When Patents Are Not Enough: Data Exclusivity for Follow-On Biologics

Without a patent system and the temporary protection from competition by imitators it provides, developers of new drugs would have little prospect of collecting the profits necessary to motivate innovative research. And in the pharmaceutical industry, probably more than in any other, what most needs rewarding is postdiscovery research. There are sound reasons for thinking that modern biologics provide so many benefits from postapproval research extending over many years that exclusivity, whether provided by patents or data exclusivity provisions, should be at least as long as for small-molecule drugs. The social losses from providing for fairly long exclusivity periods (twelve to fourteen years) would be small compared to what are likely to be substantial social gains from exclusivity.

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