Report: Patent Law Stifles Drug Innovation

December 20, 2006

A report by the General Accounting Office concludes that current patent law discourages drug companies from developing new drugs by allowing them to make excessive profits through minor changes to existing pharmaceuticals.  While pharmaceutical research and development expenses have increased by 147% since 1993, applications for approval of "new molecular entity" (NME) drugs, or drugs which differ significantly from others already on the market, have risen only 7%.  According to the report, the majority of newly developed medicines are so-called "me-too" drugs, which are substantially similar to existing drugs, are less risky than NMEs drugs to develop, and which "offer little in the way of therapeutic breakthroughs." 

Under existing patent law, these "me-too" drugs can receive new patents separate from the already existing drugs they are based on, allowing drug companies to make substantial profits without signficantly enhancing the quality of drugs available on the market.  According to the report, "the ability of drug manufacturers to easily obtain patents for minor changes to products, or to receive patent exclusivity for new uses of existing products, have reduced incentives to develop new drugs."

Commenting on the report, Senator Dick Durbin (D-IL) said that existing patent law allows drug companies to drive up their profits at the expense of patients needing innovative treatments.  "The findings in this new GAO report," said Senator Durbin, "raise serious questions about the pharmaceutical industry claims that there is a connection between new drug development and the soaring price of drugs already on the market.  Most troubling is the notion that pharmaceutical industry profits are coming at the expense of consumers in the form of higher prices and fewer new drugs."

In his own statement on the GAO report, Senator Edward Kennedy (D-MA) touted a bill he has co-sponsored with Senator Mike Enzi, which would provide grants to scientists focused on developing innovative drugs.

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