A patent is a legal right that gives an inventor exclusive control over an invention for a limited time. In pharmaceuticals, patents cover the active ingredient, the formulation, the manufacturing process, or a specific use. They allow the company that developed a drug to sell it without competition, which lets it recoup the cost of research and development. A drug patent typically lasts 20 years from the filing date, but the clock starts before clinical trials begin, so the effective market exclusivity is often shorter.

Patents are territorial. A US patent only protects the drug in the United States. Companies file in multiple countries to protect their markets. The patent application must describe the invention in enough detail that others can replicate it, which is the trade-off: exclusivity in exchange for disclosure. Once the patent expires, generic or biosimilar competitors can enter the market, and prices usually fall. Companies sometimes file secondary patents on formulations, dosing, or delivery methods to extend protection, a practice called evergreening. Regulators and courts have pushed back on some of these tactics.

What patents cover:

• Composition of matter. The active ingredient itself.
• Formulation. The specific combination of ingredients.
• Method of use. A specific medical indication.
• Manufacturing process. How the drug is made.

Patent disputes are common in the pharmaceutical industry. A successful challenge can open the market to generics before the patent expires.