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A company’s predicted value and growth can be affected by the term of a patent covering their key product. Therefore, extending the life of the relevant patent(s) or market exclusivity of that product becomes important in determining potential return on investment. Some of the ways of extending patent life and market exclusivity of a product are:-
The key factors for each of these provisions are briefly discussed below.
USA - There are two forms of patent term extension in the US:-
This calculation does not take account of any delays which may be incurred in the future during regulatory approval, according to Drug Price Competition and Patent Term
Restoration Act of 1984, (Hatch-Waxman Act), i.e. the PTE.
The regulatory review period in the US consists of two periods of time: a testing phase and an approval phase. For human drug products the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with an initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Calculation of the extension period for regulatory delay is carried out by adding half of the testing phase to the whole of the approval phase (35 U.S.C.156 (g) (1) (B)).
Up to a maximum of five years PTE can be obtained, depending on the time taken for the two phases of approval.
In both cases and unlike in Europe the whole patent is extended.
EUROPE - once a product has received marketing authorisation, a maximum of 5 years of
extra market exclusivity for the product covered by a patent can be obtained, and is termed a Supplementary Protection Certificate (SPC).
The SPC term is added to the end of the patent term and is granted in respect of an active ingredient, or combination of active ingredients of a medicinal product, or a process to obtain the product (Council Regulation (EC) No. 469/2009). In contrast to the US patent term extensions, the SPC does not extended the term of the whole patent.
At the time the application for an SPC is made, the patent covering the product/process must be in force and the product must have received a Marketing Authorisation (MA). Article 13 of Regulation (EEC) No 1768/92 states that:
i) The term of an SPC takes effect at the end of the patent term and has the same rights to stop infringers as a patent for the product covered by the SPC.
ii) The term of the SPC is equal to the period which elapsed between the date on which the application for a basic patent was lodged and the date of the first authorisation to place the product on the market within the European Economic Area (EEA), reduced by a period of five years; and
iii) The term may not exceed five years from the date on which the SPC takes effect. An example of how to calculate the term of an SPC is provided below:-
assuming that the relevant patent application was filed on 7 May 2003 (which would normally expire on 6 May 2023) and the first MA was obtained on 7 May 2015, the SPC term is calculated as follows;
(7-05-2015) – (07-05-2003) – 5 years = 7 years (capped at 5 years)
Thus, even though the patent expires in 2023, the exclusivity period for the product covered by the MA would continue until the SPC expired in 2028.
Children are subject to many of the same diseases as adults, and by necessity, are often treated with the same drugs. However, only a small fraction of all drugs marketed has been studied in paediatric patients, and a majority of marketed drugs are not labelled, or are insufficiently labelled, for use in paediatric patients. The absence of paediatric testing and labelling poses significant risks for children.
USA - In 1997, the US Congress enacted a new law that provides marketing incentives to manufacturers who conduct studies of drugs in children. In exchange for clinical studies in children patentees receive a six-month exclusivity term added on at the end of their intellectual property rights, i.e. patent term, patent extension for regulatory delay and data exclusivity periods (this protects the clinical data package used for applying for regulatory approval). The six-month period is added to each one of these intellectual property rights listed in the Orange Book at the time the paediatric exclusivity is awarded, although usually it will only be the term which expires last for which the paediatric extension will be significant, and during the six-months of paediatric exclusivity the FDA will not approve any aNDA.
EUROPE - On 26 January 2007, a new EU legislation [Regulation (EC) No 1901/2006 as amended by 1902/2006] came into force introducing a requirement to conduct paediatric studies in paediatric indications and possible rewards for completing such studies. One of the rewards is a six-month extension to the term of an SPC, another is the ‘+1’ year of exclusivity of the data exclusivity period. If a product is not covered by an SPC or patent qualifying for an SPC, for example where all such property has expired, then the product can benefit from the full data exclusivity (under the 8+2+1 rules ) under a separate Paediatric Use Marketing Authorisation (PUMA) for a new indication exclusively developed for use in children.
Under the Regulation any company submitting a new marketing authorisation application will have to provide the results of paediatric clinical trials based on a Paediatric Investigation Plan (PIP) to be agreed with the European Medicines Agency's (EMEA) new paediatric committee. If a product is not suitable for use in children companies can request a waiver from this requirement (for example medicines for Alzheimer's disease) or if complying with the requirement would delay authorisation of the product in adults the company can request a deferral for completing the PIP.
There are a number of restrictions to the availability of the SPC paediatric extension:
(i) In contrast to the US, the SPC extension will only be available if the patentee has an SPC, it is not available to extend the term of the basic patent;
(ii) The extension will only be available if the product is authorised in all member states.
(iii) Orphan drugs will benefit from an additional two years of market exclusivity added to the existing ten years granted under EU orphan legislation provided the orphan drug is authorized in all member states. The SPC paediatric extension is then not available.
(iv) The extension must be applied for either with the SPC application itself or whilst the SPC application is pending. If the SPC has already granted the application must be made not later than two years before expiry of the SPC.
Once a paediatric SPC extension has been granted the holder of the extension will have the same rights as under the SPC and therefore would be able to sue a party for infringement if they launched a product, without permission from the holder of the extension, prior to expiry of the extended SPC.
Further information and guidance with respect to requirements under the Paediatric Regulation can be found on the European Medicines Agency (EMEA) website.
i) Pharmaceuticals / small molecules
USA - The data exclusivity provisions in the US are similar to that in Europe as discussed below, typically allowing for a period of 5 years data exclusivity following US Food and Drug Administration (FDA) approval provided that the product has not previously been approved and 3 years for new indications for pharmaceutical drugs.
EUROPE - The data exclusivity provisions in Europe are an automatic right and provide for a maximum period of 10 years from the first marketing authorisation (MA) before a competitor can place that product on the market using the clinical trial data (Directive 2004/27/EC). A 1 year extension for a new use may also be available. A competitor may apply for a marketing authorisation after 8 years. This runs in parallel to the patent term and once the patent has expired a competitor is free to conduct their own clinical trials. This often termed the "8 + 2 + 1" year approach explained below:-
A 'biosimilar' is a biological medicine that is similar to another biological medicine that has already been authorised for use. Biological medicines are medicines that are made by or derived from a biological source, such as a bacterium or yeast. They can consist of relatively small molecules such as human insulin or erythropoietin, or complex molecules such as monoclonal antibodies.
Biosimilars can only be authorised for use once the period of data exclusivity on the original 'reference' biological medicine has expired. In general, this means that the biological reference medicine must have been authorised for at least 10 years before a similar biological medicine can be made available by another company.
USA - The Patient Protection and Affordable Care Act (Affordable Care Act), signed into law by President Obama on March 23, 2010, amends the Public Health Service Act (PHS Act) to create an abbreviated licensure pathway for biological products that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed biological product. A biosimilar product is a biological product that is approved based on a showing that it is highly similar to an FDA-approved biological product, known as a reference product, and has no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilar products.
Biosimilars cannot be filed until 4 years after the biologics licence application approval, and cannot be approved until 12 years after biologics licence application approval. The 12 year period takes account of the increased regulatory approval requirements due to the more complex nature of the drug. This gives 12 years of data exclusivity in the US for biologics.
EUROPE - The situation in Europe is similar to the US except that 10 years data exclusivity is available following initial authorisation of the biologic, before a generic may be placed on the market.
The FDA’s publication “Approved Drug Products with Therapeutic Equivalence Evaluations”, also known as the Orange Book identifies drug products approved on the basis of safety and effectiveness by the FDA under the Federal Food, Drug and Cosmetic Act.
The main criterion for the inclusion of any product is that the product is the subject of an application with an effective approval that has not been withdrawn for safety or efficacy reasons. Inclusion of products on the List is independent of any current regulatory action through administrative or judicial means against a drug product. In addition, the List contains therapeutic equivalence evaluations for approved multisource prescription drug products. These evaluations have been prepared to serve as public information and advice to state health agencies, prescribers, and pharmacists to promote public education in the area of drug product selection and to foster containment of health care costs. Therapeutic equivalence evaluations in this publication are not official FDA actions affecting the legal status of products under the Act.
Innovator companies have the opportunity to list composition and method of use patents that cover the drug compound and this has the advantage that generic companies intending to make or sell a drug that arguably infringes the listed patent must by law notify the patent owner of possible infringement (also known as a paragraph IV certification). Once notified the patent owner can file a lawsuit for patent infringement within 45 days of notification and provided they do this, a 30 month stay is triggered before the generic company can sell the drug, subject to FDA approval.
Currently the Orange Book only lists “composition” or “method of use” patents, for example particular formulations, dosages and methods of treating certain diseases. Process patents covering methods of manufacture are not permitted to be listed.
USA - The Orphan Drug Designation program in the US provides orphan status to drugs and biologics which are defined as those intended for the safe and effective treatment, diagnosis or prevention of rare diseases/disorders that affect fewer than 200,000 people in the U.S., or that affect more than 200,000 persons but are not expected to recover the costs of developing and marketing a treatment drug. Similar provisions are provided under the Orphan Drug Act 1983 in the US, where 7 years of market exclusivity is granted after FDA approval for pharmaceutical products.
EUROPE - For a product to be classed as an orphan medicine, it must be intended for the diagnosis, prevention or treatment of either:
There must also be either no satisfactory method of diagnosis, prevention or treatment of the condition concerned, or, if there is such a method, the new medicine must be of significant benefit to those affected by the condition.
In the EU, diseases which are defined as rare are entitled to 10 years marketing exclusivity following marketing authorisation (Regulation (EC) No 141/2000).
The Regulation states that market exclusivity should be limited to the therapeutic indication for which the product designation has been obtained and does not prevent the marketing of a similar product for treatment of the condition.
Orphan drug exclusivity provisions differ from the data exclusivity described above in that even if the data supporting a marketing application is in the public domain, a competitor filing a later application in respect of the same product would be prevented from market entry for 10 years from the grant of a first authorisation. Therefore orphan drug market exclusivity provides a barrier to market entry regardless of the availability of clinical trial data.
The 10 year period is not fixed and may be reduced to 6 if at the end of the 5 year period there is evidence that the product is sufficiently profitable and no longer justifies its orphan status.
As part of strategic IP management, the above term extensions and market exclusivity provisions should be considered. Please contact Stratagem for further advice.
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