US more favourable to drug innovation than Europe

Pharma industry also reveals concern about regulatory and IP system in Europe

The US is providing a more favourable environment for drug innovation than Europe, according to the latest annual life sciences research from Marks & Clerk, the international intellectual property group.

The findings, based on a survey of 381 executives across the pharmaceutical and biotechnology sectors, reveal growing concern over regulatory trends in Europe – from the fallout of the Commission's probe into anti-competitive practices within the sector, to administrative changes to the patent application process made by the European Patent Office (EPO).

This contrasts with a sanguine response to US healthcare reforms and increased confidence in the US IP system, which is viewed by 62% of respondents as better rewarding innovation and keeping up with the changing needs of the industry than Europe.

The provision in the US Health Care and Education Reconciliation Act 2010 for a 12-year period of data exclusivity for complex biologics, instead of the traditional five years is also supported by 88%. In addition, 89% believe lasting capital will be attracted back into the US market as a result of the reforms.

Almost two-thirds (64%) of respondents say that European policymakers are ‘essentially hostile’ towards secondary patents for follow-on drugs, while 78% suggest that critics of secondary, follow-on drug development do not give sufficient recognition to the role incremental innovation plays in advancing medicine.

The European Commission’s continuing probe into anti-competitive practices is ‘concerning’ for drugmakers, with 89% of respondents arguing that taking full advantage of the rights afforded in law by the patent system should not be classed as anti-competitive and is legitimate commercial practice.

However, the European issue of predominant concern relates to EPO changes made to speed up the patent application process in Europe.

While 54% of respondents support the EPO's prioritisation of speed, 45% place greater priority on a slower and more thorough patent process, suggesting that the EPO may have misjudged the industry’s needs. 82% of respondents believe the measures will place a particular burden on smaller companies with more limited resources.

Criticism is also levelled at Europe’s patent term extension system (known as supplementary protection certificates, or SPCs), with 79% in favour of SPCs being widened to protect the underlying invention and thus afford exactly the same scope and protections as that given by a patent. The US system already provides such a level of patent term extension.

Dr Paul Chapman, partner at Marks & Clerk, said: ‘The relative favourability of the US environment for drug innovation is a familiar concern, but what is most worrying is that recent developments could help accelerate that trend. Not only does the US provide greater scope for patent extensions, but further reform is soon to be enacted which will improve patent quality and limit damages.

‘In addition, there is a clear fear that the gap in securing and exploiting innovation between the US and Europe may grow, and that future innovations in medicine needed to promote health may be compromised.’

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