Jeremy M. Levin

Biotech Innovation Requires a Predictable Patent System

Modern biotechnology creates next generation therapies and cures, delivers value to patients and the economy, cuts greenhouse gas emissions, reduces reliance on fossil fuels, and generates higher crop yields with fewer resources. These critical activities and advances thrive only in an environment where biotechnology is supported by policies that maintain incentives for future innovation – including the form of intellectual property rights – while, at the same time, providing fair and equitable consumer access to innovative products. On both fronts, biotechnology enterprises face unprecedented challenges that, if not addressed, will slow the innovation engine. The consequent negative effects will be felt by all nations. Today, the biotechnology industry faces enormous challenges caused by deep public concern about pricing and access to medicines. The consequent political and public pressure is leading to rapid fire and poorly considered legislation. This, in turn, will likely result in an erosion of incentives to innovate, as it impacts return on investment and access to capital.

In addition, just as unwise legislation may impact investments in innovation, so too are the negative effects of legal evolution in the patent system mounting. For example, an erosion of patent term for approved drugs in Europe is growing, along with increasingly irrational rules of patent-eligibility for diagnostics, nature-based products, and precision medicine inventions in the US. Decisive changes are needed to overcome these challenges.

It is of pivotal importance to keep the innovation ecosystem in balance when addressing legitimate public concerns about the cost of medicines, or the misuse of broad and vague software patents to blackmail high-tech companies. The patent system is an important component of the innovation ecosystem’s foundation and requires reliability so as to encourage and stimulate investments in innovation. An example of how this reliability is being eroded is seen in diagnostic methods to identify biomarkers in the body. These tools are one of the keys to a future where personalized medicine is an exciting reality. However, in the US, patents on diagnostic methods have become largely unenforceable under US Supreme Court jurisprudence. This is destroying any return-on-investment for such innovations and dims the prospect for a future where medicines are crafted specifically for each individual.

Much of this change in the patent system is the result of a series of U.S. Supreme Court Decisions that have expanded the use of non-statutory exceptions to patentable subject matter to prevent the protection of nature-derived substances like antibiotics and industrial enzymes, diagnostic methods, and others. Patents on new therapies are now being attacked with the argument that the body’s response to a synthetic drug is really just a natural physiological phenomenon, unworthy of even being considered for patenting.

Such treatment of patentable subject matter under U.S. law has not only created a huge disparity between the substantive patent law of Europe and the U.S., but it has also created significant uncertainty over what is, and will be, patentable and not patentable. There is even doubt whether a U.S. patent that is perfectly valid when granted today would later “become” invalid because courts continue to change the law – after the patentee has made large investments in reliance on the patent. Nothing could be worse for investment in innovation. What is needed is a patent system that provides legal certainty and adequate protection, not one in which the rules of patentability change mid-process.

The U.S. Senate has begun to examine whether this current patent practice is hindering commercial investment, due to uncertainty in its interpretations by the courts. BIO, the Biotechnology Innovation Organization, is actively taking part in this review process on behalf of its more than 1,000 member companies and has testified before the Senate in support of strengthening the current system.

BIO believes that the patent system should not only be framed by the important legal framework but also aim to underpin two key principles: helping patients and driving innovation. These are the two concerns that should be addressed when considering the patent system. An intact patent system is one key to achieving these goals.

Jeremy M. Levin, DPhil, MB BChir, was elected Chairman of the Biotechnology Innovation Organization in 2019. He serves as the Chairman and CEO of Ovid Therapeutics Inc. Before joining Ovid, Levin served as President and CEO of Teva Pharmaceutical Industries Ltd; he was a member of the Executive Committee of Bristol-Myers Squibb, where he helped position BMS as a leader in immunooncology. Prior to this, Levin was Head of Global Business Development and Strategic Alliances at Novartis and served as Chairman and CEO of Cadus Pharmaceuticals, Inc.

Originally published in European Biotechnology Magazine, Autumn 2019 edition