Contemporary Issues in Pharmaceutical Patent Law

Setting the Framework and Exploring Policy Options

Bryan Mercurio, Daria Kim

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781317389781
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

This collection reflects on contemporary and contentious issues in international rulemaking in regards to pharmaceutical patent law. With chapters from both well-established and rising scholars, the collection contributes to the understanding of the regulatory framework governing pharmaceutical patents as an integrated discipline through the assessment of relevant laws, trends and policy options. Focusing on patent law and related pharmaceutical regulations, the collection addresses the pressing issues governments face in an attempt to resolve policy dilemmas involving competing interests, needs and objectives. The common theme running throughout the collection is the need for policy and law makers to think and act in a systemic manner and to be more reflective and responsive in finding new solutions within and outside the patent system to the long-standing problems as well as emerging challenges

1 Introduction

A Holistic Approach to Pharmaceutical Patent Law and Policy

Bryan Mercurio and Daria Kim

Amongst the most important changes to the evolution of the world trading system was the formulation of the common minimum standards on the international protection of intellectual property (IP). This is not to downplay other significant results of the Uruguay Round of trade negotiations and the creation of the World Trade Organization (WTO), but to underscore the far-reaching impact of the incorporation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement) into the trade regime on international trade and domestic legal order of the WTO Member States.

Negotiated with the aspiration to attain mutual economic benefits and further economic development, ostensibly, the key factor in the negotiation of the TRIPS Agreement was to connect trade and innovation.¹ The thinking at the time of industry and demandeur of the governments was that IP is inherent in most (if not all) trade in goods and that counterfeiting and piracy were costing inventors fortunes in lost revenue. With these goals in mind, negotiators crafted the most comprehensive international IP agreement, expanding on the earlier Paris and Berne Conventions in topical coverage and depth.

At the time, very few if any negotiating countries or non-governmental organizations (NGOs) attempted to evaluate to what extent and at what expense the final agreement contribute to the desired aspirations. More strikingly, even as more than 20 years have passed since the advent of the TRIPS Agreement, there still remains a dearth of solid, unbiased empirical research on the extent to which the initial objectives have been achieved and at what costs.² Despite what can be termed a lack of reflection among Members, and therefore with a limited understanding of the impact of the incorporation of IP upon the WTO on the domestic and global level, the international experiment of designing IP rules within the trade framework continues – predominantly, in the direction of the maximization of protection with the proliferation of bilateral and regional free trade agreements (FTAs).³

One of the areas where policy-makers, industry players and scholars have not spared resources and rhetoric is pharmaceutical patent law. Concerns over the increasing cost of healthcare, decreasing productivity of drug research and development and the need for an alternative system to promote medical innovation to replace or stand side-by-side to patents are subject to the ongoing debate. Meanwhile, the growing complexity of the global disease burden⁴ and astronomical costs of developing and bringing a new successful drug to the market has led some commentators and governments to question the conventional system and search for new regulatory approaches. This suggests that the design of domestic and international IP rules is still very much a “work-in-progress”, and Members of the WTO need not be constrained to what was agreed to in the Uruguay Round but instead should be more reflective and responsive in finding new solutions within and outside the patent system.

The present collection aims to contribute to the understanding of the regulatory framework governing pharmaceutical patents as an integrated discipline through the assessment of relevant laws, trends and policy options. Focusing on patent law and the related regulatory framework, this book deals with the most important and pressing issues governments are facing in an attempt to resolve the policy dilemma over competing interests, needs and objectives. In doing so, it undertakes a topical approach. Each chapter addresses a specific set of issues posed against the background of the pertinent international framework and discourse. The common theme throughout the collection is the need for governments to think and act in a systemic manner and break away from the “silo” method of dividing responsibilities between various government departments that rarely, if ever, communicate or act in concert.

The need for an integrated, systematic approach is of contemporary importance as critical aspects of pharmaceutical law are being determined through negotiations of FTAs. The latter have developed as the antithesis of a thorough and holistic government review and is troublesome for a number of reasons. Not least is the impact of pharmaceutical patent-related provisions upon the affordability of innovative medicines. Meanwhile, healthcare costs have been rising in most places at a far greater rate than gross domestic product (GDP). Given this it is surprising how few governments have ever taken steps to assess the impact of healthcare-sensitive provisions within the patent system since the adoption of the TRIPS Agreement,⁵ and how many have readily agreed to TRIPS-plus provisions in FTAs.

The premise of this collection is that international IP law provides a sufficient scope for countries to exercise flexibilities and align national laws and regulations with domestic needs and priorities.

The background

This book is a part of a larger government-funded project entitled “Intellectual Property Rights and the Pharmaceutical Industry: Evaluating Hong Kong’s Regulatory Framework” (Hong Kong General Research Fund (GRF) No. CUHK450012). While this volume focuses on global issues and trends, its analytical framework and findings lay the groundwork for the subsequent monograph that explores law and policy options for Hong Kong.

In order to ensure a broad appeal, each chapter is structured in order to first provide the relevant context under international framework (i.e. the TRIPS standard) and recent trends (i.e. unilateral amendments or developments coming out of FTAs) before evaluating the situation in specific jurisdictions and potential policy options. In this way, readers can gain an appreciation of each issue from a broad, internationally relevant perspective and will be able to translate them into the local context.

The majority of the chapters are based on the conference hosted by the Faculty of Law of the Chinese University of Hong Kong on 23–24 June 2014. But unlike most conference collections, the conference was based upon the book project rather than the reverse. To ensure coherence and commonality among the various contributions, the editors carefully assigned each topic to the chosen contributors. A few chapters have been added later on in order to provide a more comprehensive topical coverage and to account for new developments.

Contributors and contributions

The remainder of the collection includes 10 chapters and is divided into three parts: Part I focuses on patent and related types of protection for pharmaceuticals; Part II explores flexibilities under the TRIPS Agreement; and Part III adopts a broader view on incentives for pharmaceutical innovation and discusses approaches to impact assessment. The book concludes with a review of the recently completed Trans-Pacific Partnership (TPP) – perhaps the largest and most important FTA ever negotiated.

Following this introduction, Part I begins with a chapter by Roberto Romandini and Henning Grosse Ruse-Khan. The authors provide a detailed analysis of the scope of discretion that WTO Members have in defining standards of patentability for pharmaceutical inventions. Adopting an anecdotal approach, which looks deeply at issues raised before European, US and Asian courts, the authors scrutinize how Article 27 of the TRIPS Agreement applies to patentability of new medical uses and forms of known substances, and how it accommodates the specifics of biotechnological inventions. The authors also question the TRIPS-compatibility of the trend in FTAs to eliminate certain flexibilities which are themselves consistent with the WTO obligations.

In Chapter 3, Yaniv Heled focuses on the complex and emerging issues of biologics – a relatively novel and highly complex class of medicinal products promising unprecedented health benefits. The chapter reviews the approaches enacted in the European Union and the US to marketing approval and regulation of such medicines, discussing the latest developments in the context of the TPP. The author offers suggestions for countries seeking to institute their own regimes for approval of follow-on biologics that can balance the broad access to innovative medicines with the need to maintain incentives for innovation.

In Chapter 4, Owais Hassan Shaikh traces the evolution of test data exclusivity for pharmaceutical products in national laws implemented primarily through FTAs. Having developed a novel Index for Test Data Exclusivity and Access (IDEAS), Shaikh uses it as a tool for the comparative analysis of data exclusivity provisions under the FTAs and national laws by measuring their capacity to promote access to both originator and generics medicine. He argues that test data exclusivity lacks a plausible justification as an incentive for innovation in the presence of patent protection, and that it has a restrictive impact upon access to medicine. Using IDEAS, the author proposes recommendations for negotiating protection obligations regarding test data under FTAs, as well as their implementation in domestic laws.

In Chapter 5, Bryan Mercurio focuses on patent linkage – the practice of national pharmaceutical registration authorities of “linking” the grant of marketing approval for a generic drug with the patent status of an originator drug. The chapter begins with a review of current practices and highlights the differences in which patent linkage operates in various jurisdictions. Finding that potential negative effects of patent linkage are heavily dependent upon the construction of the patent linkage clause, Mercurio offers not only cautionary advice on the benefits and costs of this emerging practice, but also recommendations for a model patent linkage provision.

Part II begins with a chapter by Carlos Correa on the regulatory review exception (so-called the “Bolar exception”), which allows generic pharmaceutical companies to use the patented subject matter for the purpose of preparing an application for marketing approval prior to the expiration of the patents covering a branded drug. Following an introduction setting out the regulatory requirements for marketing approval of pharmaceutical products and examining the TRIPS-consistency of the exception given the important panel decision in Canada vs Pharmaceutical Patents, Correa reviews how certain countries have already instituted Bolar exceptions and offers a discussion on several issues that other jurisdictions need to consider in drafting Bolar-type provisions.

In Chapter 7, Justice Chang-fa Lo discusses the meaning and functions of compulsory licensing for patents, the requirements under the TRIPS Agreement, and trends of its application in relation to pharmaceutical products. Justice Lo recognizes the realities of its use, in particular, that affluent markets with an interest in maintaining a high level of IP protection are unlikely to make use of this flexibility absent national urgency. Focusing on the developing countries, the chapter outlines the factors that should be considered when adopting compulsory licensing in an attempt to maintain the balance between the accessibility of affordable drugs and protection of legitimate interests of patent holders.

In Chapter 8, Xavier Seuba, Luis Mariano Genovesi and Pedro Roffe make the case for the exception from patent protection for drug manufacturing for exportation. Novel and controversial, the authors argue that such exception is consistent with international norms of patent protection, when pharmaceutical products covered by patent(s) are manufactured and exported to countries where they are not protected. In doing so, the authors offer a detailed review of the existing TRIPS standards and flexibilities, with a particular focus on Article 30 of the TRIPS Agreement.

Part III begins with a chapter by Aidan Hollis and Paul Grootendorst. This contribution diverges from the usual normative analysis by offering empirical estimates of the financial impact of extending test data protection and patent term extension in a small upper-income jurisdiction with a high level of protection for intellectual property rights – Hong Kong SAR. The analysis finds that the costs to payers of such extensions are likely to be modest because generic entry is already relatively slow in Hong Kong. The authors also draw implications for other jurisdictions emphasizing that nominal exclusivity as defined by legal rules is not necessarily equivalent to the actual exclusivity.

In Chapter 10, Daria Kim from the Max Planck Institute for Innovation and Competition reflects on the concept of regulatory integrity in the pharmaceutical sector and addresses concerns related to the increasing role assigned to drug approval regulation in incentivizing pharmaceutical innovation. The analysis focuses on the interaction between the patent system and drug marketing approval regulation. After identifying complexities of welfare analysis of innovation incentives, and in view of the indeterminacy of their cumulative effect on innovation, Kim proposes an approach based on ecological and constructivist types of rationality in decision-making and concludes with policy recommendations. The chapter brings the entirety of the preceding contributions into perspective when discussing the facets of the integrated approach.

In the concluding chapter, Jakkrit Kuanpoth reviews the TRIPS-plus provisions under the comprehensive TPP and argues that they will have a significant impact upon access to essential medicines by limiting countries’ ability to deal with public health problems and by restricting the measures the countries can take to pursue affordable drugs.

This collection offers deep analysis and useful insight into a dynamic area of policy and law-making. Of course, the covered issues and topics are by no means exhaustive. It is our hope and desire that this book can contribute to the field in a positive manner and act as a springboard for further and more targeted research.

Notes

1 Preamble of the Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, The Results of the Uruguay Round of Multilateral Trade Negotiations 320 (1999), 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994).

2 On the complexities of empirical assessment, see the Organisation for Economic Co-operation and Development, Enquiries into Intellectual Property’s Economic Impact (2015).

3 For the analysis of the trend, see Michael Handler and Bryan Mercurio, “Intellectual Property” in Simon Lester and Bryan Mercurio (eds), B...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Notes on Contributors
• 1 Introduction: A Holistic Approach to Pharmaceutical Patent Law and Policy
• Part I Pharmaceutical Patents and Related Types of Protection
• Part II Balancing Patent Protection with Available Flexibilities
• Part III A Broader View on Incentives for Pharmaceutical Innovation
• Index