Glaxo Decision Moves Drug Development Forward Again

Implications: The USPTO’s proposed rule changes, struck down in this important Glaxo federal court decision, would have added significant burdens to pharmaceutical companies in developing their IP portfolios and ultimately their drug treatments.   The proposed changes were seemingly motivated to make the patent application process run better by creating leaner applications and limiting continuations. However, the downstream result would have seriously hurt the development of new drug treatments, adversely impacting smaller biotech, academic settings, and big pharma.   The federal decision, while clearly favorable to the pharmaceutical business as a whole, will also be beneficial for making better medical treatments available.

Analysis: Intellectual property forms the basis of drug development for medical illnesses.  While it is possible to bring a prescription drug to market without patent protection – there is a period of ‘marketing exclusivity’ for FDA approved drugs – many drugs recoup their development costs (as well as costs associated with the failures a company may suffer too) while patent protected but out of the FDA’s marketing exclusivity.   Incentive to create new and better medical treatments has a strong basis in whether that is financially viable which, obviously, is enhanced with patent protections or a better opportunity to get there.   

Narrowing claims, as was proposed by USPTO, would have limited just how much could be included in the patent but restricting continuations/requests for continued examination would have badly damaged the ability for innovators to protect their inventions.   Such continuations are a way to defend the patent through its examination.  It is not hard to see the repercussions if the USPTO changes were left to stand.   Early stage biotech companies, now a vital springboard to innovative treatments, would have become less attractive to potential investors; larger pharmaceutical companies might have abandoned important clinical platforms not having another chance to file for continued applications.  The federal court’s decision helps dampen some of the risk to drug development, itself highly risky, and ultimately helps advance medicine.