Pharmaceutical companies today are faced with increased costs for drug discovery and development and aggressive competition
from generic drug companies. As research costs skyrocket, generic drug companies sit poised and ready to compete as soon
as a patent expires. Maximizing patent term for successful products is an effective strategy for fending off generic competition
and extending product lifecycle. This article will explore strategies for keeping a product under the patent umbrella.
RISING COSTS OF DRUG DEVELOPMENT
The costs associated with discovering a compound, turning that discovery into a suitable drug candidate, and getting that
candidate to market have risen dramatically. Some estimates indicate that the cost for developing and marketing a single pharmaceutical
product has risen from $54 million in the 1970s to greater than $800 million by 2000.1
Patent protection and the market exclusivity that comes with it help to ensure a return on investment. A patent holder has
the right to exclude others from making, using, and selling the patented invention for a defined period (Figure 1). Therefore,
patented drugs are temporarily safe from the competition of generics, often resulting in substantial revenues. For example,
US sales for Prilosec in 2000 were over $4 billion,2 and worldwide sales of on-patent Lipitor and Prevacid totaled over $9.2 billion and $2.5 billion, respectively, in 2003.3,4
Figure 1. U.S. Patent Application Process.9
Over the next few years, a remarkable number of patented "blockbuster" drugs will lose their protection (Table 1). When Eli
Lilly's patents for Prozac (fluoxetine) expired in 2001, the concomitant multi-million dollar losses in revenue demonstrated
the devastating impact of patent expiration. Table 2 shows three examples of revenue losses following patent expiration.
Table 1. Blockbuster Drugs Facing Patent Expiration10, 11, 12
Pharmaceutical companies can employ a number of strategies to maximize patent protection on important compounds, thereby maximizing
the commercial lifecycle. During the research and development phase of drug discovery, a company will typically obtain patent
protection for the general compound and likely a method of using the compound in the treatment or prevention of a particular
disease or condition. Often, additional patents can be obtained to effectively extend patent term and market exclusivity.
Table 2. Revenue Losses Following Patent Expiration and Generic Drug Entry13-16
Once a compound or pharmaceutical composition has been patented, that patent becomes a prior art reference that must be considered
when seeking additional patent protection around the compound or pharmaceutical. As a result, the new patent protection generally
encompasses narrow improvements or new uses for the pharmaceutical not disclosed or suggested in the original patent. Strategies
for maximizing patent term are summarized in Table 3.
Table 3. Strategies for Extending Drug Commercial Lifecycle
One means for extending patent protection for a commercially successful drug is to obtain additional patents covering new
formulations of the known compound. Developing and patenting new formulations that promote patient compliance through reduced
dosing or ease of use, or that exhibit improved therapeutic outcomes or more-favorable side-effect profiles, is particularly
advantageous for defending against generics and protecting market share. Moreover, new formulations, as long as sufficiently
similar to the original approved drug, have the additional advantage of a shorter FDA approval route.