Reimagining Pharmaceutical Market Exclusivities: Should the Duration of Guaranteed Monopoly Periods Be Value Based?

OBJECTIVES: To describe the main features of a pharmaceutical market in which the duration of guaranteed monopoly periods would correspond to a new pharmaceutical product's value. METHODS: After reviewing patent and regulatory exclusivity-based mechanisms for protecting prescription drug markets from competition to incentivize drug innovation in developed countries, we model market protection mechanisms within the current framework to give the longest-lasting market protections to drug developers that bring the most affordable products to market with highest public health and clinical value. RESULTS: An approach tying pharmaceutical market exclusivity to value would have 3 main features. First, it would be based on regulatory exclusivity (ie, the drug regulator refrains from authorizing generic entry for a certain amount of time), rather than patents. Second, the duration of exclusivity period would be pegged to the magnitude of a product's anticipated health impact and its proposed price by using modified methods from the field of health technology assessment. Third, the duration of the value-based exclusivity period would be reassessed routinely 3 years after the product's launch to account for its real-world effectiveness. CONCLUSIONS: Linking a drug's proposed price to the duration of its regulatory-based exclusivities would both incentivize the development of high impact, low-cost products and motivate drug developers to introduce these products at lower prices.