Patent Term Extension (PTE) is a regulatory mechanism that allows for an extension of the patent term for a specific drug or medical device. The purpose of PTE is to compensate the patent holder for the time and effort required for the drug or device to gain regulatory approval from the Food and Drug Administration (FDA).

PTE is typically used by pharmaceutical and biotechnology companies when seeking FDA approval for a new drug or biologic product that is expected to have a long development and regulatory review process. This extension provides an additional period of time, up to five years, in which to recover the expenses incurred during the development process before generic drugs can be approved.

In the healthcare industry, PTE is used to encourage investment in the development of new drugs and medical devices. It helps innovators to recuperate the costs of research and development and gives an incentive for them to invest in research and development that can lead to innovative treatments and cures for diseases.

The PTE provision in the United States was established by the Hatch-Waxman Act in 1984, and it has since been used extensively in the pharmaceutical and biotechnology industries. PTE is a valuable tool for companies seeking to bring innovative new products to market, and it provides a mechanism for ensuring that consumers have access to a steady supply of safe and effective medicines.