[Ip-health] Study Questions Benefits of Price Protection for Drug Companies

[Terri - Louise Beswick]

Study Questions Benefits of Price Protection for Drug Companies

January 25, 2010

As Congress considers new measures that would provide twelve to fourteen

years of price protection beyond patent rights for biological drugs, a
new study in the current issue of the Journal of Health Politics, Policy

and Law documents how the European Union granted pharmaceutical
companies similar protections without clear evidence that they would
benefit patients or increase innovation.

The proposed United States legislation on data exclusivity prohibits
generic competitors from using the data gathered to test a drug's safety

and efficacy for the public as part of their application to the Food and

Drug Administration.

"Data exclusivity requires buyers to pay prices protected from normal
competition," says Sandra Adamini, the lead author of the study. "It
might even apply if the patent has expired." Drug companies argue that
data exclusivity is needed beyond twenty-year patent protection in order

to earn back large investments in research and to provide an incentive
for more innovation.

The study, "Policy Making on Data Exclusivity in the European Union:
 From Industrial Interests to Legal Realities," by Adamini, Hans Maarse,

Esther Versluis, and Donald W. Light, examines the results of actions
undertaken by advocates for the pharmaceutical industry inside the
European Commission, who initiated ten-year data exclusivity price
protection and managed revisions to the legislation. The authors
demonstrate that there is no evidence that patents held by
pharmaceutical companies are not already sufficient, or that these
government-mandated higher prices increase innovation.

The study also highlights the risks of the legislation if it passes in
the U.S., and the resultant impact on developing countries, where data
exclusivity makes drugs for cancer, HIV-AIDS, and other serious
conditions prohibitively expensive. Physicians working for international

humanitarian organizations, such as Doctors Without Borders, have also
reported how the lack of generic competition makes drugs they need for
their patients unaffordable in developing countries. The U.S. Federal
Trade Commission, which fosters competition, has stated that data
exclusivity price protections for biological drugs are not necessary.

This study is accessible for free at
http://jhppl.dukejournals.org/cgi/reprint/34/6/979.

For more information on the Journal of Health Politics, Policy and Law,
please visit http://www.dukeupress.edu/jhppl.

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