- Currently, pharma companies can receive five years of exclusivity for new drugs and 12 years for biologics.
- According to pharmaceutical managers, the R&D needed to obtain approval eats into the period of exclusivity and represents a substantial opportunity cost.
- The goal of the new proposed legislation is to encourage innovation and make it attractive to pharma companies to pursue R&D beyond only the most lucrative opportunities. The bill was co-sponsored by Sens. Orrin Hatch (R-UT) and Michael Bennet (D-CO).
Many pharmaceutical companies are avid supporters of the Dormant Therapies Act, as well as a similar bills introduced earlier in Congress. However, on the other side, detractors claim that passage of this bill will delay the introduction of cost-saving generics and push prices up due to lack of competition.
The critics claim that this is another way of supporting monopolies. But the fact is that innovation is crucial, as are affordable treatment options. The natural tension between these two worthwhile goals will probably never go away, but there has to be a solution that balances the two objectives.