Tuesday, November 19, 2013

Draft Trans-Pacific Partnership Treaty – Prohibition on Requiring Enhanced Efficacy of Pharmaceuticals

The leaked TPP treaty has a number of provisions concerning medically related claims. My last post dealt with second medical use claims.This post deals with a proposed prohibition on any requirement of enhanced efficacy for pharmaceuticals, which is addressed in Art E.1(1)(b). The following provision is proposed by the US and Australia, and opposed by all others, except Japan, which is still considering:

Article QQ.E.1: {Patents / Patentable Subject matter}
1. The Parties confirm that:
(b) a Party may not deny a patent solely on the basis that the product did not result in enhanced efficacy of the known product when the applicant has set forth distinguishing features establishing that the invention is new, involves an inventive step, and is capable of industrial application.

I don’t have a specific context for this, but on its face this provision is aimed at precluding national legislation which would require enhanced efficiency as an additional condition of patentability for pharmaceuticals, presumably in an attempt to deal with pharmaceutical patent “evergreening.”

Evergreening refers to attempts by pharmaceutical companies to extend the effective protection for a drug by patenting minor modifications. While this concept is commonly invoked, the relationship of patents to evergreening is not straightforward. The direct counter-argument is that a patent for a minor modification, such as an extended release formulation, or a formulation which permits a less frequent dosing regime, cannot extend the term of the underlying patent. Generics will be free to sell the original drug once its term expires, and if the patent for the improved version really is minor, then doctors do not have to prescribe, and payors do not have to reimburse, for the improved version. The patient may have to take their pill twice a day, rather than once a day, but if this is really a minor issue, then no real harm is done. On the other hand, if the improvement is significant – if a once a week formulation has much higher compliance than a twice daily formulation – then the improvement is not really minor at all, and it is important to provide an incentive to create these valuable advances. With that said, practices such as “product hopping” – marketing the new version and discontinuing the old prior to expiry of the patent on the old product, in order entrench the improvement prior to generic entry – might enable evergreening. That is, the patent system itself cannot directly enable evergreening, but the patent system in conjunction with marketing strategies and other regulatory mechanisms, might create a real problem. (See here for a suggestion as to how the automatic stay under the NOC regime can result in a form of evergreening)

This more subtle form of evergreening raises real and complex issues, but it seems to me that requiring enhanced efficacy for improvement pharmaceutical patents is probably not a good response. The patent examination system is not institutionally equipped to deal with pharmaceutical efficacy, which is normally dealt with by the health regulatory authority which grants marketing authorization. At best, mistakes will be made, so that patents will be denied to pharmaceutical inventions which are not merely evergreening, but real improvements. At worst, such a provision might be used TO systematically deny patents to important improvements. Another way to prevent evergreening would be to use the health regulatory system to refuse approval to formulations which do not provide enhanced efficacy. This would still effectively prevent evergreening, because the patentee will not be able to product-hop if the new product is not approved, and if the improvement really is minor, there is no harm to public health by denying access. This approach would have two advantages over using the patent system. First, the decision as to efficacy would rest with the body with institutional competence to make such an assessment. Secondly, the incentive structure is different. If marketing authorization is denied, no one can sell the drug, which means there will be no incentive to free-ride.

At this point, I should probably re-iterate my disclaimer: all of these comments are tentative. Evergreening is a particularly complex topic because the mechanism is not straightforward, and I have to admit that this is not a topic I have studied in depth.

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