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66 Food & Drug L.J. 329 (2011)
Bringing Smart Pills to Market: FDA Regulation of Ingestible Drug/Device Combination Products

handle is hein.journals/foodlj66 and id is 347 raw text is: Bringing Smart Pills to Market: FDA Regulation of Ingestible Drug/Device Combination Products MATTHEw AVERY DAN Liu* INTRODUCTION The pharmaceutical industry is under siege, with revenue threatened by rising research and development costs, a shrinking product pipeline, and relentless chal- lenges from generic manufacturers. Since peaking in 1996, when the Food and Drug Administration (FDA) approved 53 new drugs, the annual number of new drugs approved for marketing has steadily declined.' Only 21 new drugs were approved by FDA in 2010.2 Over the same period, research and development spending by pharmaceutical manufacturers has increased 187 percent, from $16.9 billion to $48.5 billion.3 Compounding this problem is a rapidly approaching patent cliff.4 In the past three years, more than 70 drugs have gone off patent.5 By the year 2014, nine of the top- 15 best-selling drugs in the world will lose patent protection.6 And generic companies continue to file hundreds of applications each year to market generic versions of these brand-name drugs, with approximately 850 such applica- tions filed in 2010 alone.7 All these factors suggest that the pharmaceutical industry is poorly prepared for dealing with these threats. In response to these challenges, the pharmaceutical industry has turned away from traditional areas of development to search for new solutions. Some companies have attempted to lengthen the lifetimes of their products with new formulations, Mr. Avery is an Associate at Baker Botts LLP in Palo Alto, California. Dr. Liu is a J.D. Can- didate at the University of California, Hastings College of the Law, 2012. The authors would like to thank Professors Robin Feldman and Marsha Cohen of U.C. Hastings for advising them on this Article as part of the U.C. Hastings Law and Biosciences (LAB) Project. I See BURRILL & CO., BIOTECH 2008 LIFE SCIENCEs: A 20/20 VisioN To 2030, at 43 (2008); Mat- thew Arnold, FDA BLA Approvals Rose in 2009 While NMEs Stumbled, MED. MARKETING & MEDIA, Dec. 31, 2009, http://www.mmm-online.com/fda-bla-approvals-rose-in-2009-while-nmes-stumbled/ articlell60496/; Matthew Avery, Personalized Medicine and Rescuing Unsafe Drugs with Pharma- cogenomics: A Regulatory Perspective, 65 FOOD & DRUG L.J. 37, 38 (2010); Pills Get Smart: Potential Encapsulated, ECONOMIST, Jan. 14, 2010, http://www.economist.com/businessfinance/displayStory. cfm?story id= 15276730. 2 See Jennifer Corbett Dooren, Drug Approvals Slipped in 2010, WALL ST. J., Dec. 31, 2010. http:// online.wsj.com/article/SB10001424052748704543004576052170335871018.html. See Avery, supra note 1, at 38. 4 See Christopher K. Hepp, Big Pharma Gearing up to Face the Patent Chff, PHILA. INQUIRER, Nov. 12, 2010, http://www.philly.com/inquirer/business/107412428.html; More Than 1,000 Drug Patents Expiring During the Next Two Years, PHARMALIVE, Dec. 3, 2010, http://www.pharmalive.com/News/ index.cfm?articleid= 747957&categoryid= 32. 5 See David Collis & Troy Smith, Strategy in the Tiventy-First Century Pharmaceutical Industry: Merck & Co. and Pfizer Inc., Harvard Business School, November 16, 2007. One group reported that nine of the top ten biggest drugs in the world will lose patent protect by 2014. See Hepp, supra note 4. 6 See Tom Randall, Drugmakers Poised to Report Biggest Drop Since 2006 on Record Patent Loss, Bloomberg com, Apr. I15, 2011, http://www bloomberg comlnews/2011-04-15/drugmakers-poised-to-report- biggest-drop-since-2006-on-record-patent-loss. html. SSee Kurt R. Karst, OGD Finished 2010 on a High Note Really High!, FDA LAW BLOG, Feb. 3, 2011, http://www fdalawblog.net/fda law blo~hyman.phelps/2011/0O2/ogd-finished-2010-on-a-high- note-really-high html. See Pills Get Smart, supra note 1. 329

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