Drug Patents

In the pharmaceutical world, drug patents are one of the most crucial aspects, and many in the industry ask the same question: "How long does a drug patent last?" The short answer is that drug patents are good for 20 years after the drug's invention. In most cases, this time frame is halved to 10 years after testing finally brings the drug to the marketplace.

Patents are typically awarded within a few years after the patent application submission. A common misconception is that the patent begins only after the drug hits the market. However, the patent simply protects against copycat drugs from competitors in the pharmaceutical industry.

Drug Patents and the U.S. Food and Drug Administration

Although patents are good for 20 years after the invention of the drug, it can take up to eight years for a pharmaceutical company to do enough testing for approval from the U.S. Food and Drug Administration (FDA) and investors. This is because the FDA can continuously ask for more studies and experiments that document the side effects and efficacy on human patients.

Due to the rigorous amount of testing that goes into a drug patent, many larger pharmaceutical companies file several patents on the same drug, aiming to extend the 20–year period and block generic competitors from producing the same drug. It's estimated that once a generic drug hits the market after a patent expiration, name brand sales drop by 80 percent.

However, big pharmaceutical companies are not stupid. When they challenge a generic drug in court, the FDA must mandate a 30-month freeze on the approval of the generic drug. Generic drug makers in turn file lawsuits to invalidate these additional patents. This is just how the carousel of brand name versus generic drug makers works in a legal forum.

Generic Drugs and Patent Expiration

When pharmaceutical companies first develop a new drug for patients, it's offered under a sole brand name. This is almost always done under a patent, ensuring the patent-holding company is the only one allowed to manufacture, market, and profit from the drug.

Because the drug patent lasts only 20 years, brand-name drug producers move quickly to profit on their product. After approval from the FDA, this time frame is typically between 7 to 12 years. Once the patent expires, the generic companies hop into the picture. However, generic drug companies must produce a product with the identical makeup of the original drug.

Generic drug companies must also meet the following guidelines when it comes to generic drug production:

  • The original patent must have expired.
  • The original manufacturer must certify that the patents could not be infringed upon, are invalid, or otherwise unenforceable.
  • There have never been any previous patents on the drug or in countries where the drug has no protection by law.

The benefit of offering generic drugs is that it removes the monopoly of the patent-holding company, encouraging competition and causing drug prices to drop to a better price. This allows people who need the drug to decide for themselves which drug is best for their symptoms and budget.

However, this isn't the be-all and end-all of the story. Some name brand pharmaceutical companies constantly work to form a new, significantly changed version of the original drug. While this may require another patent application and clinical trials, it effectively blocks the competition from producing a generic equivalent, unless the FDA determines the original is of the same quality as the new drug.

Drug Patent Extensions and Its Effect on the Pharmaceutical Industry

While other patents have a finite length from the approval date, drug patents follow a different set of rules. In 1984, the government passed the Drug Price Competition and Patent Term Restoration Act, also known as the Hatch-Waxman Act. This act gave patent extensions to name brand drug companies to compensate for delays in the FDA approval process. This allows for a patent extension for up to five years, regardless of the length of time it took for the FDA to approve the drug.

The act further caps the protected amount of time to 14 years, depending on the approval delay time frame. This ensured the patent holder could assume profitability before generic drug companies moved into the picture.

Another way to extend a drug patent is through research on children. Any drug intended for use in children is automatically granted a six-month extension. Known as the pediatric exclusivity extension, this loophole can only be used twice.

Other Methods to Secure a Drug Patent Extension

While the Hatch-Waxman Act provides a standard for drug patent extension, it isn't the only way pharmaceutical companies can extend the patient's life. These other methods are often referred to as "evergreening."

The most common way companies do this is by getting additional patents on a new formulation of a drug that has the same benefits and treats the same illness as the older drug. In some instances, this may not even mean a total overhaul of the drug formula. Instead, the new drug might just simplify the administration and dosage of the drug. Common examples may include an extended-release formula or a rapid-release formula.

A drug can also garner a three-year extension of the patent if the manufacturer can prove it works for other types of illnesses or in certain circumstances. One of the most interesting cases of this method of evergreening involved an anti-diabetes drug called Glucophage. The company took advantage of the pediatric exclusivity extension, then poured their research in developing the XR version of the original. This translated into $3 billion in additional sales, thanks to a three-year patent extension.

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