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Innovation Fact of the Week: US Leads World in Period of Data Exclusivity For Biologic Medicine Innovators

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(Editor’s Note: ITIF features an “Innovation Fact of the Week” in each edition of its weekly email newsletter and on Innovation Files.)

In addition to awarding patents to creators of novel biologic medicines, countries also mandate varying periods of intellectual property protection for the clinical test data on the drugs. This “data exclusivity,” as it is commonly known, helps ensure that creators of biologic medicines have sole rights for a certain period to all of the underlying IP necessary to make and market the drugs. Once the patent on the original compound expires, other manufacturers are free to produce similar drugs—and they are free to generate their own clinical trial data in the process—but, until the period of data exclusivity expires, they cannot use the original patent holder’s clinical trial data to prove the safety and efficacy of their new “biosimilar.”

This additional period of data exclusivity is important because it makes the economics of drug development work. It gives the innovator more time to market the drug and recoup the costs of developing it, which today can approach $3 billion for innovative biologics. The United States offers 12 full years of data exclusivity. European Union countries, along with Switzerland, offer 10 years of data exclusivity. In contrast, Brazil, India, Indonesia, and Russia, among others, provide no data exclusivity periods to protect IP rights related to biologic medicines.

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Photo Credit to Mo Riza

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About the author

Adams Nager is an economic policy analyst at ITIF. He researches and writes on innovation economics, manufacturing policy, and the importance of STEM education and high-skilled immigration. Nager holds an M.A. in political economy and public policy and a B.A. in economics, both from Washington University in St. Louis.