Most new drugs receive about 12 to 16 years of market protection from the time of US Food and Drug Administration (FDA) approval, according to a paper published in JAMA Internal Medicine.
These monopoly periods are usually defined by patents and regulatory exclusivity earned at the time of FDA approval.
Aaron Kesselheim, MD, JD, MPH, of Brigham and Women’s Hospital and Harvard Medical School in Boston, Massachusetts, and colleagues reviewed laws and regulations that protect brand-name manufacturers from competition. They also examined policy proposals intended to adjust exclusivity periods to help make drugs more affordable to patients.
They note that initial patents last for 20 years and can be extended to allow for clinical trials and regulatory review. Some laws also prevent approval of other manufacturers’ versions of new drugs for approximately 6 to 7 years, and for new biologics for 12 years.
During these exclusivity periods, manufacturers can charge higher prices, recoup their investments in research and development, and earn profits. When the exclusivity period expires, competitors can give the public wider access to the drugs at a lower cost. Manufacturers of brand-name drugs must then develop and market new products to maintain their revenue streams.
“In general, extending market exclusivity by expanding the period of patent protection is a more powerful means of preventing the entry of generic drugs than changes to regulatory exclusivity,” the researchers note. “However, proposals to extend patient protection also risk overcompensating manufacturers for the actual investments they have made.”
The investigators concluded that public policy for prescription drugs in the United States should ensure that drug market exclusivity periods provide an appropriate return on investments for manufacturers but do not indefinitely block access to more affordable generic drugs.
Kesselheim AS, Sinha MS, Avorn J. Determinants of market exclusivity for prescription drugs in the United States [published online September 11, 2017]. JAMA Intern Med. doi:10.1001/jamainternmed.2017.4329