Innovation + Partnering

Intellectual property rights

The discussion around intellectual property rights (IPR) unfolds in many fields – also regarding the active ingredients of pharmaceuticals. But time-limited patent protection is the indispensable fertile ground for medical innovation.

If you design and build a house – buy the land, get a license, hire an architect and builders, invest in stones, paint and windows – the house belongs to you. It is yours to live in, let to a tenant or to sell. As a pharmaceutical company, we design and build molecules suited as active ingredients to fight cancer, help to prevent cardiovascular events or the progression of chronic disease. We employ the best scientists who come up with the idea, develop the concept, and optimize the compound. We carry out clinical studies with tens of thousands of patients to provide authoritative data on the safety and efficacy of a drug candidate. Our investment and the risk we are taking are significant: only one in 10,000 substances makes it through all stages of drug development. If a new medicine is approved, we bring it to the market and to the patients who need it – this is our business model.

Molecules and houses are very different, of course. A house exists once. A molecule – once developed – can be replicated and sold on a large scale. And unlike a house, which may benefit one family, a drug can bring value to millions. Because of this societal value, the intellectual ownership of our molecules is legally limited to avoid perpetual monopolization.

Pharmaceutical companies as Bayer are obliged to disclose the formula of their compounds in the course of the clinical trials, many years before the drug is ready to enter the market. In return, patents protect our intellectual property from being copied by others immediately and at minimal cost. The average legal patent term is 20 years. But up to 12 years will already have passed due to the long development phase for new medicines by the day the drug is granted marketing approval. Then, we have only a few years left to benefit economically from our work before generics companies replicate the drug and market it at a price where R&D-focused companies could not compete. The limited period of marketing exclusivity for the inventor ends after a couple of years, however, our innovations will remain available to patients.

Only if we are capable to take the risk of drug development and keep on researching for many years, new therapies will be made available to patients. The failure rates of new drug candidates are high. Patents are prerequisite for our chance to recoup our investment. They give us required planning security so we can take on the challenge and risk investing in the next generation of innovative medicines. The few successful molecules are the cornerstones of our business.

But should pharmaceutical research and development – which is so essential to society – be a business at all? We believe there are very good reasons why it should: The fact that we pursue this mission as a private company in a competitive field makes sure that this task is done with maximum focus and efficiency, on a solid financial basis and on the cutting edge of modern science. Time-limited patent protection for our intellectual property is a practicable solution which gives people broad access to medical innovation over time and allows us to further build the medical progress of the future.