A new study published in Drug Delivery Today
finds that patent term restoration (PTR) substantially prolongs the marketing exclusivity period for top-selling drugs by extending patents by a median of 2.75 years.
Patent Term Restoration
For most inventions, the 20-year period of patent protection is considered sufficient to incentivize innovation. However, for drugs, which require years of premarket development and marketing approval before they can be commercialized, additional periods of marketing exclusivity are available, including five-year marketing exclusivity for new drugs and 12-year marketing exclusivity for biologics.
Orphan drugs are also awarded a longer, seven-year period of marketing exclusivity than non-orphan drugs and drugs that receive pediatric exclusivity receive an additional six-month exclusivity period. Aside from pediatric exclusivity, which starts after a patent term expires, the other types of non-patent exclusivity run concurrently with the product’s patent term.
To account for the time lost during clinical development and regulatory review, the Drug Price Competition and Patent Term Restoration Act
, also known as the Hatch-Waxman Act
, also created provisions for companies to extend patents on their drugs by up to five years or up to a total of 14 years after approval, whichever is less.
For the study, the authors looked at the 170 top-selling drugs that had a generic approved from 2000 to 2012. Nearly half (49%) of those drugs received a PTR extension, with a median extension of 2.75 years resulting in a total exclusivity period of 13.75 years.
Comparatively, the drugs that did not receive a PTR extension had a median exclusivity period of 10 years after approval.
Most of the patents that received PTR extensions covered the drugs’ active ingredients (93%), while the rest covered methods of treatment (4%) or manufacturing processes (2%).
Whether a drug received a PTR extension largely fell upon whether the drug was a new chemical entity or a new formulation of an existing drug. Of the drugs that received a PTR extension, 94% were new chemical entities, while 74% of drugs that did not receive a PTR extension were new formulations of existing products.
For drugs that received a PTR extension, the authors found that generic entry occurred a median 13.75 years after FDA approval, with the PTR extension accounting for about 21% of that time. Most of the drugs that received PTR extension also benefited from pediatric exclusivity.
“PTR substantially extends the length of the market exclusivity period for top-selling drugs that contain new active ingredients, with the PTR term itself often reaching the current maximum legal limits,” the authors write, noting that policy measures to increase the length of non-patent exclusivities are likely to have limited impact on products subject to PTR as such products often receive exclusivity for 12 or more years.
The authors also found that PTR extensions delayed the entry of generic competitors for a quarter (26%) of the drugs, as generic entry for those products coincided with the end of the PTR extension.
However, for the remaining products that had PTR extensions, generic competitors mostly launched far after the end of the extended patent, signifying that other factors, such as secondary patents, delayed generic entry.