Biotechnology firms have the potential to change the face of the health care industry forever. These firms and their ideas could revolutionize patient care and amass significant profits; that’s why it’s important to take steps to protect the ideas, research and technologies that contribute to breakthroughs. Discover four reasons why patents matter in the biotech sector:
Biotechnology Is Research Intensive
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Biotechnology is perhaps one of the most research-intensive industries. Companies in this sector typically invest between 40 and 50 percent of their revenues in research and development, compared to 13 percent in pharmaceuticals and 5 percent in the chemical industry. The people who manage biotechnology firms must protect the results of the research, and securing patents is the most effective way to do so.
Developing New Biotechnology Is Expensive
Biotechnology companies must bear significant costs to develop new products and processes. Extensive research time is a key reason for these costs. However, recreating the products and processes of competitors is relatively inexpensive.
Adequate patents on developments and the research that led to them help biotechnology businesses reduce the risk of copied products entering the marketplace.
Intellectual Property Rights Can Be the Final Product
Not every biotechnology company sees a product through from design to manufacture. In many cases, small biotechnology firms license their patented innovations to larger firms with the resources capable of producing them and taking them to market. The success of these small companies depends on whether those companies can convince investors that their firms have a sound intellectual property strategy. This strategy, which centers on patents, helps minimize the risks for investors.
Patents Keep the Biotechnology Industry Moving Forward
Once a biotechnology firm acquires a patent, details of its technology enter the public domain. The development’s description, including its advantages and claims about the product’s usage, production methods, and the product itself, are all part of the patent.
Patents allow competing companies to learn what other firms are doing and be inspired to create their own innovations, in much the same way that the articles published in scientific journals inspire new research ideas and discovery efforts. Patents drive the biotechnology industry forward, which is good news for this exciting sector and society.
Patents also strengthen the biotechnology companies they protect. Firms feel encouraged to continue their research when they know they can protect the results of their efforts. These firms are also more likely to have the funds if their patented goods are a success.
Patented biotech goods have the greatest value near the end of their patent period. By that time, these goods have been through clinical trials, received regulatory approval, entered the market, and hopefully gained acceptance from the public — all without any competitors. The patented goods are generating significant revenue, which can then be reinvested into further biotechnology research into new products.
Biotech companies are responsible for some of the most innovative developments in the world. An MBA in healthcare can help prepare leaders of these innovative firms to balance groundbreaking discoveries with intellectual property protection.