The Trials and Tribulations of Pharmaceutical IP Management
The pharmaceutical industry relies on innovation to develop new medical treatments, but bringing a product to market is high risk and high cost. It can take decades to develop a new medicine and cost hundreds of millions of dollars. What role will IP management play in protecting pharmaceutical companies in the future?
Protecting the Process
IP rights protect the extensive investment in research and clinical testing that must take place before a new product can enter the market. It can take 10 — 15 years to develop a new medicine — from the earliest stages of compound discovery until its approval for use by the public. The cost of developing a new medicine is also expensive — $2,558 million according to analysis conducted by the Tufts Centre for the Study of Drug Development.
Capital invested in the pharmaceutical industry is almost all directed to clinical research and drug trials, rather than the manufacture of the final product. Copycats can replicate the manufacturing process for a new drug at a fraction of the cost. The threat of plummeting sales at the end of a long product lifecycle can be enough to discourage pharmaceutical companies from investing in R&D in the future.
The pharmaceutical industry relies on innovation to develop new medical treatments. By patenting IP, pharmaceutical companies can protect against low-cost reproduction of clinical research that undermines the work of IP owners and the substantial contributions of investors.
Finding a Place in the Market
Patents help pharmaceutical companies secure market exclusivity and create more opportunities for return on investment. However, the fight for market exclusivity has led to a number of patent challenges.
In 2015 global pharmaceutical company Novartis AG lost a patent fight with Torrent Pharmaceuticals over its blockbuster multiple sclerosis drug Gilenya. With $2.5 billion annual sales in 2014, Gilenya is the highest revenue generating drug for Novartis worldwide and contributes significant value to its IP portfolio. However, the US Patent and Trademark Office (USPTO) concluded that certain claims made by Novartis were “obvious” and did not merit patent protection. The first series of Gilenya patents will begin to expire in the US in 2019, leaving the market open for competitors and cheaper drugs.
Patent disputes following copycat activity is an active threat and pharmaceutical companies aim to obtain patents for the entire lifecycle of a drug including methods of manufacture and active ingredients, to minimize the likelihood of disputes.