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New Bill Destroys Cures Of Tomorrow
Guest Opinion
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Institute For Policy Innovation

Congress is considering a bill to address problems with the patent protections afforded to American drug firms. Though well-intentioned, this bill would hamstring firms’ ability to create new medicines and improve existing drugs.

If you’ve seen CNBC’s “Shark Tank,” you understand the importance of intellectual property protections. When deciding whether to invest in a young company, the business mogul “sharks” often ask whether the entrepreneur has filed for a patent. And they’re impressed when the answer is “yes.”

The reason? Patents are critical for innovation.

Right now, drug manufacturers receive two decades of patent protection on new products. Firms have the exclusive right to create and sell their brand name drug until their patent expires. After that, generic drug firms can develop their own, copycat versions.

But that 20-year clock begins the moment an inventor files for a patent. And at that point in the research process, a medicine is better described as a “hope” than a “product.”

Few potential medicines make it through clinical trials and onto pharmacy shelves. On average, it takes 10 years – and costs billions of dollars – to bring one drug to patients.

The risky nature of this research is why intellectual property protections were included in the Constitution. Who would invest in wildly expensive projects without any ability to profit from the years of hard work?

Importantly, intellectual property protections have empowered drug manufacturers to research cures for more complex diseases, like Alzheimer’s, cancer, and so-called “rare diseases.”

Treating these diseases requires sophisticated drugs, which opens the door to multiple patents. Some patents may come later in the development process, which extends an innovator’s intellectual property protections.

In addition, drug manufacturers frequently offer new-and-improved versions of existing drugs. Technology companies do this all the time – consider the countless versions of Apple’s iPhone on the market.

Seemingly minor changes to drugs can have major benefits for patients. Say a firm discovers a way for a drug to be safely taken just once daily rather than twice. Making it easier for patients to take their medicines would boost drug compliance rates. This change could prevent roughly 10 percent of hospitalizations and save our health care system up to $289 billion annually, according to the Annals of Internal Medicine.

And offering a new-and-improved medicine doesn’t extend the patent life of the original product. It’s open season for competing firms to create and sell a generic version of the original, just not the new version.

Unfortunately, the new bill floating around Washington would discourage companies from improving on their products and investing in the cures of tomorrow.

That’s a shame. The United States currently leads the world in drug innovation. And patients are living longer and healthier lives as a result.

Abuses of the patent system should be addressed when they occur. But tampering with intellectual property protections is the wrong approach.


Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow him on Twitter @MerrillMatthews. The opinions expressed are those of the author and not necessarily those of this paper or its corporate ownership.