Transcript Document
1 Intellectual Property in the Innovative Pharmaceutical Industry *** June 12, 2006 Gregg C. Benson Assistant General Counsel – Intellectual Property 2 About Pfizer • Our business - discover, develop, manufacture and market leading healthcare products • Our goal – to make products that improve the quality of life. We want to enable lives that are longer, healthier and more productive. • Three business segments: • Human health • Animal health • Consumer health 3 Pfizer Research & Development Infection Diseases Cardiovascular Oncology Allergy & Respiratory Gastrointestinal & Hepatitis Metabolic Diseases Central Nervous System Pain Inflammation Sexual Health and Urology Immunology 4 Politics of healthcare The ideal world: • Unlimited resources • Unlimited healthcare access • Unlimited new health discoveries • Unlimited new medicines to treat diseases 5 The real world • Resources are not unlimited • Each new medicine is expensive to develop • How expensive? $860,000,000 6 Bringing a new drug to market • $860,000,000 • 12-15 years of R&D • High likelihood of failure 7 Drug discovery and development in cerebro in silico in vitro in vivo in homo 8 The R & D process Phase III Phase II Phase I 9 New drug development – A risky and expensive proposition Compound Success Rates by Stage Years 0 Discovery (2–10 Years) 7,000,000 Screened 2 4 Preclinical Testing Laboratory and Animal Testing 6 Phase I 20–80 Healthy Volunteers Used to Determine Safety and Dosage Phase III 1,000–5,000 Patient Volunteers Used to Monitor Adverse Reactions to Long-Term Use 8 10 12 14 Additional PostMarketing Testing Phase II 100–300 Patient Volunteers Used to Look for Efficacy and Side Effects 1,000 Enter Preclinical Testing 6 Enter Clinical Testing FDA Review Approval 16 1 Approved by the FDA Net Cost: $860 Million Invested Over 15 Years Source: Tufts Center for the Study of Drug Development 10 Attrition Complex Disease Targets Not Sufficiently Selective Too Long in Body Most Adverse Reactions Compounds Unsafe Do Not Become Unstable Poor Absorption Low Levels in Body Not Effective Enough Medicines Side Effects Competition Impractical To Make 11 Intellectual property protection With such high costs and risks, how does a company like Pfizer stay in business? Intellectual property 12 Patent protection is limited Exploratory Development Discovery Phase Phase I II Full Development Phase III year 0 5 10 15 Idea Drug P 20 year patent term 13 What happens when patents expire? • Generic products enter the market • To survive, we need new products 14 What happens when patents expire? Initial Patent Expires Sales income File Patent 5 R&D costs Discovery Phase 10 Development Phase 15 20 25 30 Years Shearson/Lehman Report 15 Comparison to generic industry Generic Innovator • Cheap R & D • Expensive R & D • Low risk of failure • High risk of failure 16 Data exclusivity End result of R&D effort -- DATA Value? 17 Data exclusivity • Health authorities require submission of pharmacology, toxicology and clinical trials data • These data are secret, confidential and belong to the company 18 Data exclusivity – TRIPs Agreement • TRIPs Agreement requires that data be protected • Protection from: Disclosure to others Reference by generic companies (limited time) TRIPs = Agreement on Trade Related Aspects of Intellectual Property Rights 19 Data exclusivity - EXAMPLES For the following hypothetical examples: • Company wants to develop a compound into a medicine to treat a disease • Patent protection for the compound is not available 20 Data exclusivity HYPOTHETICAL EXAMPLE 1: COUNTRY THAT PROTECTS DATA Data Exclusivity Expires Drug Approval Sales income 5 R&D costs Discovery Phase 10 Development Phase 15 20 25 30 21 Data exclusivity HYPOTHETICAL EXAMPLE 2: COUNTRY THAT DOES NOT PROTECT DATA Generic Drug Entry Approval Sales income 5 R&D costs Discovery Phase 10 Development Phase 15 20 25 30 22 Summary • Every medicine will one day be generic • A healthy innovative pharmaceutical industry is necessary in order for there to be a generic industry • Without a healthy innovative industry there will be no new medicines: •Not for us •Not for generic companies •Not for our children