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Patent Term Extensions Will Help Speed up Development of Coronavirus Drugs
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Patent Term Extensions Will Help Speed up Development of Coronavirus Drugs

Adam Mossoff

The coronavirus is now officially a worldwide pandemic. There are no vaccines or antiviral treatments yet. Biotech companies are racing to develop these vital drugs at record speed with massive investments of time and money.

Presidential candidate Bernie Sanders has declared that “Once a vaccine for coronavirus is developed, it should be free.” There is only one way the government can do this: Mandated price controls. Many politicians want to impose price controls on all drugs, not just for a vaccine for the new coronavirus.

Price controls will dash the hopes of patients seeking a vaccine for the coronavirus or for any other drugs for life-threatening conditions like cancer or diabetes.

Research and development of new drugs is extremely risky and expensive. When a single drug is approved for use by patients by the Food & Drug Administration (FDA), there were on average 5,000-10,000 potential drugs that were first investigated and were unsuccessful.

It takes an average of 10-15 years of R&D before the FDA approves groundbreaking drugs treating hepatitis, cancers and other diseases. These decades-long efforts and the high ratio of failures to successes are expensive. Economists at Tufts University estimate that the cost of R&D for each new drug that makes it through the FDA’s regulatory review process is $2.6 billion.

Price controls would bring these R&D efforts to a screeching halt. No one will invest billions of dollars and millions of hours of labors if they cannot expect to be able to recoup their investment.

This is why the patent system is essential to new drug development. It promises legal security in the fruits of productive labors of scientists and researchers — a patent that lasts for 20 years. Companies have a 20-year period of exclusivity in selling drugs to patients that makes it possible for them to recoup their billions in R&D investments and fund more research.

From the birth of the modern pharmaceutical industry in the early 20th century, the U.S. patent system incentivized R&D in new drugs and medical treatments. Our scientists have led the world in creating breakthrough medical treatments. The vaccines and drug treatments they created improved the quality of life and extended lifespans for billions of people around the world.

Instead of imposing more price controls and regulatory burdens, lawmakers should be bolstering legal protection for innovations in life-saving medical treatments and cures. They should reform the patent laws to ensure investments continue in creating new cures. There is an easy legislative fix Congress can adopt to provide more effective protection for lifesaving health care innovations like a vaccine for the coronavirus.

Pharmaceutical companies file their patent applications as soon as a new drug is discovered, because under U.S. patent law, whoever first files a patent application has priority over other inventors. It then takes years to receive regulatory approval from the FDA. For breakthrough drugs for cancer and many other life-threatening diseases, companies lose 10-15 years — more than half of their 20-year patent term — just navigating the regulatory approval process.

In 1984, Congress recognized the problem and enacted a law providing minimal patent term extensions for drugs that suffer these market delays due to the regulatory review process at the FDA. But these extensions no longer work as Congress intended in 1984.

The reason is that Congress unintentionally gutted this legislation in 1993. It enacted a new law to harmonize U.S. patent law with other countries. It changed the starting point of the 20-year patent term from the date the patent issues to the date of filing of the patent application.

In the ensuing decades, the length of time of the FDA’s regulatory review process has increased substantially. The extension in the patent term provided under the 1984 law is now a very small portion of the actual time under the patent term lost to the regulatory review process.

Researchers have confirmed that this regulatory delay and the resulting loss of patent protection undermines the incentives the patent system provides to invest in breakthrough medical treatments. Economists at the University of Chicago and MIT have also confirmed that regulatory delays are undermining investments in important cancer research.

Congress can easily fix this mistake in innovation policy. It can enact legislation that reverses the changes made in 1993 and increases the patent term extensions. Instead of attacking patents, Congress should pass legislation providing more protections. It is an easy fix that will save countless more lives from cancer, diabetes, and viruses like the coronavirus.

Read in the Washington Times.

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