Supplementary protection certificates Keeping pace with drug development

1
Supplementary protection certificates -Keeping
pace with drug development?

• Dr Duncan Curley
• Director, Innovate Legal
• www.innovatelegal.co.uk
• 23 January 2008

2
The pharmaceutical industry yesterday and today

• The research-based pharmaceutical industry is
  going through a painful transition.
• Throughout the 1970s and 1980s, the
  pharmaceutical industry relied on a steady flow
  of small molecule blockbuster drugs to bring in
  significant profits enough to achieve double
  digit growth.
• Patent expiries are now threatening sales both of
  small molecule products and the pioneering
  biotech products that were discovered in the
  1980s and early 1990s.

3
The pharmaceutical industry yesterday and today

• Despite significant extra investment on RD, many
  of the research-based companies are having
  difficulty in sustaining their output of new
  products.
• In 2007, the FDA approved only 19 new drugs, the
  fewest in 24 years.
• The overall growth rate for the industry was 7
  in 2006 (the same as 2005, which was in turn down
  slightly from 2004).
• Figures from the Tufts Center for the Study of
  Drug Development
• Figures from IMS Health

4
The pharmaceutical industry yesterday and today

• Projects based on new therapeutic targets often
  take longer to deliver a novel drug candidate
  into clinical development than projects that are
  extensions of existing targets.
• Many of the research-based companies have been
  putting effort into such lower risk activities,
  rather than focusing on traditional drug
  discovery.
• Much of the discovery work has been done recently
  in the biotech companies. The proportion of new
  medicines launched each year that are based on
  biological products continues to increase.

5
The pharmaceutical industry yesterday and today

• Many of the larger research-based companies have
  sought to boost their product pipelines by means
  of
• acquiring smaller biotechnology companies
• licensing-in drugs from biotech
• - joint ventures and partnering arrangements
• While 15 years ago, up to 90 of pharmaceutical
  RD was delivered internally, some companies are
  now buying in 40 of their product pipeline from
  external innovators
• See Integration and Evolution in the Life
  Sciences publication by the ESRC Genomics
  Network (2007).

6
The pharmaceutical industry yesterday and today

• The research-based pharmaceutical industry has
  come to expect vigorous competition from
  companies that manufacture drugs in generic form
  when they go off-patent.
• What this means is that one often sees an abrupt
  cut-off date at the end of the 20 year patent
  monopoly for a small molecule drug.

7
Background to the introduction of SPCs

• Following the thalidomide disaster in the 1960s,
  procedures were put in place to trial new drugs
  thoroughly for safety and efficacy prior to their
  use in the general population.
• The requirement to obtain regulatory approval
  prior to product launch means that the effective
  patent monopoly for small molecule pharmaceutical
  products is significantly reduced
• patent term erosion

8
Background to the introduction of SPCs

• In 1984, patent term extension legislation was
  introduced in the USA (Waxman-Hatch). The aim
  was to balance patent term extensions awarded to
  the research-based industry with concessions to
  the generic industry, in terms of speedier
  post-patent expiry authorisations for generics
  (Bolar exemption).
• Patent term restoration was introduced in Japan
  in 1988, with no statutory provision for the
  speedy authorisation of generics.

9
Background to the introduction of SPCs

• In Pharmaceutical patent term restoration for
  the 1990s Heinz Redwood examined the adequacy of
  patent protection in sustaining the acceptance of
  financial risk in pharmaceutical research and
  development in Europe.
• He found that
• effective patent life had converged on the narrow
  band of 10.1 to 11.9 years per patented product
• unexpired patent cover on patented products had
  collapsed in Europe between 1970 and 1988
• market rejuvenation - the influx of new products
  - was twice as fast in the US and Japan as in
  Europe.

10
The Commissions proposals

• The European Commission made its first proposals
  for a Supplementary Protection Certificate for
  medicinal products in 1990. The basic objectives
  of its proposals were set out in an Explanatory
  Memorandum
• The basic objectives of this proposal for a
  Regulation...concern the requirements relating to
  the proper functioning of the internal market,
  improvement of our competitiveness as compared
  with that of our trade partners and the
  encouragement of research and development in the
  health field
• Explanatory Memorandum, paragraph 8

11
The Commissions proposals

• The European Commissions proposals were not
  universally well-received
• The pharmaceutical industry has been spending
  the equivalent of 10 to 15 of its turnover on
  research and close to 30 on promotional efforts,
  and for all that, is one of the most profitable
  sectors. Obvious alternatives to SPCs less
  spending on promotional activities, for example
  are...ignored
• The Committee on Economic and Monetary Affairs
  and Industrial Policy, commenting on the
  Commissions draft proposals for SPCs

12
The Commissions proposals

• The fear was voiced in some quarters of a cost
  explosion - higher prices for new drugs.
• - See the discussion in Redwood (1990) and the
  CLIP (Common Law Institute of Intellectual
  Property) Report on SPCs of 1991
• Others said that the additional cost to national
  health systems would be marginal and the
  long-term benefit of SPCs would be likely to
  outweigh any cost savings from prescribing more
  generic medicines, if SPCs were not introduced.

13
The compromise

• ....and so in Council Regulation (EEC) No.
  1768/92
• the protection to be given by SPCs is limited to
  new medicinal products
• for a product covered by several patents, the
  applicant for a SPC has to choose only one patent
  the basic patent which is designated in the
  application for a SPC
• the maximum duration of a SPC is limited to 5
  years

14
The compromise

• ? A SPC extends the rights conferred by a single
  (basic) patent for up to 5 years after patent
  expiry, for certain pharmaceutical products.

15
The value of SPCs

• Despite their limitations, SPCs have proved
  vitally important to the research-based industry,
  because they provide up to 5 years extra
  marketing exclusivity after patent expiry, often
  at a time when a product is approaching peak
  sales
• EG Prozac (fluoxetine) in the UK
• Prozac was introduced in the UK in 1986
• Patent protection in the UK expired in 1995
• The UK SPC expired on 8 January 2000
• Approximately 80 of Prozacs sales were made in
  the 5 years in which the product was protected by
  the SPC

16
The value of SPCs
Graph courtesy of IMS Health Accessible at
http//www.ims-global.com/insight/news_story/ne
ws_story_000417a.htm
17
SPC versus data exclusivity

• The principle behind the legislation is that the
  holder of both a patent and a SPC should be able
  to enjoy a maximum of 15 years of exclusivity
  from the date of first market authorisation of a
  drug product in the EEA.
• But sometimes drug products (eg in the CNS area,
  which often require lengthy clinical trials) do
  not receive marketing authorisation until close
  to the end of the patent term.
• Note that in these circumstances, the five year
  limit on the maximum SPC term can mean that data
  exclusivity offers longer effective protection
  than a SPC.

18
Brief overview of Council Regulation (EEC) No.
1768/92

• Main operative provisions Articles 1-5
• Article 1 Definitions
• Article 2 Scope
• Article 3 Conditions for obtaining a SPC
• Article 4 Subject-matter of protection
• Article 5 Effects of a SPC
• Other provisions deal with deadlines, content of
  applications for SPCs, grant, publication and
  transitional arrangements

19
Brief overview of Council Regulation (EEC) No.
1768/92

• What is required in order to get a SPC?
• a product meaning an active ingredient or a
  combination of active ingredients of a medicinal
  product that is protected by a basic patent
• - Article 3(a)
• a valid marketing authorisation to place the
  product on the market as a medicinal product
• - Article 3(b)
• the product must not already be the subject of a
  SPC
• - Article 3(c)
• The marketing authorisation must be the first
  authorisation to place the product on the market
• - Article 3(d)

20
A closer look at the Regulation

• What is required in order to get a SPC?
• a product meaning an active ingredient or a
  combination of active ingredients of a medicinal
  product that is protected by a basic patent -
  Article 3(a)
• a valid marketing authorisation to place the
  product on the market as a medicinal product
• - Article 3(b)
• the product must not already be the subject of a
  SPC
• - Article 3(c)
• The marketing authorisation must be the first
  authorisation to place the product on the market
• - Article 3(d)

21
Active ingredient must be protected by a basic
patent

• Example Lipitor in the UK -
• The active ingredient is atorvastatin calcium (in
  pure, enantiomeric form).
• European Patent No. 0247633 claimed a compound
  as shown, without specifying stereochemistry.
• In Ranbaxy UK Limited v Warner-Lambert Company,
  Ranbaxy sought a declaration of non-infringement
  in relation to the active enantiomer of
  atorvastatin, asserting that the claims covered
  only the racemic mixture.

22
Active ingredient must be protected by a basic
patent

• Following the first instance judgment of the
  Patents Court, Ranbaxy amended its case to plead
  that SPC/GB97/011 was granted contrary to Article
  3(a) of Council Regulation (EEC) No. 1768/92...
• ...because the active ingredient in Lipitor -
  enantiomerically pure atorvastatin calcium - was
  not protected by European Patent No. 0247633 (the
  basic patent)
• This claim failed, together with the appeal from
  the refusal to give the declaration sought - see
  Court of Appeal judgment, paragraph 31.

23
Active ingredient must be protected by a basic
patent

• Note that where one patent covers several
  products that each get regulatory approval, each
  product can be the subject of a separate SPC.
• Example PDL BioPharma Incs European Patent
  0,451,216 to humanised antibodies (recently
  upheld by the EPO)
• 2 SPCs granted in the UK designating this as the
  basic patent
• - SPC/GB99/029 daclizumab (Zenapax)
• - SPC/GB00/032 trastuzumab (Herceptin)

24
Active ingredient must be protected by a basic
patent

• Note also the importance of the choice of the
  basic patent. If the basic patent can be
  invalidated, the SPC will fall too.
• NB - Article 15(c) of the SPC Regulation
• The SPC shall be invalid if the basic patent is
  revoked or limited to the extent that the product
  for which the certificate was granted would no
  longer be protected by the claims of the basic
  patent

25
Active ingredient must be protected by a basic
patent

• Example Seretide in the UK
• The combination of salmeterol and fluticasone was
  the subject of UK patent no GB2235627 to Glaxo
  Group Limited. A UK SPC for a combination of
  salmeterol and fluticasone propionate was granted
  on 2 September 1999 that would have expired in
  2013, but the basic patent was revoked on 5 April
  2004 in patent invalidity proceedings brought by
  CIPLA and others...
• ...and the SPC fell with the basic patent

26
Active ingredient must be protected by a basic
patent

• Knocking out a SPC by invalidating the basic
  patent
• Upcoming case Dr Reddys Laboratories v Eli
  Lilly and Company Ltd.
• Listed for trial in July 2008. Claim is for
  (inter alia) a declaration that SPC/GB96/058
  (Olanzapine optionally in the form of an acid
  addition salt) is invalid, by reason of the
  invalidity of the basic patent (European Patent
  (UK) No. 0454436).

27
Combination products

• For a combination product, the basic patent must
  disclose the combination of active ingredients
  it is not sufficient if only one of the actives
  in a combination is disclosed.
• Re Takeda Chemical Industries SPC Applications
• 2004 RPC 2
• Takedas applications for SPCs protecting various
  combinations of lansoprazole and an antibiotic
  were refused because the patents only protected
  lansoprazole, not the combination of lansoprazole
  antibiotic.

28
Combination products

• Gliadel
• MIT applied for a SPC for Gliadel in Germany
  designating European Patent (DE) No. 0260415 B1
  (Synthesis and application of high molecular
  weight polyanhydrides) as the basic patent.
• Gliadel consists of carmustine - an old
  anti-cancer agent - in a biodegradable matrix
  called polifeprosan. It is used in the treatment
  of recurrent brain tumours.

29
Combination products

• Gliadel
• The European Court of Justice was asked to
  interpret the meaning of a combination of active
  ingredients of a medicinal product and
  specifically whether this could include a
  combination of two substances, only one of which
  has a therapeutic effect of its own for a
  specific indication, the other being necessary
  for the therapeutic efficacy of the first.
• Note a SPC had already been granted in the UK
  SPC/GB01/013.

30
Combination products

• Gliadel The Advocate General
• Combination of active ingredients should not be
  interpreted literally, because this was
  inconsistent with both the thrust of Regulation
  1768/92 and a broader objective being pursued
  within the EU, being the combating of cancer.
• Gliadel was the kind of therapeutic innovation
  whose development was intended to be encouraged
  by Regulation 1768/92.

31
Combination products

• Gliadel The Advocate General
• I consider that research into new applications
  for existing active ingredients should be
  promoted by developing auxiliary substances and
  enabling their use or the enhancement of their
  pharmacological properties for a specific
  indication.
• If no such research were conducted...many
  patients would have to make do with treatment
  that was not optimal.
• Paragraph 48 of Advocate General Légers opinion

32
Combination products

• Gliadel The Advocate General
• Polifeprosan made it possible ...not only to
  increase significantly the intended therapeutic
  effect of the active ingredient as a result of a
  new and inventive mode of administration, but
  also, through its progressive dissolution, to
  avoid harmful side-effects associated with the
  intravenous administration of simply the active
  ingredient.
• Paragraph 58 of Advocate General Légers opinion

33
Combination products

• Gliadel The Advocate General
• ...the combination at issue represents a major
  innovation, resulting from long, costly research,
  which the regulation seeks precisely to protect.
• Paragraph 58 of Advocate General Légers opinion

34
Combination products

• Gliadel - Case C-431/04, European Court of
  Justice
• The Court of Justice held that a combination in
  the SPC Regulation means a combination of active
  ingredients.
• Although necessary for the therapeutic
  effectiveness of Gliadel, polifeprosan was
  inactive, therefore Gliadel was ineligible for
  protection by means of a SPC.

35
Combination products

• Fallout from the Gliadel decision - Serevent
• Glaxo applied for a SPC for salmeterol xinafoate
  CFC-free formulation (Serevent) SPC/GB06/017.
  The product for which protection was sought was
  as follows
• A combination of salmeterol or a physiologically
  acceptable salt or solvate thereof, such as
  xinafoate, and 1,1,1,2-tetrafluoroethane.

36
Combination products

• Fallout from the Gliadel decision - Serevent
• The UK IPOs response
• ...the only active ingredient present in the
  authorised medicinal product Serevent ...is the
  salmeterol component...
• 1,1,1,2-tetrafluoroethane is...simply...an
  excipient....
• The medicinal product Serevent may well require
  a new authorisation but it remains merely a
  reformulation of a known active, salmeterol....

37
Combination products

• Serevent The UK IPOs response (ctd.)
• ...The ECJ found in MIT that a combination of
  two substances wherein only one substance has a
  therapeutic effect and the other substance
  enables a pharmaceutical form of the medicinal
  product which is necessary for the therapeutic
  effect of the first substance is not included
  within the definition in Article 1(b) of
  Regulation 1768/92....
• The definition which you have provided as the
  subject-matter to be protected by the
  certificate...is not a combination of active
  ingredients within the meaning of Article 1(b).
  

38
Second medical use

• Yissum - Case C-205/05, European Court of Justice
• Yissum Research and Development Company sought a
  SPC for a combination of calcitriol with an
  ointment base, based on European Patent (UK) No
  0129003 B2. However, there were other medicinal
  products that had calcitriol as the sole active
  ingredient before the authorisation of Yissums
  ointment product.

39
Second medical use

• Yissum - Case C-205/05, European Court of Justice
• Yissum argued that product in Regulation
  1768/92 should be interpreted as meaning the
  active ingredient or combination of active
  ingredients that are the subject of the
  innovation of the basic patent.
• In a Swiss-form of patent claim (new medical uses
  for old compounds), the innovation in the basic
  patent must incorporate the use, eg the product
  in the Yissum case was calcitriol for the topical
  treatment of psoriasis

40
Second medical use

• Yissum - Case C-205/05, European Court of Justice
• The question referred to the European Court of
  Justice was as follows
• In a case in which the basic patent protects a
  second medical application of a therapeutic
  agent, what is meant by product in Regulation
  1768/92 and in particular does the application
  of the therapeutic agent play any part in the
  definition of product?

41
Second medical use

• Yissum European Court of Justice
• The answer
• In a case where a basic patent protects a second
  medical use of an active ingredient, that use
  does not form an integral part of the definition
  of product in Regulation 1768/92.

42
A valid marketing authorisation

• What is required in order to get a SPC?
• a product meaning an active ingredient or a
  combination of active ingredients of a medicinal
  product that is protected by a basic patent
• - Article 3(a)
• a valid marketing authorisation to place the
  product on the market as a medicinal product -
  Article 3(b)
• the product must not already be the subject of a
  SPC
• - Article 3(c)
• The marketing authorisation must be the first
  authorisation to place the product on the market
• - Article 3(d)

43
A valid marketing authorisation

• For pharmaceutical products, this means an
  authorisation to be placed on the market in
  accordance with Directive 2001/83/EC.
• Note British Technologys SPC Application
• 1997 RPC 118
• A letter granting permission to carry out a
  clinical trial is not sufficient.

44
One SPC per product ?

• What is required in order to get a SPC?
• a product meaning an active ingredient or a
  combination of active ingredients of a medicinal
  product that is protected by a basic patent
• - Article 3(a)
• a valid marketing authorisation to place the
  product on the market as a medicinal product
• - Article 3(b)
• the product must not already be the subject of a
  SPC - Article 3(c)
• The marketing authorisation must be the first
  authorisation to place the product on the market
• - Article 3(d)

45
One SPC per product?

• Biogen v SmithKline Beecham Case C-181/95
• The question
• Is it possible for SPCs to be granted to more
  than one holder of a basic patent, where an
  authorised product is covered by several patents
  belonging to different entities?

46
One SPC per product?

• Biogen v SmithKline Beecham Case C-181/95
• Advocate General Fennelly
• Regulation 1768/92 applies simply to a simple
  situation, in which basic research, product
  development, production and marketing are
  vertically integrated where the holder of the
  patent relating to a medicinal product is also
  the holder of the relevant marketing
  authorisation. Regulation 1768/92 was evidently
  drafted on the basis of this classic model.

47
One SPC per product?

• Biogen v SmithKline Beecham Case C-181/95
• European Court of Justice
• 1997 RPC 23
• Where a medicinal product is covered by several
  basic patents, Regulation 1768/92 does not
  preclude the grant of a SPC to each holder of a
  basic patent.

48
Evergreening

• What is required in order to get a SPC?
• a product meaning an active ingredient or a
  combination of active ingredients of a medicinal
  product that is protected by a basic patent
• - Article 3(a)
• a valid marketing authorisation to place the
  product on the market as a medicinal product
• - Article 3(b)
• the product must not already be the subject of a
  SPC
• - Article 3(c)
• The marketing authorisation must be the first
  authorisation to place the product on the market
  - Article 3(d)

49
Evergreening

• The Pulmicort Turbuhaler case (Draco ABs SPC
  application 1996 RPC 417).
• Budesonide was the sole active ingredient in two
  medicinal products that were the subject of
  marketing authorisations in the UK in 1981 and
  1982. Although budesonide was still protected by
  a basic patent in 1993, it was an old active
  ingredient and it could not be brought within
  Regulation 1768/92.

50
Evergreening

• The Pulmicort Turbuhaler case (Draco ABs SPC
  application)
• The applicant tried to argue that the product
  was a new formulation
• additive free budesonide in the form of
  aggolmerated micronised particles
• and that a SPC should be granted on the basis of
  a later marketing approval in 1990 for the
  Pulmicort Turbuhaler device.

51
Evergreening

• The Pulmicort Turbuhaler case (Draco ABs SPC
  application).
• The application was turned down by the Patent
  Office. On appeal, it was argued that extensive
  research had been required to adapt the
  formulation of budesonide for the Turbuhaler.
• This argument was rejected SPCs were not
• for the general protection of the fruits of
  research
• per Jacob, J.

52
Paediatric extensions

• Regulation (EC) Nos. 1901/2006 and 1902/2006 on
  medicinal products for paediatric use (in force
  from 26 January 2007).
• Paediatric Investigation Plans must be agreed
  between sponsors of clinical trials and the
  Paediatric Committee.
• The reward a 6 month extension to the SPC term
  on submission of the results of paediatric
  studies, whether or not the drug is shown to be
  efficacious in children.

53
Paediatric extensions

• Getting a paediatric extension is not a trivial
  matter
• all of the measures contained in the Paediatric
  Investigation Plan must have been complied with
• the product must be authorised in all EU Member
  States
• relevant information on the results of the
  paediatric studies must be included in the SmPC.

54
Paediatric extensions

• For blockbuster products, the 6 month extension
  to a SPC will be an extremely valuable reward,
  far exceeding the cost of undertaking the
  paediatric studies.
• Overall, the new paediatric extensions will
  translate to a cost to the NHS drugs bill of
  between 30 million and 120 million a year in
  England alone
• - UK Government Partial Regulatory Impact
  Assessment

55
Keeping pace with drug development?

• To summarise
• SPCs do not provide additional protection for
  reformulations, medical devices or new delivery
  systems.
• SPCs are not available to extend second medical
  use patents, where the product in question has
  already been the subject of a marketing
  authorisation for a different indication.
• But a 6 month paediatric extension to a SPC is
  available on completion of paediatric studies,
  even if a paediatric indication for the drug is
  not authorised.

56
Postscript

• Whilst uncertainty reigns the patentees will
  have practical monopolies unless competitors are
  prepared to take the risk of SPCs being granted.
  It would not be surprising if millions of pounds
  turn on the point, quite a lot of it being public
  money on the National Health Service drugs bill
• Comments of Jacob, J. in the Pulmicort Turbuhaler
  case

57
Postscript

• AstraZeneca (under appeal)
• Facts
• Losec (omeprazole) was an old product by the
  time that Regulation 1768/92 came into force
• By using a date for the marketing authorisation
  of Losec in Luxembourg, AstraZeneca managed to
  obtain SPCs for Losec in certain European
  countries under the transitional provisions in
  Article 19 of Regulation 1768/92
• On 15 June 2005, the European Commission issued a
  decision in which it fined AstraZeneca 60
  million for breach of EC competition law (Article
  82).

58
Postscript

• ...and on 16 January 2008, the European
  Commission announced a wide-ranging investigation
  into certain practices of the pharmaceutical
  industry
• The European Commission has launched a sector
  inquiry into competition in the pharmaceuticals
  sector (under Article 17 of Regulation 1/2003),
  and is conducting inspections at the premises of
  a number of innovative and generic pharmaceutical
  companies. The inquiry is a response to
  indications that competition in pharmaceutical
  markets in Europe may not be working well fewer
  new pharmaceuticals are being brought to market,
  and the entry of generic pharmaceuticals
  sometimes seems to be delayed. The inquiry will
  therefore look at the reasons for this.
• - Commission Press Release

59
Supplementary protection certificates -Keeping
pace with drug development?

• Questions?