Clinical Trial Effect on Patents, Research Paper Example

The United States Food and Drug Administration (FDA) Center for Drug Evaluation and Research (CDER) was developed in order to monitor and ensure that drugs produced and marketed in the United States are both safe and effective.  The purpose of the CDER is not to test drugs.  The purpose of the CDER is to conduct research on the quality of the drug, along with effective and safety measures.  The CDER is responsible for prescription, non-prescription (over-the-counter) drugs.  It is the responsibility of the company developing the drug to test the drugs and meet the compliance terms, which are submitted to research scientists, physicians, pharmacologists, chemists, etc.  (FDA, 2014) If a drug is developed, it is protected under a patent protection. A patent protection indicates that only that specific company is allowed to manufacture and market the drug.  The drug patent usually last around twenty years in the United States; however it can vary in different countries and with different drugs.  In addition, the company applies for the patent before the clinical trials occur in order to meet the drug safety and effectiveness conditions. The effective patient period takes around seven to twelve years to receive approval.  Once the patent expires, the drug can be produced and sold by other drug companies.  (Mandal)Companies developing drugs are first and foremost interested in increasing the value of their company.  In regard to the development of drugs, the length of the patent results in a longer market for the company, this in return results in increased profits.  Patents are therefore a necessity for a company in order to protect their ideas while under FDA approval process.  (Fernandez and Huie)  The current paper discusses the effects of the patent when a drug is put under clinical trial for FDA approval.

The average time for a biotechnology patent is 4.4 years and a 20 year monopoly is granted by the United States Patent and Trademark Office (USPTO) for exchange of public disclosure.  A pre-clinical study is a study that is conducted in order to examine in vitro studies using animals with similar genetic structure, metabolic features, cellular reception, and pharmacological responses similar to humans.  These studies can vary depending on the success of the initial research studies.  The FDA also is required to approve the drug when analyzing the data obtains from the trials.  This can take anywhere from 10-12 years and costs up to 500 million dollars. The FDA approval time is also divided between clinical trials and New Drug Application (NDA) approval process.  The FDA tests the safety and effectiveness, while the NDA analyzes both the pre-clinical studies and the clinical studies.  (Fernandez and Huie)

The first step is conducting a preclinical study.  This step is considered the rate limiting step, because the clinical trials can no commence until there has been significant data for human testing.  It is therefore, highly suggested that preclinical studies are conducted as soon as possible in order to increase the timeliness of the FDA and USPTO process.  The problem is that the lag time and extension of the preclinical studies past the issuance date, delays the FD approval, which results in the company to market the drug exclusively as their own.  The good part of the process occurs once the FDA approves the drug for consumption and the company can therefore have exclusivity of the drug for the remainder of the patent length.  (Fernandez and Huie)

With many drugs, there will be delays in the pre-clinical and clinical trials.  With these delays, the patent delays as well.  There are certain methods that can extend the patents due to the approval processes and delays.  One method is referred to as the Drug Price Competition and Patent Term Restoration Act of 1984.  The act allows for an extension of 5 years.  (Fernandez and Huie)    It has also been suggested that the structure of the patent system delays the introduction of new innovative drugs, such as drugs that fight cancer diseases.  The problem persists because there is a fixed term of 20 years in the United States.  However, companies file patents at the initial time of discovery.  Some drugs are filed for the patent at the time of commercialization, which they receive the full 20 year term; whereas, there is a time in between for drugs between the initial invention period and commercialization.  Therefore, the way this is structured does not allow for companies to undergo long-term research into the drug.  One study conducted by Budish et al., found that companies that had long lag times had lower research and development investment.  This studied used clinical trials using patient group survival rates.  (Budish, 2)

Another study found that effective patent life was decreased due to the lengthy time periods required for the clinical trials and approval process. (Grabowski and Vernon, 98)  The problem is that the patents are granted several years before the drug has completed the clinical testing and approval by the regulating agencies.  The increased in the amount of time is due to the regulatory acts that are necessary for the investigation and impacts on new drugs.  This resulted in the increase in cost, complexity and time of new drug development.  Although this is essential for the health and safety of humans, it is a downfall for the companies developing the drug.  The cost and time takes many years and once the patent is expired, the generic use of the drug can be produced by other companies at a much lower cost.  The information is out there and company can duplicate the information at a much lower percentage of the initial cost.  (Grabowski and Vernon, 98-100)

The development of drugs and lengthy and costly and have resulted in lost patent time, the United States, along with other countries have enacted a new patent term restoration plan in order to compensate for the lost patent time on the clinical trials and regulatory requirements.  Clinical trials are necessary for human health; therefore, the implementation of the extension for patent seems justifiable for these companies investing in research and development of a new drug.

Works Cited

Budish, E., Roin, B.N., Williams, H.  Do firms underinvest in long-term research?  2014. 74pgs. Retrieved from: http://economics.mit.edu/files/8651

FDA.  How Drugs and Developed and Approved. 2014.  Retrieved from: http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/

Fernandez, D.S. and Huie, J.T.  Strategic Balancing of Patent and FDA Approval Processes to Maximize Market Exclusivity. Retrieved from: http://www.iploft.com/PTO-FDA.pdf

Grabowshi, H.G. and Vernon, J.M. Effective patent life in pharmaceuticals. Int. J. Technology Management. 2000. 19(1/2):98-119.  Retrieved from: https://fds.duke.edu/db/attachment/182

Mandal, A. M.D.  Drug Patents and Generic Pharmaceutical Drugs. News Medical. 2014. Retrieved from: http://www.news-medical.net/health/Drug-Patents-and-Generics.aspx