Intellectual Property

Intellectual Property Protections Are Vital to Continuing Innovation in the Biopharmaceutical Industry

Biopharmaceutical research companies operate under a challenging business model:  For every 5,000 to 10,000 experimental compounds considered, typically only one will gain Food and Drug Administration (FDA) approval, after 10 to 15 years of research and development costing an average of $1.2 billion, based on a 2007 study.  The few successes must make up for the many failures.  In fact, only two out of every 10 medicines will recoup the money spent on their development.

Drug research and development leads to the discovery of tomorrow’s life-changing and life-saving new medicines.  Biopharmaceutical intellectual property (IP) protections, such as patents and data protection, provide the incentives that spur research and development.  They help ensure that the innovative biopharmaceutical companies that have invested in life-saving medicines have an opportunity to justify their investments.  Intellectual property protections also help companies secure the resources for future investments in research, giving hope to patients who await tomorrow’s innovative medicines. 

The existing framework of intellectual property policies—including the recently amended patent law and the inclusion of 12 years of data protection for innovative biologics in the health reform law—are necessary to support future R&D investment . These policies provide incentives that spur biopharmaceutical innovation, leading to new treatments and eventually generics—and biosimilars.

How and Why IP Protection Works

There are three key elements for an effective intellectual property system:

  • It must provide fair and effective incentives for innovation
  • It must provide innovators certainty regarding their rights
  • It must offer patent holders strong enforcement tools for defending infringed patents

Without intellectual property rights, competitors could simply copy biopharmaceutical innovations as soon as they were proven safe and effective, offering their own versions without investing the time and money to develop the medicines. Innovators in the biopharmaceutical industry could lose the ability to recoup their substantial investment in new drug development, making it more challenging to find funding.

Reasonable intellectual property protection is essential to sustain the U.S. biopharmaceutical sector’s continuing investments in new research and development.  At the most fundamental level, IP rights give America’s biopharmaceutical research companies a chance to fund research into new treatments for our most costly and challenging diseases.

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