by Brian Malkin
On January 23, The Wall Street Journal published a debate whether innovation would be sparked in the pharmaceutical industry by a further form of patent term extension. While it is clear that patent protection is key for innovators to protect their blockbuster products from generic competition, it is not so clear whether extending patent protection for this class of products drives or hinders innovation.
Josh Bloom, Director of Chemical and Pharmaceutical Sciences at the American Council on Science and Health, a health-care education and advocacy group based in New York, took the position that the pharmaceutical industry needs more and longer patent term protection to help support basic research and development that produces needed breakthrough products. According to Bloom, there are "far fewer" scientists engaged in pharmaceutical research than there were 10 years ago, in part because longer development times have translated to less time left on patents following new product approvals. Bloom describes this as an approaching "financial crisis" or "patent cliff" where a series of patents will soon expire for some of the most profitable innovator drugs, translating to lost profits on branded products approaching an estimated $160 billion in 2015.
Unlike the "steady stream of blockbuster drugs" in the 1990s, Bloom observes, newer products that treat more complicated diseases have required more clinical studies with more subjects, adding costs and extending development times. Extending the patents on current blockbusters would postpone the patent cliff and provide additional research time for more innovative products, Bloom speculates. Generic drugs, Bloom says, "contribute nothing to innovation. . . . [y]et they take up to 90% of sales away from the comparable brand-name drugs." But Bloom wants to discourage pharmaceutical companies from merely developing line extensions for current therapies and would propose that new products receive five year extensions, whereas patents for line extensions would only receive three years of extension.