Inventing the drug is the easy part. Patents incentivize companies to spend the money necessary to turn those inventions into safe and useful products.

1.1Substantial incentives are necessary for follow-on inventions With respect to inventions categorized as ‘‘secondary,’’ in the same way as ‘‘primary’’ inventions, there are significant costs and risks associated with translating these inventions into approved drugs. It is important to bear in mind that patents are not only important for incentivizing invention, but also for incentivizing the substantial investment needed to turn an invention into a useful product. As pointed out by Professor Rob Merges, ‘‘patents may have a greater impact on incentives to develop as on incentives to invent,’’36 and this is particularly the case with respect to pharmaceuticals, given the huge uncertainty as to whether a promising invention will actually prove viable in the market. Extensive and expensive human clinical trials are needed to assure the safety and efficacy of follow-on pharmaceutical inventions if they are going to provide any benefit to the public and, to the extent available, test data protection alone is often not sufficient to incentivize the funding of such trials.