ABSTRACT
This chapter addresses issues related to the increasing role assigned to drug approval regulation in incentivizing pharmaceutical innovation. It focuses on the specific provisions under drug marketing approval regulation that intend to restrain the approval of a generic product in order to allow sponsors of innovative drugs to earn higher returns on research and development investments. The chapter seeks to define a pertinent approach to their analysis from the national policy-making perspective. It provides a detailed perspective on how the patent system and drug regulation interact in innovation: at the level of policy objectives and individual provisions. The chapter identifies exclusivity as the common denominator between the two systems and finds regulatory exclusivity to be of the superior quality compared to patents in several aspects. In theory, the patent system intends to stimulate the continuing innovation process by allowing innovators to appropriate renewal and development investments under temporarily restrained competition by imitation.
