How do drug patents work?

Drug patents are like all other patents — they protect “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof…” (USPTO.gov).

Note that patents do not give you the right to sell or use an invention — only to block others from doing so. Accordingly, prior to receiving marketing clearance in the United States drugs must be proven safe and effective and pass review by the Food and Drug Administration (FDA).

Vietnam patent

While advocates for open access often feel that patents impede innovation, proponents of patents counter that patents enable people and companies to offset the risk and expense of drug development by providing them with temporary monopolies.

It is a bit of a chicken-and-egg scenario — no patents might mean that there would be no innovative drugs, but excessive patent protection could mean that drug companies would charge unaffordable prices.

There are several measures to maintain a balance (the deeper you dig into this area the more you’ll find). Firstly, healthcare payers have caps on how much they will reimburse drug companies for their drugs. So, the high prices which are often cited are really just the retail price and not the final negotiated price. Also, the FDA incentivizes generic companies to prove that drug patents are invalid, giving them six months of generic exclusivity.