By providing individuals withexclusive rights in their inventions for a limited time, the patent system allows inventors to realizefinancial benefits from their inventions. The FDA maintains the test data incorporated into a NDA in confidence. An ANDA allows a generic drug manufacturer torely upon the safety and efficacy data of the original manufacturer. The federal food and drug laws establish several different sorts of marketing exclusivities, relatingto new chemical entities, new clinical studies, orphan drugs, and pediatric studies. (96) Issueshave also arisen with respect to the use of marketing exclusivities to encourage the private sector todevelop bioterrorism countermeasures, as well as whether other nations are obligated by WorldTrade Organization (WTO) agreements to grant marketing exclusivities similar to U.S. law. Thisreport reviews these issues in turn. As a result, the practical effect of these marketing exclusivities is to awardexclusive rights for discoveries that could not fulfill the requirements of the Patent Act. (99) 
On the other hand, some commentators believe that NCE and new clinical study exclusivitieshave an important policy role to play in pharmaceutical innovation. (107) 

		The Term of Marketing Exclusivities

Although some commentators believe that marketing exclusivities are inappropriate orunnecessary, others assert that current U.S. terms of marketing exclusivity fall short of internationalstandards and should be lengthened. Expansion of Marketing Exclusivities

The 109th Congress is currently considering the use of marketing exclusivity mechanisms inorder to encourage the private sector to develop bioterrorism countermeasures. (123) Forexample, the Australia-United States FTA provides in part:
With respect to pharmaceutical products, if a Partyrequires the submission of: (a) new clinical information (other than information related tobioequivalency) or (b) evidence of prior approval of the product in another territory that requiressuch new information, which is essential to the approval of a pharmaceutical product, the Party shallnot permit third persons not having the consent of the person providing the information to marketthe same or a similar pharmaceutical product on the basis of the marketing approval granted to aperson submitting the information for a period of at least three years from the date of the marketingapproval by the Party or the other territory, whichever is later. Concluding Observations

In combination, patents and marketing exclusivities provide the fundamental framework ofintellectual property incentives for pharmaceutical innovation in the United States. Due to theTRIPS Agreement's obligation of technological neutrality with respect to the patent system, (127) marketing exclusivitiesprovide Congress with a more flexible option for stimulating specific sorts of desirable privateactivity than do patents. In the United States, marketing exclusivities are viewed primarily assupplementing patent protection, in that they provide more limited protections for inventions thatdo not meet Patent Act requirements, or effectively delay the onset of patent litigation for inventionsthat do. Finally, policy makers may appreciate that general patent reform legislation has been thesubject of significant discussion during the 109th Congress. (129) Current legislativeproposals do not appear to impact the fundamental landscape of patents and marketing exclusivitieswithin the pharmaceutical industry. Because legislative reform efforts are still underway, however,congressional attention to the impact of broadly oriented patent reforms upon the pharmaceuticalindustry may be appropriate.
In combination, patents and marketing exclusivities provide the fundamental framework ofintellectual property incentives for pharmaceutical innovation in the United States. Patents, whichare administered by the United States Patent and Trademark Office (USPTO), provide their ownerwith the ability to exclude others from practicing the claimed invention for a limited time. Incontrast, marketing exclusivities are administered by the Food and Drug Administration (FDA). Alternatively known as "data exclusivity" or "data protection," a marketing exclusivity preventsgeneric competitors from referencing the preclinical and clinical test data that manufacturers ofbrand-name pharmaceuticals generated in order to demonstrate the safety and effectiveness of theirproducts. The FDA currently awards qualifying innovators with marketing exclusivities for thedevelopment of new chemical entities or orphan drugs, as well as for the performance of new clinicalstudies and pediatric studies.
Although patents and marketing exclusivities are separate entitlements that are administeredby different federal administrative agencies and that depend upon distinct criteria, they both createproprietary rights in pharmaceutical innovation. These rights in turn allow innovators to receive areturn on the expenditure of resources leading to the discovery. Once these rights expire, themarketplace for that drug is open to generic competition.
Several innovation policy issues have arisen concerning the relationship of patents andmarketing exclusivities. Some observers believe that marketing exclusivities are unnecessarybecause patents are generally available for pharmaceutical innovation. On the other hand, someobservers believe that the terms of the marketing exclusivities established by U.S. law are too short. In particular, they note that comparable European standards are often considerably longer than theirU.S. counterparts.
International agreements require each World Trade Organization (WTO) member state totreat all patented inventions in the same manner. As a result, marketing exclusivities provideCongress with a more flexible option for stimulating specific sorts of desirable private activity thando patents. Indeed, the 109th Congress is currently considering expanding upon existing marketingexclusivities in order to encourage the development of bioterrorism countermeasures. WTOAgreements, as well as recent Free Trade Agreements to which the United States is a signatory, alsooblige nations to provide some manner of protection to pharmaceutical test data.
Although general patent reform legislation has been the subject of significant discussionduring the 109th Congress, current legislative proposals do not appear particularly to impact therelationship between patents and marketing exclusivities. Some maintain that continued attentionto the impact of broadly oriented patent reforms upon the pharmaceutical industry is appropriate.