Policy making on data exclusivity in the European Union: From industrial interests to legal realities

After lengthening the duration of patents to twenty years in 1984, the pharmaceutical industry has turned to data exclusivity as a major vehicle for extending market protection, even after patents expire. Such protections give companies the power to tax consumers for innovation by charging above-market prices. This article draws upon unique information to describe how key actors lengthened data exclusivity for patented drugs to postpone generic competition in the European Union (EU) just before ten new members joined it. We explore the political route and the interests of different actors to understand the process by which industrial interests are translated into legal realities in the world's largest harmonized market. Several factors influenced the outcome, including the role of the pharmaceutical unit of the Directorate General for Enterprise of the European Commission in promoting the interests of the innovative branch of the industry, the time pressure to find a viable compromise before EU enlargement, and the heterogeneous preferences of the other actors. The case illustrates the inherent tension between the desire of both health care administrators and patients for high-quality, low-cost medicines and the objective of the innovator pharmaceutical industry to find and approve new drugs that are price protected and sell them in a way that maximizes revenues.