Over the past years, and as a response to the financial crisis in Europe, the pharmaceutical sector has felt the squeeze of cuts in healthcare spending. Not only have pharmaceutical companies had to re-adjust to the new market conditions, they have also been under the close scrutiny of the European Commission amidst claims of excessive profit generation from so-called blockbuster drugs. As the pressure on prices rises, the debate persists on how to ensure a viable business model that promotes access to medicines as well as innovation, in areas of unmet medical need.
Patents are designed to allow a temporary period of exclusivity on any invention that is new, inventive and susceptible of industrial application. It is a way to recoup the costs of development and of the inevitable and numerous failures that occur along the innovation process. With the upcoming Unitary Patent, which will guarantee supranational protection for inventions in 26 countries across Europe, the subject of patent protection has regained momentum. On 28th October 2015, the European Commission presented a Communication on “Upgrading the Single Market” which touched upon patent protection and the Supplementary Protection Certificate (SPC). SPCs are intended to provide the patent holder with up to five more years (with an additional six months for a paediatric indication) of protection for the erosion of patent protection suffered due to the extensive regulatory process leading to the grant of a marketing authorisation. The Commission declares it will work on concrete, SME-friendly intellectual property rules, and will take the final steps needed for the consolidation of the Unitary Patent. It plans to address both the uncertainties over how the Unitary Patent, SPCs and national patents will coexist and the need for ever more regulatory efficiency. However, the Communication makes no reference to the controversial issue of whether there will be an SPC waiver for SMEs in the context of the Unitary Patent system.
Intellectual capital deserves to be valued and protected in a way that encourages even further research and innovation to stimulate breakthroughs. Inventions consistently bring societal benefits and generate greater competition which will inevitably draw prices down. The increasingly complex and expensive nature of drug discovery and the calls for more research and development in areas of unmet needs, anti-microbial resistance for instance, requires a solution to the challenge of striking the right balance between the need to provide incentives for innovation and that of ensuring greater access for patients.
Andrea Barona Valladolid is Consultant in FTI Consulting’s healthcare team in Brussels