Patent Protection on Clinical Research: The Primary

¶ … Patent Protection on Clinical Research: The Primary Sources of Innovation in the Drug and Device Development Process

When it comes to biopharmaceutical research, the United States is the best country in the world and it is currently the largest pharmaceutical market. It has invested immensely in research and development, especially in the biopharmaceutical sector, and it holds numerous intellectual property rights for a majority of the drugs developed. According to the U.S. Food and Drug Administration, FDA (2014), all drug companies have to seek the organization's approval before they sell new drugs, and these drugs have to be tested accordingly to guarantee the safety of the public. Adherence to these requirements often makes markets increasingly competitive and in the recent past, the increasing demand for innovation in pharmaceutical companies has necessitated new approaches to be applied in the drug and device development process. This is particularly because pharmaceutical companies have a hard time trying to cut costs and at the same time maintain the quality of new drugs, as well as come up with innovative products. As a result, companies have had to re-examine the methods they apply in the discovery of new drugs, their development, and the marketing of new products, and to evaluate whether their management tactics are still effective in today's society. This text takes a look at the impact some factors, such as patents, have on innovation and discovery in research, and why biotech startup companies and university research companies are giving pharmaceutical companies a run for their money.

Discussion 1: If there were no patents to provide exclusivity to a company that produced pharmaceuticals, what would be the effect on innovation and discovery?

Due to the competitive nature of the markets, intellectual property rights are essential because they allow innovative investors to capitalize on their inventions. Patents allow them to own these inventions and they can acquire quasi-rents that enable them to recover the money they used in the research and development process, which often acts as an incentive to encourage further research. The impacts of patents on research are contradictory. On one hand, they encourage much needed innovation in clinical research and lead to increased research and development. Further, the motivation they accord the researchers leads to new products being discovered and, hence, improved medical care (Gold et al., 2009). On the other hand Gold and his team claim they have been accused of hindering follow-on research because researchers do not have access to research materials and information, and they also result in high costs for newly discovered drugs.

If there were no patents, researchers would have an easier time accessing patented materials that would be great contributions in the research process, which would lead to the advancement of clinical research. On the part of the innovators, the lack of patents would be detrimental. Pharmaceutical companies would lose their ideas to competitors and they would not be able to gain royalties that help them earn a return on their investments. There would also be reduced stimulation for research and development, a decline in new products developed and less motivation for further discoveries. All these would compromise the overall quality of medical care.

Discussion 2

a) Why have biotech startup companies and university research facilities become the primary sources of innovation in the drug and device development process today?

Although biotechnology has been around for the past 30 years, recent developments have made this sector one of the most sought after businesswise. Today, pharmaceutical industries are often associated with the words 'bureaucratic' and 'enormous'. Biotech startup companies and university research facilities are preferred due to their small size. They are easier to manage and they raise funds more easily than larger pharmaceutical companies. Decision making is also easier due to their smaller size, they are more agile and collaboration is easier, which is essential for the development of high quality products. Due to their large size, pharmaceutical companies are often required to simultaneously cut costs and come up with quality products that will be of benefit to consumers. University research facilities and biotech startups do not have to deal with bureaucracies, as they can easily balance innovation, costs, and implementation of discoveries. The young fresh minds in these smaller institutions also come up with more creative and innovative and they are more 'techno savvy'.

b) How does the funding of studies by biotech startups differ from that of large pharmaceutical companies?