Intellectual Property

Biopharmaceutical research companies operate under what some would consider a prohibitively difficult business model: They make massive investments in research and development beginning 10 to 15 years before their products will ever reach the market, with these investments largely facilitated by the promise of intellectual property protection.

R&D is not only expensive, but it is also risky. Only five out of 5,000 experimental compounds will reach clinical trials, and only one of those five -- after an average cost of more than $1.2 billion -- eventually will gain Food and Drug Administration approval. Even then, FDA approval is no guarantee of market success, as only two out of every 10 medicines will recoup the money spent on their development.

So why do biopharmaceutical research companies embark on this process? Ultimately, the goal is to find tomorrow’s life-changing, or even life-saving, new medicines. But despite these ambitions, challenges remain. That’s why companies must be able to benefit from the incentives of IP protections such as patents and data protection.

These protections do not provide the certainty of success. However, they do help ensure that the innovative brand biopharmaceutical companies that have invested in life-saving medicines have an opportunity to justify their investments. IP protections also help companies secure the resources for future investments in research, giving hope to the possibility of tomorrow’s innovative medicines.

There are three key elements for an effective intellectual property system: It must promote fair and effective incentives for innovation; it must give innovators certainty regarding their rights; and it must offer patent holders strong enforcement tools for defending infringed patents.

It is an oversimplification to suggest that IP exists for protection. It exists as an incentive for innovation, and it exists to give innovators a way to enforce that protection and, ultimately, defend their business models.

Without intellectual property rights, undue competitors simply could copy biopharmaceutical innovations immediately, offering their versions without the high costs and risks to develop the medicines. This would seriously impact the innovator companies' opportunities to try to recoup their investments.

At the most fundamental level, IP rights give America’s biopharmaceutical research companies a chance to survive and fund further research in a highly competitive environment.

News

TPP / 12 Year Data Protection Support Letters
In 2011 and 2012, members of both Houses of Congress and Governors from 11 states, have expressed bipartisan support for the extension of 12 years of data protection for biologics as the  standard for the TPP

PhRMA Comments On 'Special 301'
The value of intellectual property protection should not be undermined by discriminatory market access barriers. PhRMA welcomes the Office of the U.S. Trade Representative's recognition of market access barriers faced by U.S. pharmaceutical companies and their efforts to eliminate them in many countries.

Drug Patents Are Good For Our Health
This article explains how HIV protease inhibitors, combined with other innovative medications, helped turn HIV infection into a chronic, manageable disease for treated patients and how that intellectual property protection and the incentive it provides helped drive that remarkable success.