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Patent challenges reduce pharmaceutical innovation and productivity, researchers suggest
Date:10/15/2009

brand-name products. These suits nearly tripled from 2002-2003 and doubled from 2006-2007.

"A Paragraph IV lawsuit will likely cost a generic manufacturer $5 to $10 million, compared to at least $800 million required for a brand company to develop a drug and bring it to market," said Graham, who is also a licensed attorney. "And the reward for being the first successful Paragraph IV challenger is substantial -- 180 days during which no other generic-producing company may enter the market and an average potential payoff during those 180 days alone of $60 million. The law is creating incentives to bring challenges on more and different types of drugs."

As the number of patent challenges has increased, the number of new compounds approved annually by the U.S. Food and Drug Administration (FDA) has fallen from an average of 35 in 1996-2001 to 20 in 2002-2007. Without policy intervention, the effective life of key patents will continue to decline, which will further compress the payback period during which brand-name firms can recoup research and development investments, according to the researchers.

"Lawmakers should consider increasing the length of time brand-name drugs are on the market before generic drugs can enter, because the current five-year period is typically insufficient to recoup research and development costs," added Higgins.

Graham and Higgins suggest that exclusivity be extended for first-in-class and high-risk, high-necessity drugs, such as a preventive medicine for Alzheimer's disease or osteoarthritis. In addition, they propose that policy-makers use incentives to encourage private investments in research to complement public research or offer increased exclusivity to curative and preventive drugs. Auctions could allow companies to bid on specific research projects in return for extended data or market exclusivity.

A 2007 report from The National Academies recommended that the United States should at
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Contact: Abby Vogel
avogel@gatech.edu
404-385-3364
Georgia Institute of Technology Research News
Source:Eurekalert  

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