to 1984, Prof. Lietzan examines the variables that play a role in perpetuating the drug innovation paradox. Critically, she notes that many of the factors that consistently lead to longer development programs—including the drug, disease, and endpoints to be met—are simply beyond a drugmaker’s control. Of course, it is impossible to say for certain what drugs were never invented because the incentives were not there. But the data does give us an accurate sense of how many years spent in development are lost when the patent expires.

For example, Prof. Lietzan breaks down the data with respect to the category of therapy being developed. As the following figure shows, the average length of the clinical testing period for some therapeutic categories ranges from about 3 to 9 years:

It is important to note that this lengthy testing period represents only one part of a development program, and the preclinical testing period has to be taken into account as well. Prof. Lietzan estimates that the average preclinical testing period for new drugs is 5.61 years. It is easy to see how the majority of the patent term for drugs that fall into certain therapeutic categories may be gone before the drug even enters the market.

The danger of the drug innovation paradox is that we may be under-incentivizing pharmaceutical research and development for drugs that are inherently more difficult to develop. The next great breakthrough treatment for difficult-to-treat diseases like cancer or multiple sclerosis may never be developed unless the incentives are there to reward drugmakers for taking the risk to develop the treatments in the first place. The data collected by Prof. Lietzan shows us just how time-consuming these endeavors can be, and they suggest that we should break the paradox if we hope to have even greater drug innovation.

CPIP is pleased to once again have Prof. Lietzan as a CPIP Edison Innovation Fellow for 2017 – 2018. We look forward to supporting more of her groundbreaking work on this difficult, but absolutely important, issue.

[1] Erika F. Lietzan, The Drug Innovation Paradox, 83 Mo. L. Rev. ___ (2018), available at https://papers.ssrn.com/abstract_id=2948604.

[2] See Joseph A. DiMasi et al., Innovation in the Pharmaceutical Industry: New Estimates of R&D Costs, 47 J. Health Econ. 20 (2016) (estimating average total pre-approval cost of approved new compound at $2.558 billion in 2013 dollars), available at https://www.ncbi.nlm.nih.gov/pubmed/26928437.

[3] See Mark Schultz & Kevin Madigan, The Long Wait for Innovation: The Global Patent Pendency Problem (Ctr. for the Prot. of Intell. Prop. Oct. 2016), available at http://sls.gmu.edu/cpip/wp-content/uploads/sites/31/2016/10/Schultz-Madigan-The-Long-Wait-for-Innovation-The-Global-Patent-Pendency-Problem.pdf.

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