Period Of Market Exclusivity Research Articles

Patent term extensions for biologic innovators in Japan

The Japanese Intellectual Property High Court recently issued two decisions that bolster the market exclusivity period for brand biologic manufacturers.

Proactive Planning of the Timing of a Partial Switch of a Prescription to Over‐the‐Counter Drug

This paper focuses on the proactive planning of a partial switch of a prescription (Rx) drug brand to over‐the‐counter (OTC) status within the former's patent‐protected life. The planning issues are whether and when to make this switch from the “single‐status” Rx drug phase to the “dual‐status” Rx+OTC phase with or without the grant of a 3‐year market exclusivity period for the OTC drug by the US Food and Drug Administration. We formulate an optimal control problem that leads to a two‐phase optimization problem with finite‐time horizon involving switching time‐dependent switching cost and terminal value. Applying a variational approach, we establish the conditions under which it can be optimal to make the partial switch. Counter to conventional thinking, the grant of market exclusivity is neither necessary nor sufficient for a partial switch before the Rx drug's patent expiry. Further, we show in a functionally specified model‐based illustration, involving varying combinations of plausible ratios of OTC and Rx version margins and potential market sizes, that denial of OTC market exclusivity can imply that the firm should advance rather than delay the partial switch, and yield greater savings for Rx drug consumers. Implications for pharmaceutical Rx–OTC switch planners and policymakers are discussed.

European Medicines Agency support mechanisms fostering orphan drug development

A legislative framework introducing European public health measures on orphan medicinal products came into force in the European Union in April 2000. The aim of the orphan legislation is to stimulate research and development of medicinal products for rare diseases by providing incentives to the sponsors. Incentives include, among others, an unreserved access to the centralized procedure with a 10-year period of market exclusivity and fee reductions including free scientific advice for drug development. Nine years after the implementation of the orphan legislation, more than 690 products have been designated and 58 have received marketing authorizations in Europe. The orphan designations granted to date cover a wide variety of diseases for which there are either no authorized treatments or only limited treatment options with a need for improvement. At the dawn of the tenth anniversary of the orphan legislation, the aim of this article is to review how the European Medicines Agency has supported the mechanisms fostering development of orphan medicines in the E.U. since 2000.

Designation, plausibility, protocol assistance, clinical benefit, similarity, reassessment: Rules and experiences

Orphan legislation provides incentives to industry to investigate rare conditions that otherwise would be unlikely to be investigated. These incentives include, free access to scientific advice during the development of their clinical programs (‘protocol assistance’); reduction in fees payable to EMA for review of the marketing authorisation and subsequent licence maintenance fees; sustained market protection in the form of market exclusivity in addition to a range of national incentives. To qualify for these incentives companies must apply for orphan designation confirming the seriousness of the condition which has inadequate alternative therapeutic options (for the diagnosis, prevention or treatment) and that the condition qualifies in terms of low prevalence in the European community. The company must also provide evidence of medical plausibility including likely significant medical benefit for patients to be treated with the product for the proposed orphan indication. If an application for orphan designation is not accepted then a company is able to appeal providing detailed grounds for reassessment and will receive a second opinion from the PDCO. The period of market exclusivity awarded by orphan designation will require that future applications received by the EMA for the same condition have to undergo an assessment of similarity to ensure that no variations or new applications for ‘similar’ medicinal products are granted licences during this ten year period. Products gaining orphan designation provide regular/annual reports regarding their development status, status of global regulatory submissions and any change likely financial returns predicted for the indication.

Drug pricing and reimbursement in Europe: Strategy and tactics

The increase of the research and development (R&D) costs and the time needed for development has resulted in a shortening of the market exclusivity period and has put pressure on fair return on investment for brands. Obtaining a higher price will help contribute to achieve this goal. In the pharmaceutical industry, two subsequent forms of pricing have to be taken into consideration: pricing and reimbursement. The approach where, early on in the R&D process, products are developed that add value to the (existing) treatment options and where enough data are generated during the development will be successful in giving the company a fair return on investment. In Europe (and Canada) where pricing is historically lower and regulated by local agencies, all having different ways to control drug prices, a well-considered R&D and regulatory strategy developed in close collaboration with marketing will lead to success. This success will only materialise with good and fair pricing if, together with the above-mentioned strategy, a well-established communication plan for the new 'consumers' in the healthcare sector (physicians, authorities and reimbursement responsible, as well as patient organisations) is set in place. Thorough communication between the different departments in the company from the first steps in the research through development until final market authorisation will enhance the chances of the product's success in the market.

The Market Exclusivity Period for New Drugs in Japan: Overview of Intellectual Property Protection and Related Regulations

This paper reviews the institutional factors in Japan that affect the market exclusivity period for new drugs. The factors which directly affect the period are (1) statutory subject matter of patent protection, (2) patent term extension, and (3) restriction of the entry of generic drugs (market exclusivity right or data protection system). Other factors include (4) the experimental use exception (the so-called Bolar provision) and (5) compulsory license. In addition, the impacts of these factors on both brand-named manufacturers and generic drug manufacturers under the specific circumstances of the Japanese pharmaceutical market, such as the influence of the healthcare insurance system or the drug price control system, are discussed.

Generic competition and market exclusivity periods in pharmaceuticals

AbstractIn this paper we examine generic competition and market exclusivity periods for pharmaceuticals experiencing their initial generic entry between 1995 and 2005. We find that generic competition has increased over several dimensions. First, an increasing number of drugs are subject to generic entry, including drugs with relatively modest annual average sales. Second, drugs with larger sales attract more generic entrants and have shorter market exclusivity periods than smaller selling drugs. Third, blockbuster drugs with annual sales in excess of $1 billion have experienced significant decreases in their market exclusivity periods in recent years. We also find that Hatch‐Waxman Act patent challenges have negatively affected market exclusivity periods over the 1995 to 2005 period. Copyright © 2007 John Wiley & Sons, Ltd.

Response to Pazderka and Schroeder

Pazderka and Schroeder comment on the marked increase in domestic pharma R&D spending that occurred immediately after the federal government lengthened the period of market exclusivity afforded to patented drugs. They suggest that this increase has to be explained by factors other than the policy change. We disagree – we are not aware of any other factors that could explain as effectively the dramatic increase in R&D. That is why we believe that, had the Patent Act revisions not been made, domestic pharma R&D would have been much lower. We recognize that some of the additional domestic pharma R&D spending might have been shifted from other jurisdictions (so that global R&D increased by less than domestic R&D). OECD data, however, suggest that international pharma R&D increased markedly after 1987, and the Patent Act changes may have played a role. Schroeder expresses concerns about our “simplistic” assumptions, “questionable” calculation of expenditures and “inconsistencies” in our definition of R&D expenditures, but does not identify specific issues. It is therefore difficult to respond to his concerns. For instance, we assessed the effect of the Patent Act changes on two different measures of pharma R&D to ensure that our results were reasonably robust. (They were.) His criticism of our use of the motor vehicle industry R&D as a comparator to pharma R&D is clearer. He argues that the “motor vehicle industry is much less dependent on patent protection than the pharmaceutical industry, and investment in R&D in the Canadian motor vehicle industry has been artificially inflated by the Auto Pact agreement with the United States.” These statements may be true, but it does not follow that the change in motor vehicle sector R&D cannot reflect the effects of factors like changes in federal and provincial R&D tax credits on pharma R&D. Both are capital intensive industries composed of large multinational corporations who exercise discretion over the location of their R&D – it is unclear why inter-industry differences in the degree of reliance on intellectual property protection would matter. Schroeder further characterizes our comparison of drug cost growth in Canada to that in the US as “misguided.” We agree that patent approval times are shorter in the US, but while differences like these might affect the level of drug costs in the two countries, they do not invalidate a comparison of pre–post 1987 changes in drug costs in the two countries. We agree with Schroeder that the Patent Act changes likely have delayed generic competition until after sales of the brand drug have peaked – this is undoubtedly one of the sources of the increase in drug costs we observed after 1996. Schroeder points to several difficulties in valuing the health gains from the increase in pharma RD indeed, we stated that most domestic R&D involves safety and efficacy testing of drugs developed elsewhere. Nevertheless, such testing is a necessary part of the R&D that might not have occurred without the policy change, and the drugs that were developed on account of this R&D were likely of value to Canadians (and others as well).

How Does Canada Keep a Lid On Prescription Drug Costs?

How Does Canada Keep a Lid On Prescription Drug Costs?

Pediatric Research

One of the many provisions of the recently enacted Food and Drug Administration Modernization Act (FDAMA) provides for an additional period of market exclusivity in exchange for completed pediatric studies requested by the FDA for certain drugs of potential benefit to the pediatric population. The impetus for this law centers around two facts: Drugs needed in the pediatric population lack labeling for pediatric use, and industry lacks incentive to perform studies to support this additional labeling. Congress has now provided the incentive. The success of the pediatric initiative will rest initially on industry's willingness and readiness to do the studies. This willingness, in turn, will depend on FDAMA's impact on the economics of drug development and the availability of pediatric research capacity, both of which could be affected by the FDA's final rule on the assessment of safety and effectiveness of drugs and biologicals for pediatric patients. This rule will compel firms to conduct pediatric studies similar to the ones encouraged under FDAMA's voluntary pediatric exclusivity program. Although the Act provides for the statutory harmonization of the rule with the Act, whether the effects of the rule on the Act have been fully contemplated is a premise considered in this article. Congress too has much to contemplate as they evaluate the FDA's report, due in less than 2 years, on the public health effectiveness and economic effects of the Act's incentive program in preparation for possible FDAMA II modifications.

Surviving patent expiration: strategies for marketing pharmaceutical products

The pharmaceutical industry is characterized by high R&D costs and increasing competition. New pharmaceutical products are often provided patent protection to help companies recoup their R&D costs. The end of this period of market exclusivity is a challenging period for these companies. Marketers need to develop creative product, promotional, and pricing strategies for those products nearing patent expiration. First, provides an overview to the history of drug patents. Second, discusses with recommendations the strategies commonly adopted by companies with products facing patent expiration.