Squo patent term restoration doesn’t go far enough. Equalizing patent terms is more equitable.
Ouellette and Williams 20 , Lisa Larrimore Ouellette is the Deane F. Johnson Professor of Law at Stanford Law School, as well as a Senior Fellow at the Stanford Institute for Economic Policy Research. Heidi Williams is the Charles R. Schwab Professor of Economics at Stanford University; Professor, by courtesy, of Law at Stanford Law School; and a Senior Fellow at the Stanford Institute for Economic Policy Research (SIEPR). She is the Editor of the Journal of Economic Perspectives, and is a Research Associate at the National Bureau of Economic Research (NBER) where she is co-director of the Health Care program as well as co-director of the Innovation Policy working group. (Lisa Larrimore and Heidi, June 2020, “Reforming the Patent System.” The Hamilton Project, https://law.stanford.edu/wp-content/uploads/2020/06/Ouellette_Williams_LO_6.16_FINAL.pdf)
How can the Hatch–Waxman Act be amended to address the patent-term distortion? In practical terms, Congress could address the current asymmetry in pharmaceutical patent terms by amending one of two provisions included in the Hatch–Waxman Act of 1984. Before discussing these two approaches, it is critical to stress that our goal is not to increase exclusivity for pharmaceuticals in general. Rather, our goal is simply to equalize the periods of exclusivity provided to different types of drugs. The optimal amount of exclusivity is a separate question that should itself be informed by empirical evidence, as discussed above and below. The first potential reform to Hatch–Waxman would amend the patent term restoration provision. Patent term restoration under Hatch–Waxman currently allows a firm to extend one patent per drug for half the time spent in clinical trials, up to a maximum of five years, and with the total life not to exceed 14 years after FDA approval. This patent term restoration was intended to account for commercialization lags, but recent empirical evidence suggests it did not go far enough since longer clinical trials are still associated with shorter effective patent life (Lietzan and Lybecker 2020). Congress could amend the structure of the patent term restoration provision to more successfully equalize effective patent terms across candidate drug compounds.