Embrace Success: The Case for Data Exclusivity

Intellectual property protection is essential to global health and the future of medicine.  In the Trans-Pacific Partnership (TPP) Trade Agreement we have the ability to embrace medical breakthroughs and invest in a healthier future, or to undermine it.  The United States is currently negotiating the TPP with eleven other nations (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam), and intellectual property protection is a contentious issue in the discussions. 

In the context of global health, intellectual property rights and patent protection are the best way to advance drug discovery and development.  Those who argue otherwise are either ignorant of history or irrationally focused on a short-run vision of reality.  Unfortunately their skewed view of the world may have serious consequences for the future of medicine and global public health.  While critics of the IP provisions within the TPP argue that the agreement threatens access to affordable generic medicines, they fail to acknowledge that without such provisions these medicines would not exist.  

According to the Office of the U.S. Trade Representative, the TPP seeks “pharmaceutical IP provisions that promote innovation and the development of new, lifesaving medicines, create opportunities for robust generic drug competition, and ensure affordable access to medicines, taking into account levels of development among the TPP countries and their existing laws and international commitments”.[1]  One component of this protection is a proposal for twelve years of data protection for biologic medicines.  The twelve year limit is what biologics receive in the United States and this standard was established under the bipartisan Biologics Price Competition and Innovation Act of 2010.  The timeframe strikes the delicate balance between promoting competition and affordable access to medicines, and incentivizing the investment in innovation that provides new treatments and cures.  Given that the United States is the world leader in the development of biologic medicines, evidence suggests that this standard works effectively and has allowed the industry to flourish. 

Critics point out that twelve years of data exclusivity is unprecedented in any previous trade agreement and is not codified in the law of any other TPP negotiating country.[2]  They also argue that there is no good evidence that suggests that twelve years of protection is necessary to promote innovation in biologic medicines.  On both counts they are wrong. 

In an effort to determine the appropriate length of data exclusivity, Grabowski et.al. (2011) construct a financial model to establish how long the exclusivity period must be to provide a typical innovative biologic a positive return on investment.  Grabowski et.al. find that the break-even period ranges from thirteen to sixteen years.[3]  Strikingly, the proposed twelve years of protection in the TPP agreement falls short of the estimated time needed to truly incentivize biologic therapies. 

Existing protections in the United States have incentivized work on biologic drugs.  There are currently more than 907 drugs in development within the pharmaceutical pipeline to treat more than 100 conditions.[4]   While biologics are at the cutting edge of medical progress, there is plenty of evidence to establish that intellectual property protections do incentive innovation and generate success.  Moreover, this success translates into treatments for orphan diseases as well as neglected diseases.  According to a recent article in the New England Journal of Medicine, “in 2013, the Food and Drug Administration (FDA) approved 27 new drugs . . . eight of these drugs are for orphan diseases, including six rare cancers.”[5]  Intellectual property protections have provided us with these drugs and a multitude of other therapies.  Rather than turning our backs on this success, we should embrace it. 

The Trans-Pacific Partnership includes some of the world’s most vibrant economies and represents close to 40 percent of global GDP.  We have the chance to encourage both trade and innovation through the TPP.  We know what works and the TPP provisions will ensure that the standards that encourage innovation are protected.  Such an opportunity should not be missed. 

[1] Office of the United States Trade Representative. “Intellectual Property Rights,” TPP Issue-by-Issue Information Center, 2015.  Available at:  https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-pa...

[2] LeaMond, Nancy and Sophie Delaunay. “Don’t forget consumers and patients in the Trans-Pacific Partnership,” The Hill, April 27, 2015.  Available at:  http://thehill.com/blogs/congress-blog/healthcare/240013-dont-forget-con...

[3] Henry Grabowski et al., From the Analyst’s Couch: Data Exclusivity for Biologics, 10 Nature Reviews: Drug Discovery 15, 15–25 (2011), available at fds.duke.edu/db/attachment/1592‎.

[4] PhRMA. “Medicines in Development: Biologics,” 2013.  Available at:  http://www.phrma.org/sites/default/files/pdf/biologics2013.pdf

[5] Kocher, Robert and Bryan Roberts.  “The Calculus of Cures,” The New England Journal of Medicine, 17 April 2014, Vol. 370 No. 16, pp. 1473-1475.  Available at:  http://www.nejm.org/doi/full/10.1056/NEJMp1400868