European regulatory incentives for common drugs and the power of patents—working together towards innovation, against it or just getting lost in the middle?

Abstract

The idea that patent owners should be granted early exclusionary rights conferring a broad scope of protection stems from the Prospect Theory elaborated by Edward Kitch. 1 Kitch advocated the early grant of patents targeted at the construction of broad patent portfolios in order to give the patent owner sufficient incentives to make further investments and ‘to maximize the value of the patent without fear that the fruits of the investment will produce unpatentable information appropriable by competitors’. 2 This approach would produce an increase in follow-on innovation and product development, tailored to the needs of society. Kitch’s arguments have attracted support and prompted the creation of ad hoc legislation. A prime example is the framework of regulatory incentives designed by the European Commission and disciplined by Directive 2000/83/EC on the Community code relating to medicinal products for human use, as amended. 3 This piece of legislation sought to stimulate innovation and timely patient access to medicines, preserving the stimulus for investments in research in the medical field.