Data exclusivity leads to pharmaceutical innovation, say researchers

By Alexandria Pešić

- Last updated on GMT

Related tags Pharmaceutical industry Clinical trial

A report claims that extended clinical trial data exclusivity would benefit pharmaceutical innovation, leading to over 200 extra drug approvals and to greater life expectancy in future decades.

Dana Goldman, lead author of the study, said: “Elected officials are unlikely to embrace legislation that would result in higher drug prices, but our research suggests that legislation to extend data exclusivity would spur innovation that would benefit future generations.”

When a pharmaceutical company brings a new drug to the market in the US, it is granted five years of exclusive access to the clinical trial data submitted during the approval process. A further three-year extension is then available if new applications arise and a six-month extension is fixed if the drug is approved for use in the paediatric field.

In 2007, the National Academies’ Committee on Science, Engineering and Public Policy urged to extend this ‘data exclusivity’ term to the longer 10 to 11 year period currently adopted in Europe.

Generic manufacturers, however, have argued their case for shorter limits, saying there should be a balance between innovation and competition, and claiming it helps them bring cheaper versions of drugs to patients faster.

Darius Lakdawalla, research director at the Schaeffer Centre at the University of Southern California (USC), commented: “Unfortunately, the health policy literature contains no information about the effects such a policy would have on innovation, population longevity and social welfare.”

Researchers of the study aimed to address the issue, estimating that extending the term of data exclusivity to 12 years would increase a drug’s lifetime revenue by roughly 5 per cent.

Higher life expectancies

They stated that there is “empirical evidence that profits drive drug innovation,” ​which would lead to an extra 228 drug approvals over the next fifty years and an increase of 1.7 months in average life expectancy.

John Romley, an economist with the Schaeffer Centre at USC, said: “Americans in the early 2020’s would bear the cost of increasing drug spending. However, people turning 55 in 2060 could expect increased life expectancy as a result of innovation in the interceding years – that is, new drugs brought to market because of lengthier data exclusivity.”

Critique of data exclusivity

Making the case for a shorter duration for data exclusivity, Alex Brill the former US House Committee on Ways and Means’ chief economist, and CEO of Matrix Global Advisers, argued that investors’ rate of return (or break-even point) for biologic therapies stands at less than nine years.

Brill maintains that “seven years of data exclusivity would be sufficient in maintaining strong incentives to innovate while fostering a competitive marketplace.”​ He assumes the break-even point should be regarded as an upper boundary for data exclusivity and not a guideline for the maximum duration of exclusive access to data.

“Just a think-piece”

A spokesperson for the European Federation of Pharmaceutical Industries and Associations (EFPIA) was also less than concerned by the findings of the recent study on data exclusivity, labelling the report “a think-piece from USC”.

He told in-PharmaTechnologist: “It will not impact the European regulatory environment. Indeed, it is unlikely to impact US data exclusivity in the foreseeable future, if at all.”

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