Globalization in the pharmaceutical industry: Where are drugs invented?

I’ve just had a paper published in Nature Reviews Drug Discovery, using data from DrugPatentWatch to profile the locations of drug invention for the past decade.

The location of drug development is important for two reasons. Firstly, it is important to track the global spread of innovation. Much late stage drug development (e.g. clinical trials) and manufacturing have moved to lower wage-cost countries, but trends in the location of invention has not been clearly described. Knowing where drug invention is occurring can help streamline drug development by identifying ideal locations for research facilities. Secondly it is important to know where invention is occurring, because that may affect which drugs are developed. Early-stage research funding and, by extension, the research itself, is likely to be focused on conditions affecting the countries in which these activities are occurring. For example, research in the United States might focus on conditions such as heart disease and stroke, whereas research in Japan might emphasize stomach cancer.

By examining the patents covering drugs developed over the last decade, I was able to ascertain the locations of the inventors. Focusing on inventors is important because it gives a clear indication of where the control of the invention was located. Patents are required to list the names and locations of the individual(s) who maintained intellectual domination of the invention. Failure to list all inventors, or listing too many inventors, can yield an invalid patent. Whereas one might consider assessing globalization of invention by focusing on the location of the company funding the research, or the company listed on the patent, these strategies are flawed. The company funding the research may not be the same company which conducted the research (e.g. Japanese companies funded many of the early US biotechnology companies, but the inventions occurred in the US by US researchers, so focusing on the funder might produce the incorrect conclusion that the innovation was Japan-based), and many companies have facilities in multiple countries, making it impossible to determine in which of the countries an invention might have occurred. Looking at the company listed on a patent is also flawed. The company listed on a patent might not have been the company that housed the researchers or, even worse, it may be a tax shelter based in a country where no invention occurred. So, by focusing on the locations of the listed inventors it is possible to determine where the invention occurred. An additional benefit of this strategy is that it enables inclusion of patenters from numerous countries. For example for a patent listing one US-based and two Canadian inventors, the US would be given 1/3 credit for an invention, and Canada 2/3 credit.

So, what did I find? In short, the US and the legacy pharmaceutical countries in Europe (United Kingdom, Germany, Sweden, France and Switzerland) have been responsible for the bulk of new drugs invented over the past decade, and there is no indication that this dominance is waning. Emerging economies such as India and China were largely absent. For more details, please see the paper at Nature Reviews Drug Discovery: Location of pharmaceutical innovation: 2000–2009.

You can also get more detailed information on the complete set of drug inventors and where they live in my Global Drug Patent Inventor Report and Individual Country Drug Patent Inventor Reports.

What do you think of the findings? Are you surprised? Do you disagree? Sound off in the comments.

Drug Patent Challenge Report

I’ve posted a new Drug Patent Challenge Report at thinkPharm.com.

This new report complements the Drug Patent Inventor Report and Orphan Drug Report and profiles the companies that successfully challenged pharmaceutical drug patents.

The Drug Patent Challenge Report includes:

• A list of the companies with the most successful patent challenges
• A list of all the drugs for which each firm successfully challenged a patent
• A list of all the companies that have received FDA approval for each listed drug

Report highlights:

• More than 60 companies profiled
• More than 80 drugs profiled

A preview of the report is also available.

Do you need any other pharmaceutical drug and patent reports? Let me know.

India, Intellectual Property and Biotechnology Industry

This is a guest post from BiotechBlog reader Viren Konde. Do you have a response to Viren’s post? If so, you may respond in the comments section below.

The recent editorial on “Intellectual property and biotechnology innovation: To protect or not protect” by Dr Yali Friedman, Managing Editor of the Journal of Commercial Biotechnology was thought provoking and led to this write-up. The editorial emphasized on the intellectual property protection differences between the developing and developed countries, and their drug manufacturers on the issues of patents, price controls, and research & development investments in the biotechnology sector. The remarks indicate that, the developed countries, being the ‘technology producer’ have favored strong intellectual property protection to motive the innovation and apparently the trade; while the developing countries being the ‘technology consumers’ have exploited the benefits of it at much lower cost by building a weaker intellectual property protection system.

Although it is logical that all countries, whether, developing and developed, should offer the strongest intellectual property protection possible, it is believed that, there are no legal definitions of “developed” and “developing” countries. The WTO members have announced for themselves whether they are “developed” or “developing” countries, with an open option to challenge the decision of a member to make use of provisions available to the developing countries. It was also believed in the agreement that the developed countries need maximalist IP regimes, as they are highly innovative and strong IP regimes provide the requisite incentives in this regard. On the other hand, developing countries require minimalist IP regimes, as they are hardly innovative and are often net importers of technology. These norms have also formed the basis for the 1970’s Indian Patents Act for the ‘developing India’. The amendments to Indian Patent Act in a timely fashion [Indian Patent (Amendment) Acts of 1999, 2002, and 2005] have driven India to ‘innovative (Product Patents) regime’ in its intellectual property policy.

Today, although, India continues to remain a “developing” country; it is also considered a ‘technologically proficient’, and therefore as an innovative developing country. Therefore, in the present times, the older definitions of intellectual property based on the differences between developed versus developing countries can not relate to India. Some developing countries like India are more scientifically advanced than others as a result of decades of investments in education, medical infrastructure, and manufacturing capacity. India hosts more drug manufacturing facilities that have been approved by U.S Food and Drug Administration than any country other than the United States. India’s biotechnology industry is managing to position itself on the strength of contract research, clinical research and contract manufacturing services together with the sales of off-patent biologics in the local as well as lightly regulated markets in the Middle East, Africa and Asia.

Unfortunately, India’s patent regime does not appear to be satisfying to the developed world given that India, though “technologically competent” in certain technology sectors like software and pharmaceuticals have not yet witnessed any significant levels of “innovation” in the biomedical utility sectors like biotechnological products and processes. Recently, the US-based Biotechnology Industry Organization (BIO) criticized India’s patent law and the Office of the US Trade Representatives kept India (and some other countries) on the USTR’s “Priority Watch List” in order to bring India’s patent law more in line with Western IP protections. Clearly, there are some issues and concerns that need clarification and that will be discussed here, such as the patentability criteria under section 3(d), and the provision of compulsory licensing in the Indian Patent Act; the price control and the cost difference of the innovator verses generic biotechnology drugs; the TRIPS mandate on clinical data protection and exclusivity; and also the pre- and post-grant patent opposition provisions used by Indian biogeneric manufacturers.

- Viren Konde