Today’s guest blog comes from Dave Ricks, Lilly Chairman and CEO.
Alzheimer’s is one of the most feared diseases in the world—for good reason. It robs people of their pasts and their futures. And no treatment slows it down.
Without an effective therapy, the Alzheimer’s health crisis will become a global economic crisis. Already, the U.S. government spends more than $20 million an hour caring for Alzheimer’s patients. Globally, the costs of caring for Alzheimer’s patients are expected to double in the next decade, as the number of people suffering from this memory-robbing disease spikes from 50 million to more than 80 million.
In a recent op-ed in the Financial Times, I wrote that innovation can change the alarming math of Alzheimer’s. But to do that, governments need to change the math for innovators. The costs of bringing an Alzheimer’s drug through the regulatory process are more than double the norm—due to longer testing times, higher failure rates and extra challenges for doctors caring for patients.
(For a fuller discussion of the challenges of Alzheimer’s—and potential solutions—check out the 2019 Global Innovation Index.)
Problems with IP Policy
One solution is in intellectual property rules. Patents and other IP rules limit the period during which an innovator pharmaceutical company can recoup its development costs. So companies tend to focus their investments in disease areas with faster clinical trials and lower failure rates than Alzheimer’s.
Pharmaceutical companies are studying more than 20 times as many drugs for cancer than for Alzheimer’s, even though the global societal costs of each disease are about the same. Funding flows to cancers and stages of cancer where potential survival times are shorter—because longer trials needed for earlier interventions or slower-progressing cancers consume too much of a drug’s patent life.
Patents provide 20 years of protection for a new medicine. But that 20-year clock starts before clinical trials begin—years before a medicine is approved for sale. So every extra year of clinical testing means one less year in patent-protected sales.
Over the past two decades, average post-approval patent life in the U.S. and Europe has fallen to 13 years. The combination of lengthening development timelines and fixed patent terms creates a perverse incentive for innovators to prioritize molecules with faster development times, not necessarily the medicines patients need most.
Some governments have tried to compensate for these perverse incentives with patent-term extension policies, which restore some of the time lost due to extensive clinical testing. That’s good, but the better fix may be data exclusivity.
Solution: Data Exclusivity
Data exclusivity prevents a second company from introducing a copycat version of a medicine without first generating its own clinical studies. Data exclusivity begins on the date a medicine is approved by regulators, which offsets the years of patent life lost due to extended clinical trials. Just one additional year of exclusivity has been shown to make a significant difference on R&D investment.
There is a patchwork of terms of data exclusivity around the world—from as high as 12 years to as little as none. Making at least 12 years the standard would spur investment into difficult and slow-progressing diseases like Alzheimer’s.
Data exclusivity offers a small or perhaps even no benefit for medicines that are developed quickly—because the period of exclusivity will entirely overlap with the patent term. But for drugs that use up most of their patent life in clinical trials, data exclusivity can extend the innovator company’s rights so they are similar to a drug that could be developed more quickly. As a result, it can drive more investment into difficult and slower-progressing diseases.
Hope for Patients
Lilly has experienced this dynamic first hand with one molecule in our pipeline, which we continue to test in Alzheimer’s patients. The U.S. patent on this molecule will expire soon, in 2021. Yet Lilly continues to manufacture and test this molecule because the 12 years of data exclusivity in the U.S. and 10 in Europe still offer some incentive to invest in it. Without data exclusivity, this molecule—and many other promising compounds—would have almost no hope of reaching patients.
Extending data exclusivity is an unpopular idea with many people who believe the key to pharmaceutical affordability is to reduce the duration of IP protections. But I believe an appropriate period of data exclusivity is essential to generate the investment necessary to create a sufficient supply of disease-modifying Alzheimer’s medicines to begin with.
A strong IP system produces more breakthroughs today and more bargains tomorrow. That’s what patients are counting on. Their hope—and ours—is to find a breakthrough now.