This is a continuation of the LPAR bringing you blog posts by our upcoming speakers at our State Convention on April 8th. This was originally posted at Liberty for All.
by Mary J. Ruwart
As a consequence of the increasing development times, new drugs often enter the marketplace with only a few years of patent life remaining. Consequently, manufacturers had to charge excessive prices for new drugs in order to make up their increasing research and development costs. To counter this trend, Congress passed the Waxman-Hatch Patent Restoration Act in 1984 to extend pharmaceutical patent life. Companies could recover up to half of the time lost to regulatory requirements, as long as their total patent life at time of marketing didn’t exceed 14 years. (Patents generally expire 17 years from the time of issuance or 20 years from date of patent filing, whichever is later.)
The Act estimated the “regulatory review time” as the number of years of clinical testing and FDA evaluation. When the Act was passed, the regulatory review time accounted for about 84% of drug development time. About two-thirds of the regulatory review time could be directly attributed to the 1962 amendments.
As a research scientist in drug discovery and development at the Upjohn Co., between 1976 and 1995, I was quite aware of the impact of increasing regulatory demands on drug development time. My colleagues and I joked that we spent so much time fulfilling the regulations that we had no time to discover new drugs to treat disease! However, as we’ll soon see, it’s no laughing matter: it’s a matter of life and death!
In 1992, the Prescription Drug User Fee Act was passed. This Act allowed pharmaceutical firms to pay “user fees” of hundreds of thousands of dollars to the FDA. The agency would then hire new examiners to expedite their review of the company’s new drug application. This process shaved about a year from the drug development process. As you can see from Figure 2, had this legislation not been passed, drug development times in the 1990s would have more than 15 years-greater than three times the average development time prior to amendment passage!
© 2005 by Mary J. Ruwart – This is a serialization of Dr. Ruwart’s 2005 special report entitled “The Deadly Secret Behind Soaring Pharmaceutical Prices.”
Mary J. Ruwart, Ph.D., is the author of Healing Our World, a liberty primer for liberals, Christians, New Agers, and pragmatists. She also wrote Short Answers to the Tough Questions: Sound Bites for the Libertarian Candidate after her Internet column (www.self-gov.org) of the same name.
