Incentives to promote the US pharmaceutical innovation: empirical research based on the case of Epogen

Abstract

Objective This study aims at emphasizing the significant impact of the incentives to promote the United States (US) pharmaceutical innovation. Methods We carried out a retrospective single-case study. We analyzed the innovation process of Epogen: basic research, applied research, regulatory, and marketing. Results Incentives and policies of pharmaceutical innovation significantly facilitates the entire life cycle of Epogen. The transfer of patent presented by the Bayh-Dole Act allowed Amgen to purchase the research results of Epogen. Relying on the intellectual property mechanisms and financing incentives, Amgen raised the funds needed for Epogen in applied research. Special review shortened the regulatory of Epogen. Epogen obtained orphan drug designation twice and 8 years of market exclusivity. Tax deduction and research funding provided direct economic compensation. The patent system enabled Epogen to obtain 32 years of patent protection (1983–2015). Monopoly pricing was a significant determinant to increase the sales of Epogen through pricing strategies. Conclusion We pointed out that Amgen has developed the successful innovation of Epogen taking advantages of the incentives. Effective and flexible incentives and policies are essential to support the entire life cycle of new drugs, ultimately forming a sustainable driver for the long-run pharmaceutical innovation.