Abstract
BackgroundWhile there has been much discussion by policymakers and stakeholders about the effects of “secondary patents” on the pharmaceutical industry, there is no empirical evidence on their prevalence or determinants. Characterizing the landscape of secondary patents is important in light of recent court decisions in the U.S. that may make them more difficult to obtain, and for developing countries considering restrictions on secondary patents.Methodology/Principal FindingsWe read the claims of the 1304 Orange Book listed patents on all new molecular entities approved in the U.S. between 1988 and 2005, and coded the patents as including chemical compound claims (claims covering the active molecule itself) and/or one of several types of secondary claims. We distinguish between patents with any secondary claims, and those with only secondary claims and no chemical compound claims (“independent” secondary patents).We find that secondary claims are common in the pharmaceutical industry. We also show that independent secondary patents tend to be filed and issued later than chemical compound patents, and are also more likely to be filed after the drug is approved. When present, independent formulation patents add an average of 6.5 years of patent life (95% C.I.: 5.9 to 7.3 years), independent method of use patents add 7.4 years (95% C.I.: 6.4 to 8.4 years), and independent patents on polymorphs, isomers, prodrug, ester, and/or salt claims add 6.3 years (95% C.I.: 5.3 to 7.3 years). We also provide evidence that late-filed independent secondary patents are more common for higher sales drugs.Conclusions/SignificancePolicies and court decisions affecting secondary patenting are likely to have a significant impact on the pharmaceutical industry. Secondary patents provide substantial additional patent life in the pharmaceutical industry, at least nominally. Evidence that they are also more common for best-selling drugs is consistent with accounts of active “life cycle management” or “evergreening” of patent portfolios in the industry.
Highlights
Patents play a distinctively important role in the global pharmaceutical industry today
We provide novel data that aims to address the following questions: What is the prevalence of patents with chemical compound claims, patents with secondary claims, and of ‘‘independent’’ secondary patents that have no chemical compound claims? When are chemical compound and independent secondary patents filed, relative to drug approval? What are the effects of these patents on the patent life? And does the prevalence of independent secondary patenting vary with sales?
We here offer an analysis of the role and effect of secondary patents in the pharmaceutical industry, in an effort to help inform the important policy debates that surround these patents
Summary
Patents play a distinctively important role in the global pharmaceutical industry today. Studies suggest that pharmaceutical firms consider patents critical to their efforts to recoup R&D investments, much more so than firms in other industries [1,2,3] This is believed to reflect the difference between the high cost of discovering and testing new drugs and the low cost of reverse engineering generic copies of existing drugs [4]. Though the pharmaceutical industry is often cited as the epitome of a ‘‘discrete product’’ industry – one with low patentproduct ratios [2] – the number of patents per new drug has grown dramatically over the past three decades [6] Part of this growth presumably reflects the many types of claims common in the pharmaceutical sector. Characterizing the landscape of secondary patents is important in light of recent court decisions in the U.S that may make them more difficult to obtain, and for developing countries considering restrictions on secondary patents
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