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The FDA has issued a policy that prevents Abbreviated New Drug Application (ANDA) approvals during the extended patent period. According to a new study, as a result of this decision for the next 17 years the American public will pay an estimated $6 billion in higher prices for 105 brand-name drugs because of GATT-induced delays in generic drug introductions [64]. Approximately 94 patents already extended under Waxman-Hatch will get new extensions. Capoten and Zantac will be protected until 1996 and 1997, respectively [65]. Clearly, this FDA decision represents a windfall to pioneer pharmaceutical companies. |
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Other intellectual property reforms have been suggested as cost-containment approaches. One suggestion is the use of a royalty system whereby drugs would be protected by copyright and licensed by a pharmaceutical company to other companies who wish to manufacture the same drug. This would require extensive changes to the copyright laws to enable pharmaceuticals to fall within the definition of copyrightable subject matter. While the effect this would have on U.S. R & D in unknown, a recent Government Accounting Office (GAO) report found that Canada's compulsory licensing program had a negative impact on Canadian R & D of pharmaceuticals [66]. |
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Approximately 1346 independent pharmacies in the United States in 15 states have filed separate lawsuits against 27 drug manufacturers, wholesalers, and mail-order pharmacies, claiming the industry has priced drugs on a discriminatory basis that has damaged competition in the marketplace resulting in higher prices. These suits also allege manufacturers are using patent violations to block normal market forces. The pharmacies are also arguing in favor of mandatory licensing [67]. |
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Conversely, in 1994 legislation was proposed that would have provided patent extensions and expedited approval to pharmaceutical manufacturers for products if they voluntarily submitted direct comparison studies. It was further suggested that the FDA certify these studies and disseminate them to health plans and practitioner groups via electronic bulletin boards and other means. Also, the Biotechnology Patent Protection Act, which has been winding its way through Congress in various versions since 1990, would prevent the importation of biotech products made outside the United States using a starting material patented in the United States. It would strengthen patent protection for biotechnology inventions and would have a beneficial effect on biotech new drug development. |
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4. Orphan Drug Act Amendments |
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The Orphan Drug Act of 1983 provided incentives to innovators conducting research on drugs with limited commercial value. The FDA's Office of Orphan Product Development lists some 350 different orphan drugs under development as of December 31, 1994 [68]. Currently, orphan drug designations are allowed for drugs with a patient population below 200,000 or no reasonable |
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