Insights
A
December 2005 / Issue 17
To view an article, please click on title.
Table of Contents
Implementation of the
so-called “Bolar-Provision” into French Patent Law (France)
What to expect from the German “Grand
Coalition”? (Germany)
Amendment of Medicine act
(Finland)
New pricing
and Reimbursement system in Greece (Greece)
AstraZeneca case - the appeal (Belgium)
Implementation of the so-called
“Bolar-Provision” into French Patent Law
The French Health Ministry is currently drafting a Bill
of law (hereinafter “the Bill”) which is aimed to implement the provisions of
several EC Directive including Directive No 2004/27/EC of the European
Parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC on
the Community code relating to medicinal products for human use (hereinafter
“the Directive”).
The
Bill has been drafted by the “Direction Générale de la Santé, DGS” (General
Health Directorate which is part of the French Health Ministry). It was sent on
26 August 2005 by the DGS to the LEEM, which is the French organization
representing the Pharmaceutical Industry. The LEEM was expected to give its
opinion on the Bill before 12 September 2005.
The
Bill would notably amend French law to implement Article 10.6 of the Directive
which contains a type of “Bolar exception”, as it is known in US legislation.
Article
10.6 of the Directive indeed stipulates that “conducting the necessary studies
and trials with a view to the application of [the abridged procedure for
obtaining a marketing authorisation for generic medicinal products] and the
consequential practical requirements shall not be regarded as contrary to
patent rights or to supplementary protection certificates for medicinal
products”.
French
law currently contains a research or experimental use exception which can be
found in Article L. 613-5 of French
Intellectual Property Code (CPI) which stipulates that “The rights afforded by the patent shall not
extend to: […] (b) acts done for experimental purposes relating to the subject
matter of the patented invention […].”
Additionally,
the current version of the first paragraph of Article L. 5121-10 of the French
Public Health Code (CSP) stipulates that a market authorization for a generic medicinal product can be granted by
AFSSAPS (French Agency for Sanitary
Safety of Health Products) before the expiration of the
patent rights related to the reference medicinal product.
According to Article 10 of the Bill, Article L.
5121-10 of the CSP would read (we pointed out new provisions in bold):
“For a generic medicinal product as defined in
paragraph 5 of Article L. 5121-1, a market authorization can be granted before
the expiration of the intellectual property rights related to the reference
medicinal product. The studies and trials necessary in order to obtain such a
marketing authorization as well as any acts necessary for their performance do
not infringe these rights. The applicant to such authorization informs the
holder of theses rights at the moment of the filing of the application.
When the AFSSAPS grants a marketing authorization for
a generic medicinal product, it informs the holder of the marketing
authorization of the reference product of this grant.
The General Manager of the
AFSSAPS proceeds to the inclusion of the generic medicinal product in the
directory of generic medicinal products within 60 days from the notification of
the grant of the marketing authorization for the generic medicinal product to
the holder of the reference product. Nevertheless, the commercialization of
this generic medicinal product can only occur after the expiration of the
intellectual property rights, except in the case where the right holder
consents to such commercialization.
For the sole purpose of
publicity, the General Manager of the AFSSAPS keeps available to the public the
list of intellectual property titles protecting a reference medicinal product
if these titles have been communicated to the AFSSAPS by holder of this
reference product. The pharmaceutical company is solely responsible for the
correctness of the information provided. The payment conditions for the service
provided by the AFSSAPS are fixed by a decision from its Executive Board.”
Furthermore,
in accordance with Article 11 of the Bill Article L. 613-5 of the CPI would read (we pointed out new provisions
in bold):
“The rights afforded by the patent shall not extend to:
a) acts done privately and
for non-commercial purposes;
b) acts
done for experimental purposes relating to the subject matter of the patented
invention;
c) the
extemporaneous preparation for individual cases in a pharmacy of a medicine in
accordance with a medical prescription or acts concerning the medicine so
prepared.
d) The studies and trials necessary in
order to obtain a marketing authorization for a medicinal product in any Member
State of the European Community or any Member State of the European Economic
Area, as well as any acts necessary for their performance”.
According
to the DGS, the start of the Parliamentary
debate on the Bill is expected in January 2006. Consequently, France would probably
not meet the deadline for implementation of 30
October 2005 as set forth in the Directive.
However, French Courts have already considered that studies
or clinical trials can fall within the experimental use exception and should a
fortiori continue to do so until implementation.
What to expect
from the German “Grand Coalition”?
Prof. Dr. Dr. Alexander
P.F. Ehlers, Attorney at law and Physician and Oliver Sude, Lawyer, Ehlers,
Ehlers & Partner, Munich, Germany
On Friday 18 November 2005 the Conservatives and
the Social Democrats signed their pact for a “grand coalition”. This 150-page
agreement is aimed to outline the basic principles of a four-year government.
However, with regard to the necessary reform of Germany’s statutory health
insurance system no common ground was found. Hence, the Social Democrats and
the Conservatives agreed to disagree in this document, but pledged to overcome
their differences by the middle of next year.
Regardless whether there will be a profound change in the health insurance
system or not, there are several provisions in the coalition agreement that aim
to further cut down costs in order to keep the system working. For instance,
the new government plans to forbid rebates in kind to pharmacies granted by the
manufacturers of pharmaceuticals which until now were common but were not
transferred to the sickness funds. Furthermore, prices for generics shall be
reduced in the amount of five percent to reduce costs for pharmaceuticals. In
addition, basic principles of the last reform of 1 January 2004 will be further
developed: The already established reference price system shall be adjusted in
order to strengthen “real pharmaceutical innovations”. Such products shall not
be subject to the reference price system but the prices may be set by the
manufacturer. In contrast, so called “mock innovations” which are not considered
to improve already existing forms of treatment shall only be reimbursed
according to the reference prices defined for comparable products. Furthermore,
physicians accredited to the statutory health insurance shall become
responsible for the prescriptions of pharmaceuticals to an even higher degree
than at the time being. In consequence, physicians who are considered to
prescribe inefficient drugs may be subject to respective recourses payable to
the health insurance funds.
Furthermore, the “grand coalition”
will continue to encourage medical service providers and statutory health
insurance funds to close individual contracts preferably in the field of
integrated health care. This form of provision of health care services is
considered to avoid inefficient double examinations of the insured and to be
more flexible when it comes to the remuneration of the involved physicians
since the otherwise obligatory doctor’s fee scale must not be observed within
the integrated care projects.
Drafted by:
The amendment of the
Medicine Act (4 November 2005/853) has come into effect in Finland on 7 November
2005. The new EC provisions regarding medicines for humans and animals as well
as those regarding herbal pharmaceuticals (Directives 2004/27/EC, 2004/24/EC,
2004/28/EC, 2001/82/EC, 2001/83/EC and regulation Nr. 726/2004 of the European
Parliament and Council) have been implemented with this Amendment. In addition,
amendments due to national needs have been made to the Act.
Provisions regarding
the application for and granting of sales permits as well as provisions
regarding sales permit types have been reformed on the national level by the
amendment. The need for renewal of sales permit has also been reduced.
According to the Medicine Act, a sales permit remains valid for five years. Due
to the amendment a sales permit, when renewed, shall as a rule become valid
until further notice. A renewal must be applied for six months prior to the
expiry of the permit.
The amendment
intensifies the obligation of the holder of the sales permit to keep the product
actually available. The sales permit becomes void if the product is not brought
into sale within three years of granting the sales permit. The sales permit
also becomes void if the medicine is subsequently out of sale for at least
three years.
The amendment also
steps up the level of pharmacovigilance. The rights to information of medicine
supervision authorities have been improved. The obligation of the holder of the
sales permit to report the detrimental effects to the officials have been
widened. The amendment has also been specified by Lääkelaitos (National Agency
for Medicines, “NAM”). The NAM´s regulation (1/2005) and guideline (1/2005) in
relation with pharmacovigilance have entered into force simultaneously with the
amendments of Medicine Act. The guideline of the agency authorizes
pharmaceutical personnel to report detrimental effects coming to their
knowledge.
The amendment of
Medicine Act also applies to parallel products. To begin with, the definition
of a parallel product has been widened so that different salts, esters and
isomers can, more broadly than before, be considered as one and the same
effective agent, unless they differ considerably as regards their properties of
safety or effectiveness. In addition, the amendment specifies the provisions
regarding the so-called documentation protection. If a sales permit for a
parallel product is being applied for by referring to the sales permit
application of the original product, the application cannot be prosecuted until
eight years have lapsed since the granting of the sales permit for the
comparable product. In addition, the sales permit for the parallel product
comes into effect at the earliest ten years after the granting of the sales
permit for the comparable product. The term can on certain conditions be
prolonged to 11 for the medicines for humans and to 13 years for veterinary
remedies.
As a result of the
amendment, the herbal pharmaceuticals must also be registered in a registration
procedure identical to homeopathic products. The procedure is lighter than the
actual registration proceedings. The provisions of the Medicine Act regarding
the validity and renewing of the sales permit also apply to the registered
products.
The said amendments of the Medicine
Act are based on Government Bill 108/2005. However, some of the amendments
proposed in the Government Bill are still pending in Parliament.
Pending provisions concern, among other things, generic
substitution. According to the proposal, the buyer shall have the right to
revert to medicines originally prescribed by the doctor. In addition, it is
proposed, that the parallel product cannot be considered substitutable if the
manufacturing process of the effective agent of the original product is
protected in Finland by a methods patent or a certificate of additional
protection connected with it, and the corresponding patent application has been
made before the year 1995.
New pricing and
Reimbursement system in Greece
Yannis Chryssospathis, Lawyer, M.&P. Bernitsas Law
Offices,
A
reform of the Greek pricing and reimbursement systems will soon be officially
published by the Government, and it is expected to be applied early next year
The
situation appears as follows:
Pricing System
Following
a judgement of the High Administrative Court which ruled that the pricing
system implemented in Greece is unconstitutional, the Ministry of Development,
which is responsible for pricing of medicinal products, introduced a draft law
concerning a new pricing system.
According
to the new system prices of medicinal products will be calculated as the
average of the three lowest prices, two from the countries that were EU member
states before May 2004 and Switzerland, and one from the 10 accession countries
that joined the EU in May 2004.
In
addition to the above, the new legislation would fix generic prices at 80% of
the branded ones. It also states that after a product's patent has expired the
price of the branded product will be reduced by 20%.
The
reduction in question will take place under two prerequisites:
a)
one year after the marketing of one or more generics
containing the same active substance
with the branded product and
b)
as long as the National Drug Organisation certifies that the
generic has a satisfactory market share in the market.
However the criteria according which the
"satisfactory market" will be considered are not included within the
draft law. This gives the possibility of different interpretations which may
lead to complains of the interested companies against the authorities.
According to the calculations made by the companies the
new system will slightly increase the prices of their products and consequently
it is expected that parallel trade will continue to create problems to the
Greek patients.
Reimbursement system
The
Health Ministry issued a draft law concerning the rebate system.
According
to the draft law in question:
--- all medicinal products will be included into
therapeutic categories and will be reimbursed by the social security funds with
the exception of life style products and OTC’s
--- a
transparency committee should be set up and should have among its
responsibilities:
a)
the establishment of reference prices for the specific therapeutic categories
to which reimbursed products will be
included.
b) the definition of the dose that should be
reimbursed.
--- a rebate will be paid by the pharmaceutical
companies to the security funds based on the difference between the product’s
price and the reference price of its therapeutic category with which it will be
reimbursed by the social security fund.
EU Commission
initiatives
It has to be mentioned at this point that DG Enterprise
of the European Commission lodged against Greece a complain for infringements
to several articles of the Transparency Directive, in particular non respect of
time limits and lack of objective and verifiable criteria for price increases
and reimbursement decisions.
It is under the pressure put by the Commission and the
Judgement of the High Administrative Court that the Greek Government was
obliged to announce the above reforms.
It remains to be seen whether the Commission will be satisfied
with the new policies taken by the Government or will continue the infringement
procedure against Greece with a possible referral to the European Court of
Justice.
Ian Forrester, Q.C. and Nicole Scourti, Esq., White &
Case,
(To
view a footnote, please click on the numbered reference)
On August 25, 2005, the
Anglo-Swedish pharmaceutical company AstraZeneca brought an action before the
Court of First Instance for the annulment of the Commission Decision of July
15, 2005, 1 in
which the Commission had fined it for breach of the competition rules. 2 This appeal
constitutes the expected next step 3
in an antitrust case
unique of its kind.
The
case arose in 1999, when the European Commission received complaints from two
generics companies that AstraZeneca was misusing patent and regulatory systems
to obtain extra protection for its blockbuster product Losec. 4 After conducting investigations at
AstraZeneca's premises in the United Kingdom and Sweden, the Commission issued
a Statement of Objections in July 2003. AstraZeneca
responded, rejecting the Commission's allegations, in December 2003. An oral hearing was held in February 2004 at
AstraZeneca's request.
On
June 15, 2005, the Commission fined AstraZeneca €60,000,000 5 for infringements of Article 82 EC
and Article 54 of the Agreement on the European Economic Area. The Commission considered that between 1993
and 2000, AstraZeneca had engaged in two separate abusive practices, with the
intention of unfairly restricting competition from generic versions of Losec
and parallel imports of Losec:
The Commission found that, beginning in
1993, AstraZeneca deliberately gave misleading information to patent attorneys,
national courts and patent offices in order to obtain supplementary protection
certificates (SPCs) to which it knew it was not entitled for its patented
product omeprazole (the active ingredient in Losec).
SPCs provide up to five years'
marketing exclusivity after the expiry of the patent. The period that elapses between the filing of
an application for a patent for a new pharmaceutical product and the granting of
a marketing authorisation for that product usually lasts for several years,
commonly more than half of the twenty years of the patent’s life. This period, during which the patent is
running but the product cannot be marketed, makes the effective protection
under the patent insufficient to cover the investment made by the patent
holder. Regulation 1768/92 concerning the creation of an SPC for
medicinal products 6 (the SPC Regulation) was introduced to compensate for this.
Products
which were already on the market when the SPC Regulation entered into force
were only entitled to an SPC if the first authorisation to place them on the
market in the Community was obtained after certain cut-off dates. 7 The Commission considered that
AstraZeneca was able to receive SPCs for omeprazole by deliberately concealing the
correct date of the first authorisation to place omeprazole on the market. The Commission found that this alleged
misleading conduct amounted to an abuse in Belgium, Denmark, Germany, the
Netherlands, Norway and the United Kingdom.
AstraZeneca originally marketed Losec
in capsule form. Over the years, the
company developed a tablet formulation of Losec, the Multiple Unit Pellet
System (MUPS).
According to the Commission, in
1998/1999 AstraZeneca misused marketing authorisation rules and procedures by
withdrawing the Losec capsules in Denmark, Norway and Sweden, and replacing
them with MUPS tablets, and requesting the deregistration of the marketing
authorisation for the Losec capsules in these markets.
The Commission found that AstraZeneca
engaged in this strategy with the intention of blocking or delaying entry by
generic firms and parallel traders. At
the time, generics could only obtain a marketing authorisation under the
abridged procedure, and parallel imports could only be granted a parallel
import licence, if a reference product of the same formulation already existed
on the market. 8 Consequently, generic copies of Losec capsules and parallel imports of
Losec capsules could only be marketed in a Member State where a reference
marketing authorisation for Losec capsules existed.
AstraZeneca is challenging the
Commission's Decision on several grounds.
The Commission defined the relevant
market as that of proton pump inhibitors 9 used for the treatment of gastrointestinal diseases. AstraZeneca alleges that the Commission was
mistaken in excluding histamine receptor antagonists from the relevant market. 10 AstraZeneca also argues that this erroneous definition
influenced the Commission's finding on dominance, since the Commission did not consider
in its Decision whether AstraZeneca would still be in a dominant position if
histamine receptor antagonists were included in the relevant product market.
AstraZeneca argues that the
Commission erred in its finding of abuse, as misleading representations made in
the course of applications for intellectual property rights may not in law
amount to an abuse, unless and until the dishonestly obtained rights are
enforced, or are capable of being enforced.
AstraZeneca argues that Article 82
EC, properly interpreted, did not impose on it the obligation to maintain a
marketing authorisation for a product it no longer marketed, simply because it
would be easier for generic copies and parallel imports of the product to
compete with the product.
AstraZeneca challenges the
Commission's findings of fact on both infringements. First, it submits that the Commission failed
to present evidence that proved the alleged abuse of intellectual property
rights to the correct legal standard.
Further, AstraZeneca maintains that
it had no strategy for selectively switching from Losec capsules to Losec MUPS
tablets, or for selectively withdrawing the marketing authorisations for the
capsules.
The case broadens the
scope of Article 82 EC for the pharmaceutical industry.
The alleged
misrepresentation to patent authorities rests on the Commission's conclusion
that AstraZeneca's deliberately stated the wrong date of the first
market authorisation for Losec, with the intention of restricting competition
from generics and parallel imports. AstraZeneca,
on its part, has always maintained that it acted in good faith, and that at the
time when it filed its applications, the interpretation of "first
authorisation" in Article 19(1) of the SPC Regulation was uncertain.
Indeed, the provision was so unclear that the highest German court requested
the European Court of Justice for a ruling on its interpretation. Only the Court's decision, issued in 2003, 11 made it clear that
AstraZeneca's interpretation of "first marketing authorisation" was
indeed erroneous.
As to the alleged
misuse of marketing authorisation procedures, it is important to bear in mind
that the infringement of which AstraZeneca is accused is no longer
possible. The law has changed, 12 so that generics and
parallel imports no longer need to be of the same formulation as the reference
product. Nevertheless, marketing
authorisation practices which may block the entry of generics and parallel
imports of an original product could be considered an abuse.
The
issue on which the case rests is the definition of the relevant market and the
finding of dominance. As AstraZeneca has
argued, the effect of the Commission's narrow definition of the relevant
product market is that almost any pharmaceutical company introducing an
innovative product is at risk of being held to be dominant. Will this
discourage open competition and, ultimately, innovation and
competitiveness? Such outcome would be
incompatible with the Commission’s new industrial
strategy for the pharmaceutical sector, which seeks to regain the competitive
advantage that Europe once enjoyed in the sector by enhancing the environment
for innovation and investment.
The pharmaceutical
industry will undoubtedly welcome the Court's clarification of these
issues. Meanwhile, the Commission is
maintaining its hard-line position on the case, as was recently apparent in the
speech by Neelie Kroes, Commissioner for Competition, at the Fordham Corporate
Law Institute in New York on September 23, 2005. 13 After suggesting that
the Commission must find a way of exempting abusive behaviour under Article 82
EC because of efficiencies, the Commissioner went on to refer to the
AstraZeneca case as an example of a European case where there are no
efficiencies at all. 14
1.) Case COMP/A.37.507/F3 - AstraZeneca.
2.) Notice for the Official Journal - Action
brought on 25 August 2005 AstraZeneca / Commission (Case T-321/05) (not yet
published). The two applicants are
AstraZeneca AB of Sodertalje, Sweden (the company's R&D headquarters) and
AstraZeneca plc of London, United Kingdom (the company's corporate
headquarters).
3.) AstraZeneca announced that it intended to
appeal the Commission's Decision on the very day that the Decision was published (see press release of
June 15, 2005 on AstraZeneca's website at http://www.astrazeneca.com).
4.) Losec is a proton pump inhibitor used for the
treatment of acid-related diseases.
5.) The Commission fined AstraZeneca AB and
AstraZeneca plc €46,000,000 and fined AstraZeneca AB a further €14,000,000.
7.) Article 19(1) of the SPC Regulation states:
"Transitional provisions
Any product which, on the date on which this Regulation
enters into force, is protected by a valid basic patent and for which the first
authorization to place it on the market as a medicinal product in the
Community was obtained after 1 January 1985 may be granted a certificate.
In the case of certificates to be granted in
Denmark and in Germany, the date of 1 January 1985 shall be replaced by that of
1 January 1988.
In the case of certificates to be granted in
Belgium and in Italy, the date of 1 January 1985 shall be replaced by that of 1
January 1982." (emphasis added)
8.) This is no longer the case - see Section IV
below.
9.) Proton pump inhibitors block the production
of stomach acid by inhibiting the stomach's "proton pump". Losec was the first proton pump inhibitor.
10.) Histamine receptor antagonists also block the
production of stomach acid, but in a different way. Histamine, a chemical produced naturally by
the human body, stimulates certain stomach cells to produce stomach acid by
binding to a particular site on these cells, known as the H2 receptor. Histamine receptor antagonists work by
binding to H2 receptor without triggering acid production, thereby blocking the
receptors. Zantac, marketed by
GlaxoSmithKline, was a blockbuster histamine receptor antagonist.
AstraZeneca
has always argued that the Commission in its Decision adopted a product market
definition that was narrow and unsustainable, and that failed to take into
account the competitive constraints imposed on Losec by histamine receptor antagonists, which were
the first products used in the treatment of stomach acid disorders and were the
established therapy at the time of the introduction of Losec. (See the AstraZeneca brief on alleged
infringement of Article 82 EC on AstraZeneca’s website at www.astrazeneca.com.)
11.) Case C-127/00 Hässle v Ratiopharm
[2003] ECR p. I-14781.
12.) Directive 2001/83/EC on the Community code
relating to medicinal products for human use has been amended by Directive
2004/27 of 31 March 2004. See also the
judgments of the European Court of Justice in Case C-223/01 AstraZeneca A/S
v Lgemiddelstyrelsen [2003] and Case C-113/01 Paranova Oy ECR
[2003].
13.) The speech, entitled “Preliminary Thoughts on
Policy Review of Article 82” is available on the Europa website at
www.europa.eu.int.
14.) The Commissioner
stated: “Let us, however, not forget that there are numerous types of abusive
conduct where there are no efficiencies at all. One recent example in Europe is
the AstraZeneca case. The methods applied by AstraZeneca to misuse the patent system
in that case were certainly not motivated by efficiency considerations.”
Disclaimer:
This Newsletter is intended to
provide general information on the members of conférence bleue and on recent developments
of relevance to the pharmaceutical sector. The information and opinions which
it contains are not intended to provide legal advice, and should not be treated
as a substitute for specific advice concerning particular situations.
Editor
conférence bleue members
Austria:
Schönherr Rechtsanwälte, Tuchlauben 17, P.O. Box 41, A-1014 Vienna, www.schoenherr.at
Belgium: White & Case LL.P. incorporating Forrester & Sutton,
62, rue de la Loi, B-1040 Brussels, www.whitecase.com
Denmark:
Jonas Bruun, Bredgade 38, DK-1260 Copenhagen K, www.jonasbruun.dk
Finland: Castrén & Snellman, Attorneys at Law, Erottajankatu 5A,
FIN-00130 Helsinki, www.castren.fi
France: Bird & Bird, Centre d'Affaires Edouard VII, 6 Rue de
Caumartin, Paris 75009, www.twobirds.com
Germany:
Ehlers, Ehlers & Partner, Rechtsanwaltssocietät, Widenmayerstrasse 29,
D-80538 Munich, www.eep-law.de
Greece: M. & P. Bernitsas Law Offices, 5, Lykavittou Street,
GR-106 72 Athens, www.bernitsaslawoffices.gr
Hungary: S.B.G.&K. PATENT AND LAW OFFICES, Andrássy ÚT 113,
H-1062 Budapest, Mailing address: P.O. Box 360, H-1369, www.sbgk.hu
Ireland: Matheson Ormsby Prentice, 30 Herbert Street, Dublin 2, www.mop.ie
Italy: Avvocati Associati Franzosi Dal Negro Pensato Setti, Via
Brera 5, I-20121 Milan, www.franzosi.com
Netherlands: Brinkhof, De Lairessestraat 111-115, 1075 HH Amsterdam,
www.brinkhof.com
Norway: Advokatfirmaet Haavind Vislie DA, Raadhusgaten 27, P.O. Box
359, N-0101 Oslo, www.haavind.no
Solvenia:
Colja, Rojs & Partnerji Law Firm, Tivolska cesta 48, Sl-1000
Ljubljana
Spain: JAUSAS, Advocats, Pg. de Gràcia, 103,
E-08008 Barcelona, www.jnv.com
Sweden:
RydinCarlsten, Advokatbyra AB, Norrmalmstorg 14, P.O. Box 1766, SE-11187
Stockholm, www.rydincarlsten.se
Switzerland:
Bratschi Emch & Partner, Advokaturbureau, Bollwerk 15, P.O. Box 5576,
CH-3001 Bern and Bahnhofstrasse 106, 8023 Zürich, www.bep.ch
United Kingdom: Arnold & Porter, Tower 42, 25 Old Broad
Street, London EC2N 1 HQ, www.arnoldporter.com
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