USPTO-FDA Study Debunks Critics and Demonstrates the Importance of Protecting IP

Intellectual property (IP) rights drive innovation, and nowhere is that made more abundantly clear than in the pharmaceutical industry. Over the years, the U.S. has become the global leader in new drug research and development leading to new cures for once considered deadly diseases.

Yet, there continue to be ongoing efforts to diminish the IP rights of drug manufacturers despite the high costs to bring a new drug to the market. According to JAMA, the cost to bring a new drug to market ranges from $314 million to $4.46 billion based on various uses and modeling assumptions. So far in 2024, 29 new drug therapies have been approved by the Food and Drug Administration (FDA). These include medications to treat illnesses and diseases like urinary tract infections; unresectable or metastatic esophageal squamous cell carcinoma; hypertension; Duchenne muscular dystrophy; anemia from chronic kidney disease; bladder cancer; infections; lung cancer; and Alzheimer's disease to name a few.

Efforts to undermine drug patents have been ongoing with proposed regulations and legislation seeking to restrict patent protections based on false allegations of "evergreening" and "thickets." Some members of Congress have demanded compulsory licensing of patents for drugs, and federal agencies are moving forward to pursue a "whole-of-government" approach in reviewing march-in rights under the Bayh-Dole Act. Even the heavy-handed so-called "Inflation Reduction Act" (IRA) had an adverse impact on new drug development by redirecting research and development dollars toward price reductions of existing medications.

Citizens Against Government Waste has long raised the alarm about the adverse impact a reduction in IP rights in the pharmaceutical industry would have on the development of new cures for deadly diseases. In response to Sen. Thom Tilles's (R-N.C.) letters on January 1, 2022, and April 1, 2022, to the U.S. Patent and Trademark Office (USPTO) and the Food and Drug Administration (FDA) regarding claims that patent protections are a cause of high drug prices and requesting the agencies to use accurate and transparent data to conduct an independent assessment of patent-based solutions to drug pricing, the USPTO released a "Drug Patent and Exclusivity Study" on June 7, 2024. The report reaffirms the critical importance of IP and debunks the theories that "patent thickening" or "evergreening" cause higher drug prices.

The report reviewed 25 New Drug Applications (NDA) listed in the Orange Book between 2005 and 2018 and concluded that reviewing "raw numbers of patents and exclusivities is an imprecise way to measure the intellectual property landscape of a drug product because not every patent or exclusivity has the same scope." The study stated that "pharmaceutical market exclusivity from the time of NDA approval to the launch of a first generic competitor is influenced by a complex interplay of patent law and FDA statutes and regulations. In some cases, however, the timing of the entry of generic products is not fully reflected by a computation of patents and exclusivities and competition could be affected by other factors." The report should shut down false claims and unproven theories by proponents of patent thickening and evergreening, but those who do not believe in or understand the importance of IP rights to American innovation and global economic leadership seem to be persistent regardless of how much proof there is contrary to their views.

The USPTO and FDA's independent assessment of the effect pharmaceutical patents have on drug pricing is an important step forward to understanding drug costs and the critical importance of protecting IP rights in the biopharmaceutical industry. Innovation and competition lower costs, and continued efforts to undermine IP rights will hurt patients by stifling the research and development of new life-saving drugs.

• IP Rights
• Healthcare
• drugs
• Pharmaceuticals
• research and development