ECONOMIC SIGNIFICANCE OF PHARMACEUTICAL PATENTS

Pharmaceutical innovations in the form of a chemical formula, a composition, or a method of preparation of chemical composition may be protected by patents to prevent copying by rival companies. The life of a pharmaceutical patent is 20 years from the time the patent is filed but in some jurisdictions, such as Australia, an extension in term from 20 years to a maximum of 25 years may be available to compensate the patentee for a lag in regulatory approval for pharmaceuticals or biological products. With a rise in medicinal awareness, the focus of many medical and pharma companies has shifted toward innovating new medicines and medical devices to cater for current COVID-19 requirements and to prepare for the possibility of future epidemics.

Global Trends:

The global pharmaceutical manufacturing market size was valued at USD 405.52 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 11.34% from 2021 to 2028. [Source: Grand View Research]. As a global trend, there were a significant number of pharmaceutical patent filings in the last 10 years. The following table shows the patent filing trends in this space from the top patent jurisdictions:

[Source: WIPO]

In 2014-15, in a list dominated by the US, Australia was ranked 13^th, with a comparable share of PCT applications to Switzerland and Israel. Australia’s share of pharmaceutical PCT applications was 1.5 percent and comparable to medical device inventions where Australia ranked 13^th with a share of 1.7 percent. [source: PATSTAT database]. Currently, Australia ranks 7^th in global pharmaceuticals related patent filings.

Based on the data available at WIPO, Australia has about 46,876 pharmaceuticals/medical devices related patents filings in last 10 years, which is 2.9 percent of total pharmaceutical related patent filings. There has been constant growth in the number of patents filed in this space over the last 10 years.

Over a period of a drug’s exclusivity, either through patent or regulatory exclusivity, drug manufacturers earn, on average, $18.6 billion in total global revenues for each new drug. This is almost 10 times more than the average $1.8 billion cost of drug development. [source: AHIP]. Australia’s pharmaceutical market is growing rapidly and has risen from just over $22.85 billion in 2016 to $25.2 billion by 2020, registering a compound annual growth rate (CAGR) of 2%, according to research and consulting firm GlobalData. Further, over the forecast period, 2022-2027, the Australian pharmaceuticals market is expected to witness a CAGR of 2.1%. [Source: Mordor Intelligence]

Pharmaceutical advancement is being driven by the private sector and as well as government which is supporting indigenous and foreign companies to grow and develop new medicines. For example, in January 2021, the Therapeutic Goods and Administration approved the COVID-19 vaccine developed by Pfizer and BioNTech. In addition to this, the Australian government has entered four agreements where it has invested around AUD 3.3 billion to support the supply of vaccines in the country and the country invested around AUD 363 million in research and development activities related to the prevention and treatment of COVID-19. These developments are further expected to accelerate market growth [Source: Mordor Intelligence] as Australia is the fourth largest target market for vaccine technologies related to (+)ssRNA viruses, with 550 patent families filed at IP Australia. The United States is the largest target market, with 1219 patent families filed, followed by China (1015 patent families) and Europe (878 patent families). Globally, Australia is becoming a hub for manufacturing/innovation of pharmaceutical related products.

Major Pharmaceutical patent Applicants in Australia:

[Source: WIPO]

The top Applicants in field of pharmaceutical related inventions in Australia include Novartis AG, Takeda pharmaceuticals, Janssen pharmaceuticals, Jiangsu Hengrui medicine, Immatics Biotechnologies GmbH, F Hoffmann La Roche, Otsuka pharmaceutical, Amgen Inc, Gilead sciences Inc, and Allergan Inc. Novartis AG was the biggest patent filer in Australia and its annual revenue for 2020 was $49.898Bn. It’s annual revenue for 2021 was $52.877Bn, a 5.97% increase from 2020 and revenue for the twelve months ending 30 June 2022 was $52.788Bn, a 2.39% increase year-over-year [Source: Macrotrends].

It can be seen that there is a growing trend of innovations and revenue in the field of the pharmaceuticals in Australia. Although, the above-mentioned companies are reliant upon developing new drugs, there are a lot of companies who, instead of spending on research and development of new drugs, focus on licensing the already developed drug for manufacturing. There is a need for rapid innovation and protection in order to take advantage of this growing trend. Further, companies based in Australia have options to produce new pharmaceutical related products and/or medicinal devices, to secure patent protect and a monopoly with the inventions and to also license patented pharmaceutical products or medical devices for manufacturing and/or sale. There are various Australian based companies working on new pharmaceutical products and/or medical devices such as Botanix Pharmaceuticals, Vaxxas, Global Kinetics Corporation, Prospection, etc. Vaxxas, for instance, is preparing patent portfolios and receiving funding from Australia and abroad. Below is a list of patent applications filed/granted in name of Vaxxas:

Vaxxas was founded in year 2011 and has raised USD 46.2 Million from investors such as Bill & Melinda Gates Foundation for developing new medical devices. [Source: VCBay]

If you have a new or improved Pharmaceutical-based invention and/or medical devices and you would like to discuss the best strategy for a patent application, reach out to our team at IP Guardian. Our attorneys are experienced at handling pharmaceutical and medical device patents and assisting you in protecting your Intellectual Property.

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Barry Meskin

Registered Patent and Trade Mark Attorney with significant experience obtaining all forms of registered intellectual property. I hold a Bachelor of Science in Engineering, a Masters of Business Administration and a Masters of Intellectual Property. I’m passionate about showing my clients how they can protect their brands through trademark registrations.