We use the term “intellectual property (IP) protection extensions” to encompass patent/data exclusivity (DE), marketing exclusivity (ME), patent term adjustments (PTAs), patent term extensions (PTEs), and supplementary protection certificates (SPCs); all of which serve to increase drug developer revenues and hence private NPV, by barring generic competition and allowing companies to charge consumers and insurers higher prices for innovator drugs over a longer time period.
- Data exclusivity (DE) refers to a period of time during which generic competitors are barred from applying for market authorization on the basis of clinical data generated for the originator drug. Though it does not legally prevent generic competitors from generating their own evidence to obtain marketing approval, the resources required to do so are so considerable that data exclusivity acts as an effective market barrier.
- Marketing exclusivity (ME) refers to a period of time during which a generic equivalent cannot be approved by the FDA for market entry. It differs from data exclusivity in that competitors may not enter the market even if they seek approval using their own data.
- Patent term adjustments/extensions (PTAs and PTEs) and supplementary protection certificates (SPC) (in Europe) enable manufacturers to gain protection to compensate for time spent in the regulatory approval process. The SPC protection takes effect after the patent expires and applies to a specific active ingredient that has been granted marketing authorization. The period of protection is dependent on the length of time between patent filing and market authorization.
It should be noted that these exclusivities are likely to differ in their value to the drug developer because of how much additional time is given to exclusivity. However, it is not possible to distinguish among these different mechanisms within the developed analytic framework. Hence, all of these are combined under the generic umbrella of “intellectual property (IP) protection extensions” in our model. Further, not all of the above mechanisms are applicable to rapid point-of-care diagnostics and vaccines.