Trilateral Meeting The Hague
13 October 2008

Trilateral Meeting The Hague 13 October 2008

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Why the pharmaceutical industry needs patents

2)

How the system works

3)

The PCT

4)

The way forward?

Patents and the Pharma industry
Estimated full cost of bringing a new chemical or biological entity to market ($ million – year2005):

Source: J.A. Di Masi and H.G. Grabowski, ‘The Cost of Biopharmaceutical
R&D: Is biotech Different?
Managerial and Decision Economics 28 (2007): 469-479
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Patents and the Pharma Industry• It takes up to15 years to develop a new drug;• For every 5-10,000 molecules synthesised and screened foractivity, only 250 reach pre-clinical development, only 5 reachclinical trials and only one reaches the market;• Cost to develop a drug in 2006: € 1,059 million ($ 1,318 million);• Only 2 of 10 marketed drugs ever produce revenues that match orexceed R&D costs;• Pharmaceuticals are generally cheap and easy to copy – genericcompanies enter mature markets developed by innovator with low
entry costs;• These features are probably unique to the pharmaceuticalindustry;

Initial + NamePatents and the Pharma Industry• Given these costs and risks, without a period of exclusivity against
copyists (but not a period of therapeutic exclusivity), there would be
no investment in pharmaceutical innovation;• Patents and data exclusivity are the legal tools for providing theexclusivity;• The exclusivity provided by patents promotes therapeutic andinnovative competition;

How the Patent System works•Many scientists seeking to solve same problems in different orsimilar ways from similar starting points at the same time;•The first to market is generally quickly followed by several others(The competitor can design around many patents - i.e. sell aproduct which does not infringe);•The first on the market is rarely the most successful;•The customer benefits from a range of products with differingcharacteristics;•Upon expiry of first patents, competitors can sell original product –the market will determine the success of new versions;

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The Patent System benefits Society• Patent System promotes disclosure of innovations;• There would be no competitive therapeutic innovation withoutpatents;• Patents promote competition in innovation;• No undue impediment to competitor entry;• Consumers benefit;

The Patent System
In an ideal Patent System:•Patents only granted for inventions which are:-solution to a technical problem;-inventive, not obvious;•Examination by skilled examiners;•Design around possible if scope of exclusive rights
narrow;

Initial + NameBefore the PCT•Had to file patent applications in a multitude of countries
before importance of invention clarified;•Duplication of patent office activity;•Expensive for applicant;

The Benefits of the PCTPCT system is of great value to Pharma Industry:•Simple system for initial filing;•Delays decision on national filings for 18 months –potential cost saving;•Provides report on patentability that is of great assistancein less experienced patent Offices;•Decreases procedural requirements for National Offices –i.e. assignment documents;•Enables amendments to be filed centrally;

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The PCTThe future of the PCT:
•Ensure quality of search and examination reports;•Carry out supplementary searches if required;•Ability to have more than one written opinion in Chapter II;•Provide systems for centralised access and exchange of workresults;•PCT set up to address work sharing between Offices, shouldn’t
try to reinvent the wheel;

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