LAST YEAR the drug industry almost persuaded Congress to grant longer patent protection on its products to compensate for time lost in testing and review by the Food and Drug Administration. Next week the industry will renew its efforts when the Senate Judiciary Committee reconsiders the issue.
Opponents of the legislation contend that longer patent lives mean higher consumer costs, since generic drug companies cannot copy drugs until their patents expire. But the toughest competition for drugs often comes not from generic copies but from new and better drugs--something patents can't protect against. If longer patent lives stimulate more drug discoveries, as drug companies contend, consumers may benefit more than they would from earlier price competition on older drugs.
The drug industry is far from unprofitable. But the companies point to a slowing in drug innovations--although many recent drugs have been more important breakthroughs than their more numerous predecessors. They portray increased foreign competition as a threat to an industry that benefits the public. Government-required testing for safety and efficacy has certainly raised the cost of marketing a drug and often reduced a company's opportunity to recoup its investment by using up several of the 17 years of patent protection. But how much compensation for government intervention is warranted?
The drug companies would like patent lives extended by the time that elapses between the first human testing (or the initial application with FDA if that happens first) and the granting of marketing permission. Makers of pesticides and toxic chemicals are seeking similar benefits under the same bill. This request, however, implicitly and wrongly assumes that without government regulation, companies would market drugs with no testing at all. Only last week, for instance, a major drug company decided to withdraw a pregnancy drug from the market not because of FDA orders but because of hundreds of lawsuits alleging that the drug caused birth defects.
Time lost to government review may be only a small part of the total time that it takes to get a drug or chemical to market. Companies might even choose to delay reviews when, for example, they can benefit by holding off the market a product that might compete with other of their own products--a tactic for which they should not be compensated. Nor is there any point in extending patents on products already under review since no further research incentive is needed.
Adequate testing is clearly an essential part of marketing potentially dangerous drugs and chemicals. What Congress must decide is what amount of extra patent compensation can be justified--and what safeguards are needed--to encourage innovation and ensure adequate testing without inviting abuse. That answer may well be different for drugs than it is for toxic chemicals and pesticides.