Michael Hsu, Ali Thaver and Gerard Anderson*
Pharmaceutical companies are given a market exclusivity period that does not vary based on the level of research and development (R&D) or the profits earned. The main purpose of this period is to protect the intellectual capital invested in a product allowing the inventor sufficient time to recoup the R&D costs and to be able to earn a profit. Currently, only 2 in 10 marketed drugs are profitable and drug companies earn substantial profits on only a few blockbuster drugs. As a result, there are many neglected diseases and drug companies charge very high prices for these few profitable drugs. These high prices can restrict access; for example, less than 10% of people with hepatitis C receive the appropriate drug primarily because of its high cost. A variable length market exclusivity period that takes into account a drug’s R&D cost (including the cost of all related products) and profits would provide greater incentives to invest in total R&D, R&D for a wider range of diseases and result in lower prices for expensive specialty drugs leading to greater access.
