Patent protection in the pharmaceutical industry is different from protection in other sectors.
The pharmaceutical industry relies on innovation to develop new medical treatments, but bringing a product to market is high risk and high cost. It can take between 10 and 15 years to develop a new medicine and according to a new study by the Tufts Center for the Study of Drug Development, can cost as much as $2.56 billion.
Once a new product has been developed, protecting intellectual property (IP) can also be costly. Every industry needs to evolve individual IP policies, management style and strategies, but patents and trademarks are critical for the pharmaceutical industry in particular.
Patents help to protect companies from IP infringement and copycats looking to reproduce generic products at a low cost and high volume.
Unique Challenges with Pharma IP — How to Protect
The pharmaceutical industry is unique in that, while it can cost almost nothing to manufacture a drug, it costs millions to create it. For this reason, patent protection in the pharmaceutical industry is different from protection in other sectors.
The high cost associated with R&D means the majority of pharmaceutical companies apply for patent protection during research stages and before clinical trials. This can reduce the effective patent life for medicines to an average of just 11.5 years.
Early patenting not only reduces the patent life of a product when it reaches the market, but shortens the time available for marketing a new drug. Pharmaceutical companies need to protect ideas quickly. They rely on a logical, flexible, IP strategy as early as possible in the R&D process. “Methods of use” and “Formulation” patents can be filed later — at the clinical trial stage of drug development and when the products use is properly defined.
The issue of reduced patent life has been addressed in legislation in the United States, where patent applicants can now apply for a term extension. However, the time periods permitted for such extensions do not equate to the time lost. In the U.S., patents are only extended for half the time period that was consumed by the regulatory approval process.
Trade secrets are becoming an increasingly useful tool for pharma, particularly in the U.S. where recent changes to guidelines for examination at the U.S. Patent and Trademark Office have applied severe limitations on the patentability of natural products and methods using laws of nature.
While patent protection in many territories is limited to 20 years from the date of filing, the period of protection conferred by a trade secret can be indefinite. Trade secrets entail significant risk but can speed up the process of drug development.
Trends: The Emergence of Biotechnology
Pharma IP can be challenging but it has not stopped innovation developing at an extremely fast pace. Over the last century technology has played an increasingly important role in driving pharmaceutical innovation.
Biotechnology is a collaboration of traditional bioscience processes and modern technology and it is spearheading the development of targeted treatments. As these two industries come together, healthcare could be transformed.
The increase in the aging population, and the need for better technologies to diagnose and monitor the progression of human diseases is driving innovation in the wearable technology market sector and personalized medical devices.
For example, Israel-based Teva Pharmaceuticals, the world’s largest generic drug manufacturer, is partnering with chip-making giant Intel to create a wearable device that tracks the progress of Huntington’s disease. Progression of the disease is different for each individual, but wearable technology can track the stages of deterioration and inform treatment.
HabitAware is a smart wearable bracelet dedicated to controlling Obsessive Compulsive (OCD). OCD can be felt with varying levels of intensity and cover a number of different behaviours. The wearable monitors movement and sends a subtle alert if a person shows signs of doing something compulsive.
Trends: Will 3D Printing Revolutionize the Pharmaceutical Industry?
Technology has the potential to improve a pharmaceutical company’s internal R&D processes and reduce operating costs.
For example, drug R&D can be drastically improved by 3D printing. The technology could be used to print pills or even human organs and tissue. This would allow companies to test drugs cheaply — without compromising safety or ethical standards.
According to a new report from IMS Institute for Healthcare Informatics, the largest global pharmaceutical companies need to reduce their combined operating costs by $36 billion before 2017 to maintain operating margins and current levels of R&D. As a result of improved target selection, preclinical tests, clinical trials, chemical synthesis, and product management, research becomes more efficient.
Using 3D printing for medical applications could help with commercializing medical developments. Dental implants have already been commercially successful: it is predicted almost 50,000 custom-fit Invisalign braces are printed each day.
Organovo also is using 3D printing technology to create functional, three-dimensional tissues that can be implanted or delivered into the human body to repair or replace damaged or diseased tissues. According to research from Markets and Markets, using 3D printing for medical applications could have a market value of $2.13 billion by 2020.
The Future of Pharmaceutical IP
With a history of high cost R&D and high-risk IP strategies, pharmaceutical companies were forced to battle copycats and settle for reduced periods of patent protection. This impacted the motivation — and investment — that is necessary for pharmaceutical innovation.
The emergence of biotechnology has revitalized the pharmaceutical industry and fuelled innovation in technology that could significantly alter the effects of diseases in the future.
(Simon Webster joined CPA Global in March 2000 and named to the Executive Board in 2003. He was appointed Chief Executive Officer in October 2015.)