In Defense of Patent Protection

A common concern expressed about the pharmaceutical industry is that we do not do enough to ensure that patients have access to our medicines or that we're withholding medicines that can help alleviate suffering, improve the quality of life and, in some cases, cure disease.  Some even accuse the industry of exploiting patent laws so that we can retain the rights of production and charge more for additional years than we would in a world without patent protection.

Patent laws are in place for many reasons, perhaps most importantly so that innovating companies have a fair period of time to recoup the enormous investment required to develop breakthrough products. Without this, innovators and the investors who fund innovation, would be easy prey for copy-cat manufacturers. That is why the U.S. Congress - - and all 100 + member countries of the World Trade Organization - - have established a 20-year term as the basic protection period for patents covering the full gamut of products or their components including planes, trains, and automobiles and, yes, medicines.

The biopharma sector faces particular challenges with respect to a patent term in that it often takes a dozen or more years of efforts and, on average, $1.3 billion to bring a new medicine from the laboratory through clinical trials and FDA approval.  By the time a patient may benefit from the new medicine, much of its patent life can have expired.  Even though the 1984 Hatch-Waxman law allows up to five years of patent term restoration, many new drug products reach the market with about only 12 or so years of patent protection - far less than the effective patent lives of many other product classes.

We believe in investing in the medicines of the future.  As each approved medicine reaches patients, employees are diligently working on the next medicines that will improve the lives of future generations.  Developing these new medicines is expensive, time consuming and often frustrating.  For every new drug that comes to market, pharmaceutical companies have been working with 5,000 other molecules that failed at some level of testing.  Many times, a new medicine will not make it to market at all.  Only about 2 to 3 of 10 FDA-approved drugs even recoup their cost of development.  Yet, the cost of development must be paid for both these relatively few medically and commercially successful products and the overwhelming majority of drug candidates that fail along the way.   In recent years, Lilly has invested over $4 billion annually (approximately 20% of revenues) in our search for breakthrough medicines.   Without strong intellectual property protection, including patent rights, this simply would not be possible.

Pharmaceutical companies continue to invest in innovation not only because it is good for business, but it is what patients expect. If we want to continue to have breakthrough products, we need patent protection and incentives to invest in intellectual property.  The equation is simple, patents lead to innovation - which help lead to treatments and cures.