What makes pharmaceutical products special?
Pharmaceutical products can normally not be placed into the market unless an approval has been obtained from the medicinal products’s regulatory authorities. This takes several years, creating a special framework having consequences on the options available to gain exclusivity for these type of products.
Why is patent coverage desirable?
Not obtaining proper patent coverage or satisfying the regulatory laws could cost pharmaceutical companies exclusivity rights when a drug is sold in Europe. The loss of exclusivity rights usually entails a substantial decrease in revenue and profit. A study conducted in 2008 by the EU Comission showed that, upon generic, entry the average price of a drug drops almost 20% after the first year and about 25% after two years. This is called sometimes called the “patent cliff”.
What are the type of laws governing exclusivity rights for pharmaceutical products?
The exclusivity rights for new pharmaceutical products are governed in Europe by several types of laws:
We shall briefly discuss the requirements to obtain protection under each one of the above mentioned group of laws and indicate what it the length of the exclusivity which may be gained in each case.
Then, we shall discuss whether there are special measures that need to be taken not to undermine the possibility of obtaining exclusivity under each group.
Patent and Utility Models Laws
Why is patent protection commonplace in the pharmaceutical industry?
Patents are the prevailing route to obtain long term exclusivity for pharmaceutical products.
Patent Laws are not fully unified in across the European Union but the main patentability requirements and the length of protection that can be achieved are uniform and aligned with those stablished under the European Patent Convention.
Patent Laws in Europe- as in the vast majority of countries in the world- allow to get 20 years exclusivity for inventions which are new and have an inventive step. The 20 years are counted from the date of filing of the corresponding patent application.
Are there other ways to obtain IP-related exclusivity?
As an alternative to patent protection, some countries also offer protection through utility models (or petty patents). These, have a shorter duration (usually between 6 and 15 years depending on the country) and are only available in a few countries because:
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- not all countries contemplate this kind of protection (only 24 of the 41 countries where protection may be obtained through a European patent contemplate also protection through utility model); or
- utility models are not available for pharmaceutical inventions (only 14 from the 41 countries contemplate utility model protection for pharmaceutical inventions). These countries are Albania, Austria, Belgium, Czech Republic, Germany, Denmark, Estonia, Finland, France, Croatia, Ireland, The Netherlands, Slovenia and Slovakia.
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We have recently published two articles in this blog where we explain this protection figure in detail. We invite you to read more abou utility models: Part 1 and Part 2.
European Regulatory Framework
How does the European regulatory framework operate?
In the European Union no medicinal product can be placed on the market of a Member State unless a marketing authorization has been issued. Said authorization may be effected either by the European Commission through the centralised procedure or by national competent authorities through a mutual recognition, decentralised or national procedure.
The requirements and procedures for marketing authorisation are primarily laid down in Directive 2001/83/EC and in Regulation (EC) No 726/2004.
In order to allow the Authorities to reach the conclusion that the product is safe and effective for its use in humans and to issue said marketing authorization, the applicant should provide, among others, the results of:
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- physico-chemical, biological or microbiological tests,
- toxicological and pharmacological tests, and
- clinical trials
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For ethical reasons, when a product has already been authorized to one company (the originator), it is permitted under certain circumstances that another company (typically a generic company) avoids repetition of costly clinical trials to comply with the last of the above mentioned requirements when the data obtainable from said clinical trials have already been provided in the regulatory filings made by the innovator company.
The above described regulatory framework also allow for other kinds of exclusivities which shall be described below.
Data and Market Exclusivity1
Under the system that entered into force in late 2005, when a company (typically a generic company) wants to request an authorization for a generic medicinal product2 relying on the data present in the regulatory filings made for the reference medicinal product by the innovator company, he needs to wait at least 8 years from the date of the authorization on which he wants to rely upon.
This 8 years period is frequently called “data exclusivity period”. The Authority will not accept an application for a generic medicament until these 8 years have expired.
In addition, the generic company shall not be allowed to market their product until 10 years after the first marketing authorization for the reference medicinal product, i.e. 2 years after the end of the “data exclusivity period”. This 2-years period is frequently called “market exclusivity period”.
The above mentioned period of 2 years may be extended for an additional 1 year if the innovator company obtains, for the relevant medicinal product, a new marketing authorisation for a significant new indication that brings a significant clinical benefit in comparison with existing therapies.
Is there any kind of market exclusivity having a broader scope?
As explained above, the 10-year market exclusivity precludes the marketing of generic product3 , i.e. a product which is a generic of the first authorized product (i.e. the reference medicinal product).
Nevertheless, in the case of medicaments directed to the cure of “rare” diseases (so-called Orphan Drugs), a special exclusivity is available to preclude not only the marketing of “generic medicinal products” but also of similar medicinal products4 for the same rare “disease”.
Exclusivity for Orphan Drugs5
A medicinal product may obtain designation as an orphan drug if its sponsor can establish that:
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- it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10.000 persons in the Community when the application is made, or
- it is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the Community and without incentives it is unlikely that the marketing of the medicinal product in the Community would generate sufficient return to justify the necessary investment; and
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there exists no satisfactory method that has been authorised in the Community or, if such method exists, the medicinal product will be of significant benefit to those affected by that condition.
When an orphan medicinal product is authorized, neither the Community nor the Member States shall, for a period of 10 years, accept another application for a marketing authorisation, or grant a marketing authorisation or accept an application to extend an existing marketing authorisation, for the same therapeutic indication, in respect of a similar medicinal product6.
Thus, orphan drug designation allows the obtention of 10 years of market exclusivity having a broader scope as it precludes not only generics but also products which are not identical but have the same principal molecular structural features and act via the same mechanism.
This 10 years period may be reduced to six years if, at the end of the fifth year, it is established, in respect of the medicinal product concerned, that the above mentioned criteria are no longer met, inter alia, where it is shown on the basis of available evidence that the product is sufficiently profitable not to justify maintenance of market exclusivity.
Is the 20 years term for patents extendable in some way?
Although the patent term is fixed as 20 years from the patent filing date a complementary figure has been created whereby the effects of a patent can be prolonged in respect of authorized medicinal products in certain circumstances. This complementary type of IP right is named Supplementary Protection Certificate.
Supplementary Protection Certificates7
Supplementary protection certificates (SPCs) were created to compensate the loss of patent protection for pharmaceutical products that occurs due to the lengthy testing and clinical trials these products require prior to obtaining compulsory marketing approval.
Where in Europe are SPCs available?
SPCs are currently available in the 30 countries members of the European Economic Area8 and also under the national law of the following non-EEA countries Albania, Bosnia and Herzegovina, Georgia, Moldova, the Republic of North Macedonia, the Republic of Serbia and Switzerland.
Until 31 December 2020 the EU regulations concerning SPCs apply to the United Kingdom. After this date, the situation shall depend on the terms of “Agreement on the New Partnership of the EU with the United Kingdom”9 which is presently been negotiated between both parties.
How long can SPC protection last?
An SPC can extend a patent right for a maximum of five years. The exact duration of an SPC depends from the time elapsed between the filing of the patent on which the SPC is based and the time when the first marketing authorization for the product designated in the SPC is obtained. A six-month additional extension is available if the SPC relates to a medicinal product for children for which data has been submitted according to a Paediatric Investigation Plan (PIP). This will be explained in detail later on.
What is the extend of protection afforded by an SPC?
The protection afforded by a SPC shall lie within the limits of the protection conferred by the basic patent to which it is associated but shall extend only to the product covered by the marketing authorisation and for any use of the product as a medicinal product that has been authorised before the expiry of the certificate.
The above mentioned protection is further limited to allow EU-based companies to manufacture generic or biosimilar versions of an SPC-protected medicine during the term of the certificate, provided that this is done either for the purpose of exporting the product to a non-EU market, or for stockpiling it during the final 6 months of an SPC ahead of entry into the EU market. This is the so-called manufacturing and stockpiling waiver.
Are there further requirements for obtaining an SPC?
SPC law and case law is especially complex and a complete discussion exceeds the object of this article, but some of the most relevant aspects are described below.
The case law of the European Court of Justice has established that for an SPC to be valid the product (i.e. the active ingredient or combination of active ingredients) for which the SPC is sought is/are:
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- present in the authorized medicinal product and
- included within the scope of protection of the patent, and
- specifically identifiable in the patent to which the SPC relates, in the light of all the information disclosed in the patent
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Taking the former into account the following situations relating combinations of active ingredients have been specifically decided by the European Court of Justice:
| CLAIMS DIRECTED TO | AUTHORIZED PRODUCT CONTAINING | PRODUCT FOR WHICH THE SPC IS SOUGHT | IS SPC PERMISSIBLE? |
| A | A | A | YES |
| A | A+B | A+B | NO10 |
| A+B | A+B+C | A+B | YES11 |
| A | A+B | A | YES12 |
| A+B | A | A | NO13 |
| A+B | A | A+B | NO14 |
If I plan to benefit from SPC protection, can I take any special measure when prosecuting my patent application?
Yes, it is important to draft patent applications contemplating that it may be necessary in the future that the product, which is likely to be further clinically developed and for which an SPC may need to be filed in the future, is identifiable in the light of the patent disclosure.
Although, this may not always be possible because patent applications are drafted very early during the development of a drug and, at said early stages, the candidate for further development is not always known, it is worthwhile to take it into account.
If I have already obtained a SPC, may I do something to further extend protection?
Yes, under some circumstances I could extend the duration of the SPC by carrying out clinical studies on a paediatric population. This is called, a paediatric extension of the SPC.
Paediatric Extensions15
Since July 2009 new marketing authorisations for medicinal products must, as a general rule, include the results of studies performed and details of information collected in compliance with a paediatric investigation plan (PIP) previously agreed with the regulatory authority.
In the case of medicines that are already authorised and are protected either by a patent or an SPC, such results must be included in any application for the authorisation of new indications, including paediatric indications.
If the former requirements are complied with and if the product is authorised in all Member States, the holder of any supplementary protection certificate (SPC) shall be entitled to a six-month extension of the term of said SPC. However, this extension does not apply in the following situations:
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- the authorised product is designated as an orphan medicinal product.
- a one-year extension of the period of marketing protection for the product concerned has been obtained (on the grounds that the new paediatric indication brings a significant clinical benefit in comparison with existing therapies).
The legal complexity of the pharmaceutical environment necessitates that players in the field take a holistic approach to protection and considers the various existing alternatives and the way they are intertwined.
- Regulation (EC) 726/2004
- The medicinal product must be essentially similar to the already-authorized innovators’ product.
- A ‘generic medicinal product’ is defined as a medicinal product which has the same qualitative and quantitative composition in active substances and the same pharmaceutical form as the reference medicinal product, and whose bioequivalence with the reference medicinal product has been demonstrated by appropriate bioavailability studies.
- Regulation (EC) No 847/2000 defines that a “similar medicinal product” contains either an identical active substance, or an active substance with the same principal molecular structural features (but not necessarily all of the same molecular features) and which acts via the same mechanism.
- Regulation (EC) 141/2000
- However a marketing authorisation may be granted, for the same therapeutic indication, to a similar medicinal product if said similar product is safer, more effective or otherwise clinically superior
- Regulation (EC) 469/2009
- These countries are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden
- Relevant articles are 40 and 41
- C-322/10 Medeva
- C-322/10 Medeva
- C-422/10 Georgetown
- C-518/10 Yeda
- C-518/10 Yeda
- Regulation (EC) 1901/2006
