Competition occurs through successful R&D

As innovation is the true lifeblood of the research-based industry, competition between pharmaceutical companies primarily occurs through research-based product development

• Innovative companies are competing fiercely between themselves in various therapeutic areas. They all strive to develop improved therapeutic alternatives and better treatments that prevent or cure many diseases, and relieve suffering.
  
  

The role of intellectual property rights in medical progress:

• Because of the huge expenses, resources and risk involved in researching and developing new medicines, it is absolutely vital that effective intellectual property protection enables inventors to recoup their investments.
  
  
• In the same way as for any other industrial product, patents for medicines can be granted only if three conditions are met: novelty, industrial applicability and inventive step, which, in the case of a patented medicine, means therapeutic progress.
  
  
• The patent system balances the interests of the inventor with the broader interests of society at large. A patent gives an inventor the right to prevent others from making, using and selling an invention for a limited period of time. Patents increase a society’s knowledge base. But patents do not guarantee a return on investment and they do not stop someone else from creating a competing innovation.
  
  
• As patents require the disclosure and publication of information about the patented medicine, they encourage the continuation of scientific discovery and stimulate competition. Over time, periods of market exclusivity have been gradually shrinking for “first in class” medicines.
  
  
• Contrary to a widely-held misconception, pharmaceutical patents do not provide a monopoly for treating a disease. They only confer an exclusive right, for a limited period of time - i.e. 20 years from the date of filing the patent application - to prevent others from manufacturing and selling the same patented medicine without the permission of the patent holder.
  
  
• Moreover, effective patent life for medicines is often reduced from 20 years to about 8 to 10 years due to the long clinical testing and registration process and market access delays.
  
  
• Patent rights therefore do not hamper other manufacturers’ rights to develop a different medicine to treat the same disease, but they play a key role in the transformation of knowledge into economic value.
  
  
• Intellectual property rights (IPRs) are a key pillar of Europe’s knowledge-based economy. Effective protection of IPRs (through patents, trademarks and protection for all pharmaceutical registration data) is therefore essential for quality healthcare based on innovative pharmaceutical products.