Patent term extension (PTE) is a statutorily-based mechanism to compensate inventors for patent term loss due to regulatory delay during the drug approval process at the United States Food and Drug Administration (FDA). In the context of pharmaceutical products, PTE is only available for the active ingredient of a drug formulation. Case law and interpretation of the relevant statutory text have clearly delineated the boundaries of what qualifies as an active ingredient in a chemical formulation for purposes of PTE. As therapeutics expand beyond simple chemical formulations into cell-based and gene therapy-based formulations, where a chemical compound is not the active ingredient, an interpretation of active ingredient for purposes of PTE is lacking. I term this shortcoming “the active ingredient problem.” In the absence of applicable case law, it has become increasingly important to review FDA guidance and recommendations. Furthermore, the United States Patent and Trademark Office (USPTO) has offered limited indications of how it may interpret active ingredients in these scenarios. Moving forward, it will be essential for inventors to understand how these cutting-edge therapeutics will be protected and how their efforts will be compensated as a result of delays associated with the regulatory approval process. In this paper, I advocate the adoption of “treatment complex protocols” or TCPs, a novel framework for PTE for cellular and gene-based therapeutics. This framework moves away from considerations of an active ingredient and instead embraces the complexities of the production and development of cellular and gene-based therapies. Under this framework, PTE would be granted to a TCP, which is a complete protocol-based description of the inputs, modifications, and outputs required to develop these complex and clinically important therapeutics. Although TCPs are necessarily more complex than determinations of active ingredients for chemically based therapeutics, they have the potential to clarify this increasingly murky, yet clinically relevant, area of the law.
This article examines the possible constructs behind the announcement that Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. are jointly building a new healthcare entity for their employees. In this article, I provide context by discussing and comparing the healthcare ambitions of the three largest information technology companies before arguing that various forms of hybrid entities will increase their footprint in healthcare data and delivery. The core of this discussion is a thought experiment about the nature of what I term “Prime Health.” That analysis is based initially on observations about Amazon’s existing culture and business model of Amazon. Thereafter I examine both what Prime Health could and should be. I argue that it will likely go beyond the pedestrian model of a very large self-funded group insurance plan; will disintermediate traditional healthcare insurers; and attempt to bring consumers and healthcare providers together into some type of online marketplacean updated, privatized version of managed competition. In the final parts of the article I delve into the regulatory environment that hybrid healthcare generally, and Prime Health in particular, will face. This analysis includes federal device and data protection laws, a few idiosyncratic state laws, and a brief discussion of the problems inherent in the limited regulation of hybrid healthcare entities.
Diagnostic tests are a core component of modern health care practice: they determine a patient’s susceptibility to developing cancer and other disorders; they diagnose biological conditions; they monitor the progress of disease; and they can assess the risk of disease recurrence. Ensuring their innovative growth is therefore an important issue in innovation policy. While legal scholarship addresses much about the relevance of patents and other forms of intellectual property protection for diagnostic methods as a general matter, far less attention has been paid to a distinct class of diagnostic tests that deserves its own innovation policy debate: companion diagnostic tests. This note seeks to draw more attention to the economic challenges facing the companion diagnostics industry. It begins by providing the necessary background to understand what companion diagnostic tests are, and why they are vital to the future of modern healthcare. It then explores the unique underlying incentive structure amongst the key industry stakeholders, revealing how the incentives of these stakeholders are misaligned in ways that impede the industry’s growth. Relying on empirical data from case studies collected in pharmacology and biotechnology business literature, this note ultimately argues that the microeconomics of the companion diagnostics industry present a compelling case for invigorated patent protection of companion diagnostic tests.