Enabling Research and Development through Protection of Intellectual Property Rights and Pricing

Context

Bristol-Myers Squibb is a research-based pharmaceutical and health care company. Research and development (R&D) enables us to fulfill our mission: making a real difference in the lives of people all over the world by providing innovative pharmaceuticals and other health care products. We invest heavily in R&D – approximately $3.1 billion in 2006. Over the past year we have increased companywide R&D expenditures by 15 percent. Our R&D spending represents about 17 percent of our annual sales.

The risks to the company as a result of unwarranted infringement of our intellectual property threaten our ability to fund discovery and development of innovative medicines to treat serious diseases. In order to meet our mission and continue to work on improving the efficiency of our processes, we have eliminated non-priority spending from our product discovery and developmental processes. Over the last few years, we have improved the efficiency of our R&D efforts, by implementing robust processes for evaluating potential medicines early on and identifying which compounds provide the greatest opportunities for addressing serious diseases.

We are aggressively leveraging a broad range of strategies and tools. Our scientists are pioneering the use of patient genetics to discover and characterize new compounds. In addition, we have created alliances with other research organizations in order to respond swiftly to new opportunities and thereby increase our success rate. Moreover, we recognize that gaining approval from the FDA or other health agencies around the globe does not mark the end of our development work. We are committed to unlocking the full value of the products we discover and develop; thus, through life cycle management, we devote extensive resources to identifying and fulfilling all the ways in which our products can extend and enhance human life.

Intellectual Property Rights

Intellectual property law provides incentives for innovative pharmaceutical research, and this research benefits patients by establishing the basis for approval of important new treatment for diseases. By pursuing these incentives, Bristol-Myers Squibb fulfills its obligations to its stockholders, and, at the same time, advances the company's mission to extend and enhance human life. It is important that, in making decisions on intellectual property matters, we keep these dual objectives in mind. It is entirely appropriate for the company to seek and secure rights to its employees' inventions. Also, in order to offer physicians and patients a wider variety of therapies, we can and should license the inventions of others. Finally, the company is entitled to own the data that we generate about our medicines.

In evaluating what intellectual property rights to seek and how to enforce them, Bristol-Myers Squibb will consider the following criteria:

The extent to which the invention or research contributes significantly to the improvement of patient care (e.g., greater safety, efficacy, comfort and convenience, etc.).
The extent to which the invention or research improves the quality or efficiency of the manufacturing process.
Whether the invention improves the research process itself (e.g., allows us to screen or evaluate more potential new medicines).
Whether the invention or research can provide a return on investment, and whether the intellectual property rights sought would benefit the shareholders.
Whether the invention or research can provide valuable new information on how better to use existing products to benefit patients (e.g., new uses for medicines).
In circumstances in which patients may not be able to obtain adequate access to our products (e.g., in the poorest countries), whether any intellectual property rights obtained should be licensed to others and/or product should be made available by the company at a reduced price.

At the same time, in deciding how to exercise our legitimate intellectual property rights, the company will consider all aspects of our company's Pledge. For example, we are committed to fair dealing and conscientious citizenship. This means that Bristol-Myers Squibb will seek to obtain intellectual property only by lawful and ethical means, and to enforce only those intellectual property rights that we believe to be valid. We will place the highest priority on obtaining intellectual property for those innovations that provide the greatest medical benefit to patients. And we stand by our series of initiatives – from our patient assistance programs to SECURE THE FUTURE® – to make Bristol-Myers Squibb medicines widely available to patients who cannot afford them.

Pricing

Bristol-Myers Squibb interprets our mission to extend and enhance human life in broad terms: by focusing on unmet medical need, by developing innovative products and by expanding access to its medicines and other health care products. Our financial commitment to research and development is reflected in our product pricing. We support a number of initiatives to help provide our medicines to patients in need.

Outside the U.S., Bristol-Myers Squibb is actively engaged with governments and other partners to enable access to our HIV medicines. Through the Global Access program, we make our HIV medicines available at no-profit prices in sub-Saharan Africa and the poorest countries globally. In July 2005, we announced the further reduction in the price of pediatric formulations from no-profit to significantly below cost in an attempt to further reduce barriers delaying broad and accelerated access to treatment for the millions of children in sub-Saharan Africa who need them most. Bristol-Myers Squibb has also implemented a differential pricing policy for many other markets globally in order to enable collaboration with and support of government activities in regions with high incidence and low ability to pay for these HIV medicines.

Since 2001, Bristol-Myers Squibb has maintained a policy of not enforcing its patents for HIV products in sub-Saharan Africa. The company is committed to ensuring that its patents do not prevent inexpensive HIV/AIDS therapy in sub-Saharan Africa. In order to ensure sustainable access to care for millions of HIV positive patients in sub-Saharan Africa, Bristol-Myers Squibb has engaged in various activities to facilitate generic participation. In February 2006, Bristol-Myers Squibb announced a highly innovative agreement for full technology transfer of its newest antiretroviral to two generic companies, Aspen and Emcure. The technology transfer agreement seeks to expand access to to this medicine for people living with HIV/AIDS in sub-Saharan Africa and India by ensuring access to a high quality product supported by local expertise, supply and infrastructure. It builds on Bristol-Myers Squibb’s consistent leadership and long-term commitment to expand access to medicines in sub Saharan Africa and countries where HIV has reached epidemic levels.

In the U.S., the company participates in a number of programs to ensure that those in need and who qualify can obtain its medicines at no cost or at a reduced cost. Bristol-Myers Squibb has consolidated its patient assistance programs in the U.S. into a single LifeLines of Care initiative that continues to provide assistance for qualifying patients with financial hardships. During 2006, approximately 570,000 patients in the U.S. benefited, with donated products valued at more than $418 million at wholesale list price. The Partnership for Prescription Assistance is an industry-wide program that provides a simple, one-stop resource for nearly 500 prescription assistance programs. We led the initiative for this program. Bristol-Myers Squibb participates in Together Rx Access for qualified uninsured people under 65 years of age who are otherwise not eligible for Medicare.

For more information, see Access to Medicines.

Importation

A number of U.S. legislative proposals have emerged to amend current health and safety law to allow distributors to import prescription drugs – manufactured in the U.S. and possibly elsewhere – from Canada into the U.S. or to allow individuals to purchase medications directly from Canadian pharmacies.

Amending current health and safety laws to allow for such importation of pharmaceuticals presents real risks to patients and provides no guarantee that the imported pharmaceuticals would be cheaper. Federal law on prescription drug imports and reimports reflects well-documented concerns about the safety of imported drugs and the probability that many such drugs may be unapproved, adulterated, contaminated, or counterfeit.

Last updated October 25, 2007 . Italicized product names are registered trademarks of Bristol-Myers Squibb Company or one of its divisions or subsidiaries. Copyright © 1998-2006 Bristol-Myers Squibb Company. Your use of the information on this site is subject to the terms of our Legal Notices.

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