Intellectual Property
In 2007, the pharmaceutical and biotechnology industries spent well over $58
billion on the research and development of pioneering new products (www.phrma.org).
The intellectual property system drives innovation in a market-based society
by providing incentive for the discovery and development of new medicines and
technologies. Without the protection of this system, there would be little to
no innovative medical solutions for patients to access because companies would
be unable to sustain the billions of dollars of investment in medical research
and development – $2.5 billion by Abbott alone in 2007.
The intellectual property system rewards scientists and inventors by
providing a set period of time during which others are not permitted to copy a
new discovery or creation. In exchange for this period of legal protection of a
new invention, patent laws require that the inventor disclose the new knowledge
used in that invention. Others can build upon that disclosed knowledge to
advance future innovation. The patent system effectively balances the societal
goals of both inventor and consumer, encouraging innovation and providing
public access to the new technology. We are committed to using the patent
system responsibly and to registering our products locally to ensure that we
are making our products accessible to patients.
Periodically there are challenges to intellectual property protections,
whether Abbott's or those of other scientists, inventors or health care
companies. Recently, governments have used compulsory licenses to circumvent
intellectual property protections. Compulsory licenses permit others to copy an
invention during a set period of protection. This is done in an attempt to
encourage the marketing of alternative or "generic" drugs and to
generate greater competition in an effort to lower the price of medicines.
However, compulsory licenses fail on several counts. For one, the licenses
do not always lead to generics entering the market. Many drugs are complex
molecules that are not easy to duplicate. Generic manufacturers may find that
making such complex molecules is costly and still not worth the investment,
even though they are not investing in the research and development of the drug
to begin with. Thus, under several circumstances licenses issued to generic
manufacturers have failed to result in a marketed product by any licensee.
Second, when generics do enter the market, they are often not well regulated
and can be of poor quality. Sometimes copies of new medicines are ineffective
at treating the disease or even dangerous to the patient. In some extreme
cases, generic medicines are believed to have caused resistance to more
effective medicines, forcing patients to explore alternative treatment regimes.
This also makes treating local epidemics such as HIV/AIDS more difficult.
Finally, generics are not always sold at a lower price than branded drugs.
For example, in Africa and less developed countries around the world, our
protease inhibitor is the lowest priced drug of its kind.
In addition to these contradictions, compulsory licenses are a disincentive
to investment into ongoing innovation and they erode the promise of future
health care advances.
"With patent laws, governments intervene in the
marketplace to provide incentives for innovators to invest their know-how, time
and money into the creation of inventions. Without market intervention,
investment in knowledge-based innovation may be unjustifiable because there is
great risk that a competitor will appropriate the invention with modest, less
risky investment. Innovative drugs are especially susceptible, for turning a
prospective chemical compound as identified in the laboratory into a drug that
may be distributed in the public health system requires many years of computer
modeling, laboratory testing and, finally, comprehensive testing in clinical
trials. This process results in a body of data that provides the scientific
basis for doctors' use of new medicines to treat patients. Yet the resulting
compound – once known to be safe and effective – is easily reverse-engineered,
and the actual manufacturing production costs are modest as a percentage of the
innovation costs."
—Professor Michael Ryan, George Washington University's Creative and Innovative
Economy Center
The intellectual property system facilitates the discovery and development
of new medicines and technologies. Without the protection of this system, there
would be no innovative medical solutions for patients to access. The
intellectual property system rewards scientists and inventors, and it also
requires the disclosure of new knowledge that advances future innovation.
Without protection of intellectual property, companies would not be able to
afford to sustain the billions of dollars invested in medical research and
development. The patent system effectively balances the societal goals of
encouraging innovation and providing access to its benefits. We are committed
to using the patent system responsibly. We respect the intellectual property
rights of others and expect others to respect ours.
As part of our efforts to participate and advance intellectual property
protection, since 2006, Abbott has sponsored The Creative and Innovative
Economy Center at the George Washington University Law School in Washington,
D.C. The Center conducts research and educational activities regarding the
market, business strategy, institutionalization, globalization and localization
characteristics of creativity and innovation in the world economy. The Center's
programs include:
- Biomedical and information technology innovation;
- Drugs and health security;
- Informational and cultural creativity;
- Public policy, administration and international diplomacy;
- Enforcement, judiciary and dispute settlement; and
- Trademark and brand management.