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NATIONAL CENTER FOR POLICY ANALYSIS
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| Tampering With Drug Patents is Short-Sighted and Risky |
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Congress is considering legislation to trim patent protections on prescription drugs in order to speed generic drugs to the market. The problem is that such a policy might also reduce drug companies' incentives to spend the more than $30 billion a year on research they do now.
- Columbia University's Frank Lichtenberg has estimated that, on average, each new drug approved during the period 1970 to 1991 saved 11,200 life-years in 1991.
- Although today's drug patents run for 20 years, the Food and Drug Administration's approval process eats up half or more of that protection.
- Moreover, the 1984 Hatch-Waxman Act allowed generic drug firms to use and test patented drugs and avoid repeating the FDA approval process -- allowing them to begin selling on the market the day a patent expires.
- Generics now account for almost half of the drug market -- up from just one-fifth in 1984.
Slicing away at drug patents is supported by an organization called Business for Affordable Medicine. Its members include General Motors, Wal-Mart, Verizon, Eastman Kodak, Motorola, Weyerhauser, Kellogg and Georgia-Pacific. A number of those companies hold valuable patents. If the aim is to save consumers money, critics point out, why stop with pharmaceuticals? Why not perform a little surgery on those patents?
Source: Doug Bandow (Cato Institute), "Fighting the Patent Wars," Washington Times, July 12, 2002.
For more on Patent Issues
http://www.ncpa.org/iss/leg
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Copyright © 2002 National Center for Policy Analysis - All rights reserved.
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