{"id":18914,"date":"2018-10-01T09:03:00","date_gmt":"2018-10-01T09:03:00","guid":{"rendered":"https:\/\/technopolis-group.com\/essential-incentives-or-excessive-handouts\/"},"modified":"2020-04-08T14:31:48","modified_gmt":"2020-04-08T14:31:48","slug":"essential-incentives-or-excessive-handouts","status":"publish","type":"post","link":"https:\/\/technopolis-group.com\/fr\/essential-incentives-or-excessive-handouts\/","title":{"rendered":"Essential incentives or excessive handouts?"},"content":{"rendered":"\n

Patents incentivise research by giving entrepreneurs a temporary monopoly of the new knowledge they generate. But, in the pharma industry, it can take more than a decade from filing a patent to getting approval for a drug to be used in practice. That drastically shortens the amount of time a firm can use its monopoly. Supplementary Protection Certificates (SPCs) were developed as a simple means to extend the patent life of medicinal products. But it turns out that the application of the SPC regulation is not simple, and there is a lot at stake in terms of innovation and health care costs. <\/p><\/blockquote><\/figure>\n\n\n\n

Big Pharma has a problem recouping R&D costs <\/em><\/strong><\/h3>\n\n\n\n

It can cost as much as US$ 2.6bn for a pharmaceutical company to develop and prepare a drug for regulatory approval. It has not only to demonstrate its effectiveness but also its safety.1<\/a><\/sup> However, fewer than one in twenty such drugs make it to market.2<\/a><\/sup> Only half of the possible patent life (or even less) may then remain to recoup the R&D costs for those drugs that survive the clinical trials.<\/p>\n\n\n\n

When pharma patents terminate and supplementary protection mechanisms kick-in heated policy debates are certain<\/em><\/p><\/blockquote>\n\n\n\n

This was less of an issue in the past when big pharma firms could\nrely on their \u2018blockbuster\u2019 drugs \u2013 that is, drugs addressing common diseases\nand selling over $1bn per year \u2013 for much of their sales. But the blockbuster\ndrug patents have been expiring and the pharma companies are struggling to\nreplace them with new, high-revenue products. Faced with this \u2018patent cliff\u2019,\nthey have started to look for new ways to recoup R&D costs, including the\nmanagement of patent life. <\/p>\n\n\n\n

SPCs seem to offer a solution <\/em><\/strong><\/h3>\n\n\n\n

The EU\u2019s SPC regulation was intended as a simple response to\nthis problem (and also as a means to foster European industry). It offers a\nseemingly straightforward way to extend patent life by up to five years. This\nmay not seem long, but as SPCs usually kick in when a drug is in its most\nprofitable phase \u2013 after the initial marketing efforts have started to pay off\n\u2013 even short patent life extensions, even months, are valuable. <\/p>\n\n\n\n

The complexity of the SPC system arises from several factors,\nsuch as:<\/p>\n\n\n\n