APPENDIX B

[Submitted with Statement of Lewis A. Engman, President,
Pharmaceutical Manufacturers Association, Before the Committee
on the Judiciary, United States Senate on S. 255, the "Patent
Term Restoration Act of 1981" (April 30, 1981:)]

The Time Factor in New Drug Development

Even after a new drug has been discovered, it takes 7-10 years to develop it and get it approved for sale.

[Submitted with Statement of Lewis A. Engman, President,
Pharmaceutical Manufacturers Association, Before the Committee
on the Judiciary, United States Senate on S.255, the "Patent
Term Restoration Act of 1981" (April 30, 1981):]

Declining Patent Protection

These 7-10 years are, in effect, deducted from a drug's patent life. Thus, instead of having 17 years in which to recover its investment like firms in most other industries, the pharmaceutical innovator has only about half that time.

[Submitted with Statement of Mark Novitch, M.D., Deputy Commissioner, Food and Drug Administration, Office of Assistant Secretary for Health and Human Services Before the Subcommittee on Health and the Environment of the Committee on Energy and Commerce, House of Representatives, on H.R. 3605 (a 1-page bill to establish an ANDA procedure for post-1962 drugs) (July 25, 1983:)]

For the 205 drug products approved between 1962-1978, 15 products or percent of the drugs had no effective patent life at the time of

approval.

protection.

Another 36 products, or 18 percent, had comparatively little

table below:

Present data for these drug entities were obtained from the following

sources:

1. The Merak Index, Ninth Mition, Published by Merck & Co.

2. 1976 Basic Patents for Major Drugs, Noyes Development Co.,
1969.

3. The U.S. Generic Drug Market, Prost & Sullivan, 1976 and 1980.

Innovation in the Pharmaceutical Industry, David Schwartzman,
The Johns Hopkins University Press, 1976.

Dr. Martin Eisman, Center for the Study of Drug Development, the
University of Rochestar, School of Medicine and Dentistry,
Rochester, W.X.

6. Telephone queries with individual drug sponsors.

"Old Chemicals"/Patents Expired Before Approval Date (12)

1978, 205 products were approved during this time period. Includes expiration date of "chemical" or "product" patent only, does not cover "use" or "process" patents.