title: Excavating treasure from the amber of the prior art: why the public benefit doctrine is ill-suited to the pharmaceutical sciences.
abstract: This paper explores incongruities between patents and regulation as applied to the pharmaceutical industry in the United States. Research, development and marketing of a new pharmaceutical agent generally requires large, high-risk investments. The time and expense of conducting clinical trials to obtain pre-market approval from the Food and Drug Administration provides an additional barrier to entry. The patent system stimulates such investment by providing a legal barrier to appropriation of these investments by free-riders and increasing the likelihood of capital return on these investments. These two barriers are intertwined. For the most part, firms only attempt to clear the regulatory barrier when patent protection is certain. As a result of the uniquely challenging economic situation presented by the regulatory barrier, a common line of reasoning in patent policy and jurisprudence, that inventions which are barred from patenting benefit the public, is flawed. To the contrary, the patent/regulatory system forever traps pharmaceutical inventions, once placed in the public domain. Pharmaceutical companies cannot afford to invest the resources needed to clear the regulatory barrier if the investment is quickly appropriated by a free-riding manufacturer. Various implications of, and solutions to, this policy artifact are explored.
authors: Suffolk University Law School.
authors: Robert Alan
authors: RA
authors: Hess
mesh_terms: D002986:Clinical Trials as Topic / Q000191:economics; D003365:Costs and Cost Analysis; D016527:Drug Costs; D004345:Drug Industry / Q000191:economics / Q000331:legislation & jurisprudence; D006801:Humans; D062069:Inventions / Q000191:economics; D009316:National Institutes of Health (U.S.); D010330:Patents as Topic; D012106:Research / Q000191:economics; D014481:United States; D014486:United States Food and Drug Administration