How Many Patents Does It Take To Make a Drug? Follow-On Pharmaceutical Patents and University Licensing

Abstract

Patent commentators often base their discussions of pharmaceutical patents on the assumption that each drug is covered by a single patent, but there has been little analysis of how many patents it takes to make a drug. Most drugs are actually protected by multiple patents: the average was nearly 3.5 patents per drug in 2005, or over five patents per drug for the best-selling pharmaceuticals. Using a dataset of all small-molecule drugs approved by the FDA from 1988 to 2005, this Article undertakes an empirical study of what factors influence the number of patents per drug. The growing number of follow-on patents has important implications for patent policy in general, but it has a particularly significant effect on socially responsible licensing efforts by universities - policies focused on increasing access to medicines based on not patenting in developing countries will be insufficient if pharmaceutical companies file follow-on patents in those countries. Although these data show that university drugs actually have fewer private-sector follow-on patents than drugs with no university connection, over half of university drugs still have private-sector patents. Universities will thus need proactive licensing terms to prevent follow-on patents from blocking access to their drugs.

Keywords: pharmaceutical, patent, Hatch-Waxman, Bayh-Dole, licensing, empirical

JEL Classification: O34, L65