PATENT PROTECTIONS: Brand Names Receive Big Breaks

      Adding fuel to election year fire on Capitol Hill over lowering drug costs, a report to be released today by the National Institute for Health Care Management finds that patent protections for brand name drugs has increased significantly across the past two decades, the Wall Street Journal reports. The document states that the lifespan of an average drug's patent -- the period remaining after the products receive FDA approval -- has risen to between 13 and 15 years, up from eight years in the early 1980s. These greater protections have "significantly delayed the entry of some cheaper generic drugs into the market," the report says. Brand name drugs account for roughly 90% of all spending and about 60% of all prescriptions in the United States. The NIHCM report also finds that just 36% of FDA approved drugs were for compounds new on the U.S. market. The majority of new drug applications were for "drugs whose active ingredients already were on the market, to be marketed in new dosages and combinations, or by new manufacturers." The report reviewed six laws enacted between 1983 and 1997 that strengthened brand name drug patents; eased the transfer of government-discovered products to pharmaceutical companies; or extended drug companies' exclusivity on the market. Nancy Chockley, president of the NIHCM, said, "These laws have been a key driver in the industry's profits," adding, "The current system appears to be out of balance and it's costing Americans billions of dollars."

Product of Managed Care Lobbying?
      Critics of the report, such as Pharmaceutical Research and Manufacturers of America President Alan Holmer charge that the managed care industry, which partially funds the not-for-profit NIHCM, is using the report for its "self-serving agenda ... to reduce patent terms for medicines to save money for themselves." Holmer called the report "inaccurate and misleading," stating, "Pharmaceutical companies have far less time than other industries to recoup their huge research and development costs." Across the next five years, 150 drugs with $50 billion in combined annual sales will lose patent protection, thereby offering "even greater choice to consumers," he said. The report notes that many manufacturers are seeking to prevent this onslaught by extending their patent protections (McGinley, 7/24).