The push for greater clinical trial transparency is typically framed as a conflict between companies’ interest in protecting trade secrets and the public’s interest in accessing health-relevant information. But a new article by economists Dennis Byrski and Lucy Xiaolu Wang analyzes an underappreciated dimension of this debate: clinical trial disclosure also affects patenting. When trial data becomes public, it creates prior art that can block subsequent patents related to the drug. The authors document that European marketing authorization—which requires substantial data disclosure—leads to significant declines in secondary patenting on drug modifications like new dosages and formulations. The result is a regulatory check on pharmaceutical patent “evergreening”: once authorization-related disclosures enter the public domain, many incremental follow-on patents become harder to obtain.
Timing is critical in patent law. To obtain a patent in the United States, the European Patent Office, or other jurisdictions, an applicant must show that their invention is new and nonobvious (or in Europe, has an “inventive step”) compared with the prior art, which includes a host of publications and activities that predate the patent filing (including sale of the drug itself for post-marketing patents). At the same time, applicants must disclose sufficient information about the invention; for pharmaceutical patents, human clinical trial data generally are not required, but applicants must provide a credible reason to expect the drug to work, such as in vitro or in vivo testing. These requirements place temporal limits on patenting: applications must be filed after gathering sufficient evidence to satisfy the disclosure requirements, but before prior art destroys the invention’s novelty.
An important challenge for studying European pharmaceutical patenting is linking patents and drugs. Europe does not have an equivalent of the FDA’s Orange Book linking approved drugs with their patents, so Byrski and Wang construct a novel dataset. They link drugs authorized by the European Medicines Agency (EMA) to the core patent for which a patent term extension is sought through a Supplementary Protection Certificate. They use additional databases to gather information on the subsequent European patents that cite these core patents, treating these forward citations as a window into follow-on research activity. Their empirical strategy then exploits variation in approval lags—the time between the primary patent filing and the drug’s first EU marketing authorization. Because development time is uncertain at the time of patent filing, drugs with different lags can be compared to study the effect of authorization.
Their main result is that follow-on patenting declines after marketing authorization, especially for the kinds of patenting they view as most associated with “strategic” behavior. The decline is concentrated in secondary patents on subsidiary drug features such as dosages and formulations, and especially in secondary patents that stay within the same therapeutic space as the original drug. In contrast, they do not observe the same drop in citations associated with product patents covering new molecular entities, or in follow-on patenting aimed at different disease areas. The authors interpret this pattern as reassuring for meaningful follow-on innovation: firms continue to pursue new compounds and explore new therapeutic indications, but the disclosures accompanying marketing authorization make it harder to secure patents on marginal modifications within the same therapeutic space.
Byrski and Wang present various additional analyses supporting their interpretation that the decline is driven by prior art generated during marketing authorization. They find no similar decline at the end of phase II trials, a milestone that similarly reduces uncertainty about drug quality but involves less comprehensive data disclosure and thus does not create the same prior art obstacles. They also show that the post-authorization drop is concentrated in citations that signal legal vulnerability—examiner-generated citations and “novelty-threatening” citations (categories X or Y in the European Patent Office search report)—suggesting that the forgone follow-on patents are disproportionately ones that are very similar to the core patent. The paper supplements these results with robustness checks, including by examining a subset of drugs with constant market exclusivity despite varying approval lags, and by conducting an instrumental variable analysis using the time from patent filing to the start of phase I trials.
These findings add a new dimension to ongoing debates about clinical trial transparency. Even before disclosure to regulators, clinical trials can block later patents, though trial sponsors can prevent the trial from becoming prior art with confidentiality agreements. But regulators are changing this. In the United States, most drug trials (excluding phase I studies) must be registered at ClinicalTrials.gov within 21 days of enrolling the first participant, including details such as the disease and intervention being studied, although enforcement has been inconsistent. These registrations have been used to invalidate later-filed patents. New transparency requirements will likely amplify these effects: the EU’s 2022 Clinical Trials Regulation requires more comprehensive disclosure (including mandatory registration of all clinical trials, not just those tied to authorization), and there is push for the FDA to more vigorously enforce the U.S. requirements.
To be sure, distinguishing strategic patenting from meaningful follow-on innovation is difficult, and Byrski and Wang have to rely on proxies with potentially unaddressed confounders. But the data they present is suggestive of an optimistic take, that mandatory clinical trial disclosures could cut down on low-value patents on trivial modifications—which may delay generic competition without delivering meaningful therapeutic benefits—without obviously discouraging the kinds of follow-on efforts that generate new therapeutic value. This pattern is also consistent with recent work suggesting that high-value follow-on innovation is most responsive to forms of protection that meaningfully delay generic entry, rather than to incremental secondary patents that raise the costs of generic entry but do little to extend effective exclusivity.
Even so, the net welfare effect of these changes to patenting is nonobvious. For example, by incentivizing all patents to be filed earlier, greater clinical trial transparency will also reduce the effective exclusivity period so that some drugs—or some new indications for existing drugs—on the margins might never be developed. At the same time, because patent law does not generally require proof of clinical benefit, this dynamic may also induce a perverse substitution away from evidence-generating clinical trials and toward secondary patenting strategies that avoid disclosure-creating trials altogether, even where additional clinical evidence would be socially valuable. And even if these changes are accompanied by efforts to require disclosure of more evidence before firms may obtain a patent, the combination of earlier prior-art creation and heightened disclosure requirements could greatly narrow—and in some cases eliminate—the window between when companies possess patentable information and when it becomes prior art. Byrski and Wang’s data cannot resolve how these effects should be balanced, but both their conceptual framing and empirical contribution will be important to ongoing policy discussions of regulatory data transparency.
