Drug Cos Benefit From GATT Patent Provisions

2 January 1995

Changes to patent legislation in the USA, bringing it into line with international standards through the General Agreement on Tariffs and Trade provisions are good news for some pharmaceutical companies. The length of patent protection granted in the USA is now extended from 17 years to 20 years from the date that the patent was filed, and means that for some products protection will be extended (see also page 18). Extended protection is granted to those products that had their patents granted less than three years after filing.

Glaxo's best-selling antiulcerant Zantac (ranitidine), the patent on which was due to expire in December 1995, looks set to have an extra 18 months protection, and other products could also benefit. This could result in up to $1 billion in extra revenues for the company. Glaxo's share price went up 11 pence to reach 650 pence following the news.

Bristol-Myers Squibb could also benefit. The patent on Capoten (captopril) is due to expire in August and could gain an extra six months, boosting BM-S' share price $1.25 to $59.37. Merck & Co, SmithKline Beecham and Wellcome have indicated that they will not be affected by the changes.

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