Obama Budget Will Crush Medical Innovation
President Obama’s final budget includes a proposal to reduce the period of brand exclusivity available for biopharmaceuticals. While it may sound innocuous, this proposal would squeeze the ability of researchers to recoup the steep costs associated with creating new medicines, which in turn will crush their ability to create the next generation of medicines.
Under current law, a new biologic is given 12 years of exclusivity. This number was not plucked out of thin air by lawmakers, it was created to ensure innovators are able to recoup the extensive R&D costs. The Obama budget proposes to cut this exclusivity period to just seven years and would prohibit additional periods of exclusivity when the product formulation of a biologic is altered.
These changes will take a heavy toll on the creation of new cures. Currently, it costs researchers an average of $2.6 billion and over ten years to develop a new medicine. In 2014 alone, pharmaceutical firms spent over $51 billion on research, while over 50 new drugs entered the market. In order to maintain this rate of innovation, companies are faced with a delicate balance to ensure they are able to finance new research and development.
The Obama budget claims these proposals will increase access to medicine through the development of generics. But by eroding innovator protections, the administration will cut off the stream of resources that allows the development of new medicines for decades to come.