What is the purpose of patent exclusivity in pharmaceuticals from a policy perspective?

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Patent exclusivity in pharmaceuticals is intended to spur innovation by granting a temporary market monopoly. Developing new drugs is costly and risky, with long development timelines and many failures. The chance to recoup those investments through patent protection motivates firms to invest in research and development, fund trials, and bring new therapies to market. This exclusivity is not meant to guarantee lower prices or permanently eliminate competition. Rather, after the patent expires, other companies can enter with generic versions, increasing competition and typically driving prices down and expanding access. So the core idea is that patent protection creates the right incentives for invention, with the understanding that competition returns once the patent term ends.