Publisher's Synopsis
Intellectual property (IP) rights play an important role in the development and pricing of prescription drugs and biologics. To encourage innovation, IP law grants inventors exclusive rights in a particular invention or product, potentially enabling them to charge higher-thancompetitive prices. IP rights are typically justified as necessary to allow pharmaceutical manufacturers the ability to recoup substantial costs in research and development, including clinical trials and other tests necessary to obtain regulatory approval from the U.S. Food and Drug Administration (FDA). However, IP rights have been criticized as contributing to high prices for pharmaceutical products in the United States by operating to deter or delay competitionfrom generic drug and biosimilar manufacturers.Two main types of IP rights may protect pharmaceutical products: patents and regulatory exclusivities. Patents, which are available for a wide range of technologies beyond pharmaceuticals, are granted by the U.S. Patent and Trademark Office. Patents may claim chemical compounds in the pharmaceutical product, a method of using the product, a method of making or administering the product, or a variety of other patentable inventions relating to a drug or biologic. The holder of a valid patent generally has the exclusive right to make, use, sell, and import the invention for a term lasting approximately 20 years. Pharmaceutical patent disputes are subject to certain specialized procedures under the Hatch-Waxman Act and the Biologics Price Competition and Innovation Act, which can affect when generic and biosimilar manufacturers can market their follow-on products.In addition to patent protection, certain pharmaceuticals, such as innovative products or those that serve particular needs, may qualify for periods of regulatory exclusivity when they are approved or licensed by FDA. Pharmaceutical products may only be sold in the United States after FDA has determined they are safe and effective, based on submitted data, and has approved or licensed them. FDA generally may not accept and/or approve a generic drug or biosimilar if the pharmaceutical product being used as a reference to show the follow-on product is safe and effective is covered by an unexpired regulatoryexclusivity. Regulatory exclusivities vary in length from six months to 12 years, depending on the basis for the exclusivity.In recent years, some Members of Congress have introduced bills to address these and other IP-related issues that someperceive as contributing to high pharmaceutical prices.