The European Union is often held up as an example of biosimilar success relative to the United States, but in a new white paper, Medicines for Europe describes an intellectual property briar patch into which competitor generic and biosimilar companies dare not get thrown for fear of endless entanglements.
The pharmaceutical industry has a “social contract” to bring affordable and life-saving medicines to market, but increasingly, exploitation of the legal framework for supporting patent rights is undermining this contract, change proponents said in a virtual conference timed with the release of the paper.
“This reduction in adherence to that social contract is getting worse. The tactics are being employed in a more sophisticated manner—more vigorously than ever before,” said James Burt, executive vice president of Europe, Middle East, and North Africa for Accord Healthcare.
Europe's Version of Patent Thickets
In the United States, industry observers often describe “patent thickets” thrown up by originator drug companies to protect their products from competition. These multiple patents make it difficult for biosimilar and generic companies to weed out the patents that count from the ones that don’t, and addressing each patent involves a commitment of time and money that may delay a lower-cost competitor product from reaching market.
In Europe, patent thickets also exist and are made worse by regulatory and legal standards that enable the spawning of “divisional patents” that are filed after the original patents and effectively subdivide the intellectual property, leading to costly and time-consuming courtroom debates over patent validity, authors of the paper wrote.
These divisional patents are filed in “cascades” to take advantage of laws that keep competitor products off the market until disputes over intellectual property are resolved. In actuality, those resolutions may never happen, said Corinna Sundermann, head of Intellectual Property in the Pharma Division at Fresenius Kabi, a Bad Homburg, Germany-based biosimilar developer.
“Legal certainty” is the standard for whether a competitor product is likely to infringe an originator company’s product, and “We do not reach legal certainty because there is always a divisional pending,” Sundermann said. “The problem here is that the European Patent Office allows an unlimited number of divisionals.”
In some cases an original or “parent” patent of dubious merit that seems likely to fail a court examination will be withdrawn by the innovator company “before its revocation,” but divisional patenting on that same product may continue, “and this changes the situation completely,” Sundermann said.
Suspicious Patent Filing
The theory is that divisionals are supported by new findings that might not have been appropriately defined and protected by the original patent; however, the late-term discovery of information supporting a divisional application does tend to arouse suspicion, Sundermann said. “No one can tell me," she added, "that 7 years after the launch of a product a patentee finds out that there is new experimental data” that is worthy of enhancing exclusivity protections for a given product.
Divisional patent filings have become a significant problem in Europe recently, she said. Another problem faced by generic and biosimilar companies is “patent linkage,” which prevents biosimilars and generics from entering market until patent status for an originator product is resolved; therefore, a mere claim of infringement by an innovator company can interfere with marketing authorization (MA) for a competitor product. Patent linkage is prohibited under European law but forms of it still exist, according to the white paper.
“Despite this system of mandatory arbitration having come to an end, an application for an MA continues to be considered to be grounds for patent infringement proceedings in Portugal,” authors of the paper wrote. Slovakia and Hungary also were singled out as countries where this occurs.
As in the United States, product hopping, or abrupt switches to somewhat different drug versions by innovator companies, is a problem in Europe, the paper explained. Hopping by originator companies discourages use of the former products, competitor generics, and biosimilars, because the newer product is assumed to be superior.
Anticompetitive rebates, which undercut the lower prices of biosimilars and generics and interfere with payers’ formulary decisions, are rife in Europe, too, the authors wrote. Product “denigration,” or misleading statements about competitor products, also was the focus of several pages of discussion in the report.
All of these issues make competitor companies very reluctant to enter the market, and this has dire implications both for patients and the health of the pharmaceutical sector, speakers said. “We have to address the sustainability problem of the off-patent sector [generics and biosimilars], otherwise we won’t have one. It’s going to shrink,” Burt said.
“Whatever the innovators do to hold off competition will be far more lucrative than any recourse they might be made to bear if they’ve overstepped,” he added. “This is one of those situations where heads the brand industry wins, tales the generic industry loses.”
Reference
Vidal R, Drew C, Lavin B, Ellis B, Bruce E; Legal Affairs Committee of Medicines for Europe. Anatomy of a failure to launch: a review of barriers to generic and biosimilar market entry and the use of competition law as a remedy. Medicines for Europe. Published November 5, 2020. https://ift.tt/2GybH0j
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