This is an interesting post from the very interesting Pharmalot blog. It cites an analysis of the effects of extending the data exclusivity provisions in the Hatch-Waxman Act from 5 years to 12 years as was recently done in the new healthcare reform act for biologics.
According to the analysis done by Health Affairs, extending data exclusivity to 12 years would increase the lifetime revenue of a drug by 5 percent, on average, leading to another 228 drug approvals over the next 50 years, relative to the number of approvals the authors project under the current Hatch-Waxman data exclusivity provisions. And this would lead to an increase of 1.7 months in average life expectancy for those turning 55 in 2060
Basically, the analysis concludes that consumers paying more now to support data exclusivity for a longer time span, will effectively subsidize benefits of consumers in the future who will get more new drugs and an extension of average lifespan (albeit only 1.7 months in 50 years!). Presumably, this effect will be due to the longer data exclusivity resulting in higher proifts and more incentives for drug producers to make more drugs (the 228 referenced above).
By Health Affairs calculations, a 55 year old in 2060 would receive an net benefit of $10,400 from the subsidy/drugs developed due to the largesse of previous generations. Pharmalot asks is it worth it?
Posted by Bruce Lehr Jan 12th 2011.