Qualifying Intellectual Property I: Harmonized Measurement of New and Follow-On Drug Approvals, Patents and Chemical Components

Ron A. Bouchard, University of Manitoba

Abstract

The purpose of this study was to develop a harmonized method to collect, compare and quantify regulatory approval, patenting and chemical data from multiple cohorts of new and follow-on drugs. The range of drugs studied encompassed all drug classes enumerated, described and prioritized by drug regulators in developed nations, with a specific focus on Canada. A related purpose was to address uncertainty in the pharmaceutical innovation literature regarding approval nomenclature, such as whether certain drugs should be called new or follow-on, follow-on or Me Too, and whether the Me Too and First in Class designations refer only to drugs approved via the new drug approval route or should also refer to drugs that are line extensions. In total, 2,087 drug approvals, 5,011 patents and 130 chemical components were analyzed. Drugs approved via new drug, line extension (or “supplemental”), and generic approval routes were studied. The first major observation was that the greatest fraction of all approval, patenting and chemical indicators were associated with line extension drugs generally and line extension Me Too drugs in particular. Conversely, the smallest fraction of all three indicators observed was in relation to the most innovative drugs class identified. The second trend is in relation to drugs in classes other than the Me Too class. As one moved from approvals, to patenting, to chemical components, an increasing fraction of all indicators studied, particularly for the most profitable drugs, was associated with drug products going through some form of expedited review or drugs containing a new active substance (also referred to as a new chemical entity). Thus, while brand firms are putting most of their effort into developing line extension and Me Too drugs, therapeutic products moving through expedited review and drugs with a new active substance designation are also attracting significant drug development activity. Third, the percentage of most innovative approvals, patents and chemicals was limited for each indicator by the comparatively lower number of drugs that were First in Class, especially in the new drug category. This result suggests that a focus on new drugs that are First in Class would be an efficient way for brand firms to increase the level of innovation in their pipelines. The same conclusion applies to government incentives for drug development, including both patent and regulatory rights incentives. Fourth, the level of innovation increased steadily as one moved from drug approvals to drug patents and chemical components. This result suggests that the rank order of functional utility of indicators studied is chemicals > patents > approvals. Having said this, only approvals and patents demarcate the boundaries of legal protection for pharmaceuticals. A surprisingly large number of generic approvals, patents and chemical indicators was observed across cohorts. This result suggests that generic firms are accruing greater number of approvals, patents and chemical components than may have been previously recognized. The data also support the conclusion that generic firms are following the lead of their sister brand firms by creating clusters of related products and patents. A final consideration was to provide data for the qualitative innovation index for pharmaceutical patents and products described in the companion paper.