New GAO report suggests that some patents may hamper development of new “innovative” drugsDecember 21, 2006

A report released by the Government Accountability Office indicates that while expenditures on research and development by drug companies have increased, this has not resulted in a commensurate increase in new drug applications (NDAs) with the FDA. In fact, NDAs have decreased by 21% from 1999 to 2004. The larger concern raised by the report is the decrease in the number of NDAs for “new molecular entites” (NMEs), or drugs that are not related to existing drugs. Specifically the report states:

From 1993 to 1995, the number of NDAs for NMEs increased, but declined by 40 percent between 1995 and 2004. The percentage of NDAs submitted that were for NMEs also generally declined after 1995. These submission trends indicate that the productivity of research and development investments has declined.

The question then is, what is causing these declines? Consumer advocates and some pharmaceutical industry analysts assert that part of the problem lies with drug companies obtaining additional patent protection for small modifications to existing drugs, such as dosage changes or changing the method of delivery. These advances have a lower developmental cost, and thus theoretically have a greater appeal from a business perspective, as they involve lower investment for similar benefit. Pharmaceutical companies, for their part, state that these protections are necessary to offset the cost of research required to create truly “new” drugs. Also, these incremental innovations can result in important therapies. Other potential causes also exist, such as a lack of scientific understanding in treatment of diseases leading to increased failure rates, which in turn reduces the number of NDAs filed. Additionally, regulatory issues may be contributing to these issues as well. This report has was commissioned by three members of Congress, who have each issued statements about the report. These three Congressmen are Representative Henry Waxman, Senator Dick Durbin, and Senator Edward Kennedy. With patent law apparently on the mind of at least some members of Congress, it will be interesting to see if the various patent reform efforts proposed this past legislative session gain more traction in the upcoming year.

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