Intellectual Property Reform for Pharmaceuticals

New CMAJ Article

A policy paper on pharmaceutical innovation and its relation to intellectual property law written with two health economist colleagues, Paul Grootendorst (Toronto) and Aidan Hollis (Calgary), will be published in November 2011 in the Canadian Medical Association Journal (CMAJ).

The article is entitled "Canada's Pharmaceutical Intellectual Property Laws: The Case For Fundamental Reform."

The Abstract is:

1. The regulations governing intellectual property protections for brand (innovative) drugs in Canada have generated a very large amount of litigation between brand and generic drug companies, costing over $100 million annually; these costs inevitably are passed on to drug plans and consumers.
2. One reason for this is the complexity and legal uncertainty created by three different, yet intertwined legal mechanisms (the Patent Act, the NOC Regulations and the data protection regulations); another reason is that regulations have given brand and generic drug companies the tools to contest the period of market exclusivity.
3. Recent provincial drug plan decisions to reduce generic prices to as low as 25% of the brand price may reduce the incentive for generic firms to contest market exclusivity, possibly resulting in longer exclusivity periods and higher costs to payers.
4. One solution to these problems is to offer fixed periods of market exclusivity to innovative drugs; this would at once enhance investment certainty to brand firms, and markedly reduce litigation, as brand and generic firms would be less able to contest market exclusivity

The article is available on the CMAJ website and from the authors.

Measuring Intellectual Property

My group has completed two substantial empirical studies on innovation in the pharmaceutical sector. The ensuing articles are entitled:

"Qualifying Intellectual Property I: Harmonized Measurement of Drug Approval, Drug Patenting and Chemical Components."

The purpose of this study was to develop a harmonized method to collect, compare and quantify regulatory approval data from multiple cohorts of new and follow-on drugs that encompassed all drug classes enumerated, described and prioritized by domestic drug regulators. A secondary purpose was to go beyond simplified descriptors of new and follow-on drugs in the literature, and to categorize classes of new, line extension and generic approvals according to the nomenclature used by regulators themselves.

"Qualifying Intellectual Property II: A New Innovation Index for Pharmaceutical Products."

To date innovation is measured using almost exclusively using quantitative methods, particularly with regard to patents. However, even though quantitative models are widely considered to be problematic, a model that assesses patent value using qualitative methods has not yet emerged. Here, a qualitative innovation index is reported that may fill some of the gaps in patent valuation. An innovation index for pharmaceuticals is described that provides a measure of patent quality that is specific to pharmaceutical products. The index is based on regulatory preferences and evidentiary requirements for various types of new and follow-on drugs and yields a method that is not only graded incrementally but which reflects the social value of the products being valued.

The Articles are available on the journal websites.