27 September 2021

World Pharmacists Day 2021: IP in the pharmaceutical industry

Through years of education and hands-on experience with clients, our team of patent and trade mark attorneys have built expertise in all areas of intellectual property (IP) in the pharmaceutical sector. To celebrate World Pharmacists Day (25 September 2021), Mathys & Squire is assessing the impact and distinctiveness of IP in the pharmaceutical industry.

IP increases company value

One way to protect intangible assets and IP is to obtain patents, which can be used to prevent infringements, as well as boost innovation and drive research and development (R&D). Patents bring reassurance to investors that an invention can be commercially successful, and that the company has exclusive monopoly in relation to a particular product. Specifically, in the pharmaceutical industry, an effective IP strategy provides businesses with confidence that, subject to marketing approval, they will be able to market the drug. This can drive further motivation and importantly, investment. The majority of pharmaceutical company’s value is wrapped up in its patent and trade mark portfolio, so a robust IP strategy is vital to its success.

Use of supplementary protection certificates to extend a patent’s validity

Most patent applications are filed during the R&D stage, so obtaining a patent also gives pharmaceutical companies the space and time needed to develop medicinal solutions and enter clinical trials, without the risk of any associated disclosures preventing them from obtaining a patent. This enables businesses to invest in the long-term, complicated, and risky process of developing medicines, as they have legal measures in place that prevent third parties from using their invention for 20 years.

Another aspect that impacts IP in pharmaceutical companies is the lengthy drug development process and complex requirements to obtain marketing authorisation. With inventions being patented very early on in the R&D process, drugs often make it to the market with only a few years of patent life remaining. Once their drug(s) have made it to market, pharmaceutical companies must also adhere to The Association of the British Pharmaceutical Industry (ABPI) Code and disclose full details of the chemicals used in a particular drug, which makes the invention vulnerable to copying by competitors when the patent expires. This poses a problem as a patent’s remaining validity may not be long enough to bring a return on the investment, and as a direct response to this, legislators have introduced supplementary protection certificates (SPCs). This IP right has the power to extend a patent’s validity by a maximum of five years and is therefore very popular amongst pharmaceutical companies.

Patents give price setting freedom

IP in pharmaceutical companies is also crucial when it comes to setting the price for a drug. A patent grants a temporary monopoly on an invention, meaning the inventor can charge higher than normal prices, as there is no competition in the market. However, once the patent loses its validity, competitor generics may enter the market, typically at much lower prices. Protecting intangible assets and IP has a direct impact on a business’ profitability, so having a team of experienced patent and trade mark attorneys offering advice is key to a company’s success.

The patent application drafting process gets more complex

Drafting a patent application can be challenging as it can require a lot of detail to convince Intellectual Property Offices that an invention is different from anything else already on the market – i.e. that it is inventive – and at the same time provide enough technical detail for somebody to ‘work’ the invention. Initially, a patent application may be filed with some details omitted, but it is normally advisable to incorporate as much detail (and experimental support) as possible during the first 12 months from filing. Timing is critical because no new information can be added to a patent beyond the 12-month stage. As the full drug development process can take up to 15 years, it is challenging to anticipate the final results of that research phase in the first 12 months. More than likely, there will also be multiple pharmaceutical companies trying to fill the unmet medical demand with their own inventive molecules, which makes it much more difficult to differentiate the proposed offering from existing drugs or patent applications. For these reasons, it is crucial for a pharmaceutical company to have a secure invention capture process in place and to keep accurate lab book notes to allow for effective patent filing.

It is widely recognised that IP rights are essential, especially for pharmaceutical companies, to allow for continued innovation of new medicines. Thanks to the pharmaceutical revolution, people have a longer life expectancy, better life quality and improved comfort of living. Mathys & Squire is pleased to celebrate all pharmacists this World Pharmacists Day, and in particular, our innovative clients in the pharmaceutical industry!