Patent Use in the Pharmaceutical Industry

1. Patent Use in the Pharmaceutical Industry By: Fiona Murray, Kyle Jensen, Ilya Vaynshteyn

2. The Hatch Waxman Act (1984) simplified the approval process for generic drugs Started the generic drug industry Provided for ANDAs (cheaper, faster) Generic Drugs can be manufactured even while originals are still under patent FDA Orange Book Purpose: To make generic pharmaceutical firms aware of patents protecting brand-name drugs All patents that claim a new drug, or some method of using this drug are listed in the Orange Book ALL new patent-protected drugs since Hatch-Waxman are listed in the Orange Book

3. Our analysis focused on linking data from the FDA Orange Book with data from European Patent Office Orange Book: Focus on patent-protected, RLD NDAs Reference Listed Drugs (RLDs): Designated by FDA to be imitated by generics To prevent biochemical differences between brand-name drug and generic versions The �core� drug Patent-protected NDAs: NDAs that list patents (appear in PATENT.TXT � see Appendix) Data processing automated via Python and GNU text processing Open Patent Services (OPS) Online European Patent Office database containing patent info Data from European Patent Office, US Patent Office, Japanese Patent Office Patent family data, legal data, and bibliographic data For example: Classification Symbols (International or European), Abstract, Inventor Name Python code accesses OPS via SOAPpy (Python SOAP implementation) Given patent number, can retrieve assignee name(s)

4. The number of RLD NDAs approved per year is slowly increasing Since 1982, approximately 20% of all NDAs are RLD NDAs The number of RLD NDAs approved is less variable than the number of total NDAs approved

5. Most drugs (RLD NDAs) are protected by very few patents Average RLD NDA lists 2.69 patents

6. There appears to be little evidence of �platform technologies� Average patent is listed in 1.40 RLD NDAs

7. The companies with the most drugs (RLD NDAs) tend to be �big pharma� firms

8. Subsidiary companies and mergers play an important role in the pharmaceutical industry

9. �In-licensing� plays a significant role for more than 50% of drugs

10. �Out-licensing� varies significantly by firm

11. Certain families of drugs tend to be covered by �patent-thickets�

12. Close-up view of a sample �patent-thicket�

13. Research Institutions are active in filing joint-patent Applications

14. The relationship between patenting, drugs (RLD NDAs) and R&D is very complex

15. Conclusions / Summary There are only 2491 drugs (RLD NDAs) listed in the FDA Orange Book 717 are patent protected Fewer than 1382 patents cover all drugs (RLD NDAs) approved since 1984 Firms try to be self sufficient For close to 60% of their RLD NDAs, own all the patents listed in the NDA One-fourth of patents in the Orange Book are out-licensed But collaboration still necessary Acquisition of subsidiaries plays major role Joint-patent applications show small, but important effect of non-profits Licensing, joint-ventures needed also Own R&D and subsidiaries not enough to provide firms with the patents they need to protect all of their drugs (RLD NDAs)

16. Conclusions / Summary Effects of the Hatch-Waxman Act Generic vs. brand-name drug competition Benefits: Forces collaboration and more research by big pharma firms Stimulates innovation: Pharmaceutical companies need to keep developing new drugs, because older drugs replaced by cheaper generics

17. Thank You Questions/Answers

18. Appendix: Data File Structure

19. Appendix: Orange Book Data Details Data available online (http://www.fda.gov/cder/orange/obreadme.htm) PRODUCTS.TXT: Information about FDA approved Drugs PATENT.TXT: List of patents and the NDAs they site �NDA Number� is a common field All fields delimited by tilde (�~�) Sample Sizes 13,500 NDAs total in PRODUCTS.TXT 2,491 RLD NDAs 737 Patent-Protected RLD NDAs (5.5%) Our data file incorporates 717 (97.3%) of them because OPS query failed for some patents. This means the NDAs listing only those patents were not included in the data file because the entry was not complete (patent assignee was missing)