An NCE patent, or new chemical patent, is a five-year period of exclusivity that rewards innovators for their research and development efforts. This usually includes expensive clinical tests that demonstrate the safety and efficacy of the NCE, as outlined in the New Drug Application (NDA).

Throughout this five-year period, the NDA holder typically tries to recoup the cost of their investment. This exclusivity is granted whether or not a United States patent has been issued. Patent protections are important, as they prevent generic drugs from entering the marketplace outside the dates set forth in the exclusivity period.

Exclusivity

A patent isn't your only pathway to exclusivity. In fact, the Food and Drug Administration (FDA) has two separate categories. They are:

  • Exclusivity
  • Patents

Exclusivity is granted when exclusive marketing rights are permitted by the FDA. This comes with product approval and is designed to create a balance with generic drugs.

One of the primary differences with patents is that they can be issued at any time and expire at any time. This can occur at any point during the FDA approval process. Meanwhile, exclusivity provides approval of the product.

Some drugs will have both exclusivity and patent protection, while others will only be awarded one or the other. These rights won't necessarily run concurrently and may not even cover the same components of the drug product.

The Role of the FDA

In short, the FDA is responsible for protecting public health. It ensures the safety of human and veterinary drugs and medical devices. This responsibility extends into the United States' food supply and cosmetics.

The process to create and discover a new drug is astoundingly in-depth. The FDA makes it illegal to sell drugs with medical claims that were not approved by them. As such, insurance companies will not pay for them. Meanwhile, it's the FDA that decides which products will be offered to the public.

The ratio of researched drugs which actually gain FDA approval is between 5,000 and 10,000 to 1. In fact, in 2016, only 22 new medications were cleared for sale. That marked the lowest ratio since 2010. 2015 wasn't much better, with only 45 new medications making it to pharmacy shelves.

Many drug developments tend to fail, and those that have succeeded in the approval process have likely spanned a decade and spent nearly $3 billion along the way. That price tag is so astonishing because of the research and development as well as the legal fees associated with such an endeavor.

Patent Protection

Critics of the patent system like to cite exclusivity rights as the problem. In truth, they play a major part in the cumbersome process. Meanwhile, without the guarantee of exclusive rights, there's no way a pharmaceutical company would ever justify investing $3 billion in a single drug.

Other elements of the lengthy administrative delay can be attributed to the patent term. However, patent owners of FDA-approved drugs do not receive the same term as other innovators. This is why innovative drugs are so costly. They have a shorter window of time to recoup their expenses before the generic brands reach the market at a lower price point.

This is why patent protection is so vital. If there was no way to reap any of the benefits from a small portion of successful drugs, the entire system would crash and new drugs would stop hitting the marketplace.

Medical Devices

If you're developing a medical device, many of the same principles apply. Medical devices also require clinical studies, peer reviews, and the approval of the FDA. This will add up to years of research and development and, ultimately, cut into the profit of your product.

The design and function of your medical device are patent eligible. Intellectual property protection is important because it may prevent competitors from infringing on the lifespan of your product. This is particularly true if you've developed a product with low manufacturing costs and high research and development costs i.e. disposables.

To block your competitors from designing around your patent, make sure your claims are broad. This makes patent protection important at every stage, not just upon the completion of the product. The last thing you want is a competitor to ride your coattails and benefit from your hard work.

If you need help with your NCE patent, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.