title: The roles of patents and research and development incentives in biopharmaceutical innovation.
abstract: Patents and other forms of intellectual property protection play essential roles in encouraging innovation in biopharmaceuticals. As part of the "21st Century Cures" initiative, Congress is reviewing the policy mechanisms designed to accelerate the discovery, development, and delivery of new treatments. Debate continues about how best to balance patent and intellectual property incentives to encourage innovation, on the one hand, and generic utilization and price competition, on the other hand. We review the current framework for accomplishing these dual objectives and the important role of patents and regulatory exclusivity (together, the patent-based system), given the lengthy, costly, and risky biopharmaceutical research and development process. We summarize existing targeted incentives, such as for orphan drugs and neglected diseases, and we consider the pros and cons of proposed voluntary or mandatory alternatives to the patent-based system, such as prizes and government research and development contracting. We conclude that patents and regulatory exclusivity provisions are likely to remain the core approach to providing incentives for biopharmaceutical research and development. However, prizes and other voluntary supplements could play a useful role in addressing unmet needs and gaps in specific circumstances.
authors: Henry G. Grabowski (grabow@econ.duke.edu) is a professor of economics at Duke University, in Durham, North Carolina.
authors: Henry G
authors: HG
authors: Grabowski
authors: Joseph A. DiMasi is director of economic analysis at the Tufts Center for the Study of Drug Development, Tufts University, in Boston, Massachusetts.
authors: Joseph A
authors: JA
authors: DiMasi
authors: Genia Long is a senior advisor at the Analysis Group, in Boston, Massachusetts.
authors: Genia
authors: G
authors: Long
mesh_terms: D001363:Awards and Prizes; D035843:Biomedical Research / Q000191:economics* / Q000331:legislation & jurisprudence / Q000458:organization & administration; D001702:Biopharmaceutics / Q000191:economics* / Q000331:legislation & jurisprudence; D017277:Drug Approval / Q000191:economics / Q000331:legislation & jurisprudence; D004345:Drug Industry / Q000191:economics* / Q000331:legislation & jurisprudence / Q000458:organization & administration; D006801:Humans; D018973:Intellectual Property; D058069:Neglected Diseases / Q000188:drug therapy / Q000191:economics*; D009965:Orphan Drug Production / Q000191:economics* / Q000331:legislation & jurisprudence; D010330:Patents as Topic / Q000331:legislation & jurisprudence*; D010372:Pediatrics / Q000191:economics / Q000331:legislation & jurisprudence; D012052:Reimbursement, Incentive; D013810:Therapeutic Equivalency
keywords: Biotechnology; Legal/Regulatory Issues; Pharmaceuticals