Celebrating IP Month: Protecting the Ideas That Power Medical Innovation

By: Dan Leonard, Executive Director, We Work For Health

Every new medicine starts with a scientist’s good idea. But turning that idea into a medicine takes years of research, investment, and trial and error.

During Intellectual Property (IP) Month, we recognize how IP protections have helped make the United States a global leader in life sciences — and why preserving them matters for the breakthroughs still to come.

For decades, America’s approach to intellectual property has encouraged innovation while supporting competition and patient access. IP protections help make risky journeys possible. They prevent rivals from immediately copying researchers’ promising lab discoveries. That gives biotech companies and their investors the confidence to fund the years of research needed to turn those experimental treatments into FDA-approved drugs that patients can rely on.

Consider the Hatch-Waxman Act. Passed with bipartisan support in 1984, the law guarantees new medicines a certain period of regulatory exclusivity, while also streamlining the regulatory pathway for lower-cost generics to reach patients.

By striking a balance between the need to incentivize novel drug research and the need to ensure that cheaper generics can come to market swiftly once IP protections have expired, the law has given American patients the best of both worlds.

Today, America invents the plurality of the world’s new drugs. But we also boast the highest rate of generic drug use in the developed world, with more than 90% of prescriptions in the United States filled with generics, compared with just 19% before Hatch-Waxman. Lower-cost generics and biosimilars have saved the U.S. healthcare system an estimated $2.9 trillion over the past decade.

Maintaining this balance requires clear and predictable rules.

One important part of the Hatch-Waxman framework is the FDA’s Orange Book, which identifies certain patents associated with approved medicines. The system gives generic manufacturers notice of outstanding patents that a follow on drug might infringe upon. This advance notice helps avert patent disputes and infringement lawsuits before they even begin.At least, that’s the theory. In practice, some drug developers are facing conflicting signals over patents covering drug-delivery devices and risk evaluation mitigation systems. The Food and Drug Administration has not clearly said whether those patents should be listed in the Orange Book, while the Federal Trade Commission has challenged hundreds of listings it claims are improper.

We Work For Health has called for greater regulatory clarity so innovators know which patents they are required to list while preserving the transparency that generic manufacturers rely on.

Those debates come at an important moment. Global competition in the life sciences is intensifying as other countries strengthen their biotech industries and compete for research, investment and scientific talent. The choices policymakers make today will help shape where the next generation of medical breakthroughs happen.

National IP Month gives us an opportunity to celebrate America’s extraordinary record of innovation — and explore the policy reforms that can continue that record for decades to come. Stay tuned for additional content throughout the month of October.