Contributions from Intellectual Property Consultant Anna McKay

I missed you last month, and am glad to be writing again.

I have elected not to write about the new draft Directive on Biosimilars because such a lot is written about Biosimilars.  There has been a plethora of conferences on the topic, and in any event, I imagine that the number of you working on biosimilars is limited.  If you would like to know more about biosimilars, let me know.  And of course, we now have two biosimilars on the EU market, Omnitrope (Sandoz), and Valtropin (Biopartners) both of which have been shown to be similar to Pfizer’s Genotropin.

Sandoz is offering Omnitrope at a price which is an approximate 20% discount to Pfizer’s product, and Valtropin is expected to be priced similarly.  Prices are thus quite a lot higher than other generic products – and this reflects production difficulties, and high barriers to market entry.

I am instead writing about the new European Council Regulation which allows companies to produce copies of patented medicines under licence for export to “countries in need” which do not have sufficient capacity to produce them.  This is the latest step in a process that began with the Doha Declaration of the TRIPS Agreement and Public Health in 2001. 

In 2003 there was a provisional decision on compulsory licensing, and in December 2005 WTO members agreed to amend TRIPS to make that decision permanent.  The Council’s Regulation implements within the EU necessary conditions to meet the December 2005 WTO Agreement.  Under this agreement EU authorities can grant compulsory licenses for production of copies of patented medicines if certain conditions are fulfilled.

Any WTO member will be able to export pharmaceutical products made under compulsory license for the purpose of supplying developing countries with no or insufficient manufacturing capacities in the pharmaceutical sector.  The amendment will take effect once two thirds of WTO members have accepted it and that is expected during 2007.

Within Europe, companies will be able to apply for a licence to manufacture patented products without the patent holder’s authorisation for countries in need of medicines which face public health problems.  There is no specific restriction of products covered, although the context of the decision is that they should be products which are required to address public health problems.  So products for malaria and AIDS, seem to me to be covered, but possibly not drugs to treat conditions which have not yet arisen, such as flu.  And not drugs for conditions which cannot be described as ‘public health’ problems.  So not osteoporosis or diabetes.

Developing countries need to notify the WTO of medicines they need, and it is then up to generic companies to apply for licenses to manufacture them.

I imagine that applications for licenses will be made in a way that is similar to applications for generic products today.  But there is an inter-relationship between Patent Law and Regulatory Law which is not clear.

Once the products have been exported, they are not to be re-imported into the EU.  Any goods which were to be imported into the EU would be treated as infringing patents.  In effect, they would be treated like parallel imports from non-EU countries.  Customs authorities would have the right to take against their re-importation, and I imagine that any seller, whether  cognisant or not of the fact that the goods were intended for a developing market and had not been licensed for sale in the EU, would be infringing patents.  There would be no question of an implied license, no parallel would be drawn between the cases involving re-importation of goods intended by patentees for developing countries (GSK v  Kohlpharma, GSK v Dowelhurst).

The safety and efficacy of medicines exported in this way would be certified through the EU’s  Scientific Opinion Procedure, or equivalent national procedures.  It was felt that this would compliment the licensing mechanism, and assist importing countries.

I have many, many questions concerning this regulation.  Considering its purpose, the most fundamental is what constitutes “a developing country with no or insufficient manufacturing capacities in the pharmaceutical sector”.  This won’t include India.  It won’t include South Africa.  Pharmaceutical companies within those countries may be able to satisfy local needs, although there are problems with that too….

What about countries which have a pharmaceutical sector, but one which is not equipped for certain drugs which it needs?  Can those be supplied?  If the country concerned, and a general company supplying makes what is later decided to be an error of judgment, is that patent infringement?  Or, would it be regarded as an omission of the regulatory body which granted the license, the pharmaceutical company being free from responsibility?