1. The Role of Patents in the Pharmaceutical Industry
Regional Seminar on multilateral legal framework and practice of patent protection in the pharmaceutical field
Peter R. Thomsen, IP Policy and Litigation
Issyk Kul, May 27&28, 2014

2. The healthcare environment is undergoing unprecedented change
Aging population
The world’s population is aging. More healthcare treatments are needed, which is prompting payors to aggressively manage costs
Unhealthy lifestyles
Poor nutritional habits and sedentary lifestyles are increasing the prevalence of chronic diseases
Emerging markets
Economic growth in emerging countries is expanding access to healthcare
Aging population is increasing healthcare needs, which is prompting payors to aggressively manage costs:
An estimated 80% of people over age 80 suffer from at least one disease, and more than 60% have two or more conditions
Changing lifestyles fuel rise in chronic diseases:
Poor nutritional habits and sedentary lifestyles are increasing the prevalence of chronic disease in both the developing and industrialized worlds
Negative health consequences linked to obesity are becoming increasingly visible, especially cardiovascular disease and diabetes
Strong economic growth in emerging markets with large populations, particularly China, India and Russia, has led to rapid expansion of the middle class and greater demands for better healthcare services
New technological discoveries and trends are enabling the development of innovative medicines to address a range of diseases that previously could not be adequately treated:
Understanding of human biology and diseases has increased, changing the way we conduct research
The drug discovery process is being shortened by high throughput screening, combinatorial chemistry, robotics and transgenic technologies.
Advances in science and technology
New technological discoveries and trends are enabling the development of innovative medicines but also increasing the cost of innovation
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

3. Different types of Drug businesses
Environment
Patient needs
Innovative medicines
Prevention
Affordable options
Self medication
Full range
of healthcare
options
Originators
Generics
Over-The-Counter
Our portfolio meets the varied and often complex needs of patients and societies. Novartis is extending our lead in innovation, accelerating growth and driving productivity across our diversified portfolio to generate profits and to offer solutions to patients across a broad healthcare spectrum
Vaccines
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

4. Originator Business Innovative drugs with substance patent protection
Small chemical entities
Biologics, e.g. antibodies
Requiring a prescription
Products available in pharmacies and hospitals
All kinds of mostly potentially severe medical conditions
Oncology
Cardiovascular
Antibiotics and antivirals
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

5. Generic Business Drugs which have lost (compound) patent protection
Generic product also needs marketing approval from Health Authorities and needs to show to be safe and equally effective compared to originator reference product
Drugs requiring a prescription
since around 10 years including follow-on biologics or biosimilars
Products available in pharmacies and hospitals in the same way originator products are available
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

6. OTC (over - the - counter)
Drugs typically without patent protection or with patent protection only for certain aspects of the formulation
Drugs requiring no or no longer a prescription
Usually for less severe medical conditions
pain killer
cough and cold
allergy
Products available in drugstores and pharmacies
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

7. Vaccines
Products are antigens to stimulate the patient’s immune response
Antigen itself often not patent protected
But formulation, adjuvants, production processes, technology and combinations are patent protected
Prevention against severe infectious conditions, e.g.
Influenza, including pandemic
Against «children diseases»
New generation of vaccines against e.g. cervical cancer
No significant generic activity (so far)
Products available in pharmacies and hospitals
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

8. Discovery and Development of a new drug
Cumulative cost per Medicine: 800M – 1.3B USD*
*: J Dimasi & H G Grabowski, “The Cost of Biopharmaceutical R&D: is Biotech Different?” Managerial and Decision Economics No. 28 (2007): 469–79 ; J Dimasi, R W Hansen, and H G Grabowski, “The Price of Innovation: New Estimates of Drug Development Costs,”Journal of Health Economics 22 (2003): 151–185.
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

9. Market exclusivity provided by the basic „Active Ingredient“ patent
10 years Data exclusivity
t = 0: Filing date of the basic “Active Ingredient” patent
Prosecution for grant
PTE/SPC: Patent Term Extension
Marketing Approval (MA)
Patent: 20 Years
+ Up to 5 Years
Priority application (1 year)
Generic entry
Publication 18 months
Date of
Launch
Around 7 to 12 years
8 to 13 years Market exclusivity
- First MA granted around 7-12 years after the filing date of the Basic Compound patent
- PTE/SPC is aimed to compensate a patent holder for time during regulatory review when he/she could not exploit the invention being the subject of the patent
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

10. R&D intensity of pharmaceutical sector
Source: IFPMA
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

11. Regulatory Exclusivities
Innovation in the Pharmaceutical and Biotech field totally relies on sufficient protection by Intellectual Property Rights
Patents
Regulatory Exclusivities
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

12. Usual Patent Filing Procedure
PCT=Patent Cooperation Treaty: one application with an option to have patent in 148 countries
EAPO
maintain EAPO patent in up to 9 countries US
PCT
P+30m BR
Granted patents AR JP EP
Validate EP patent in up to 38 countries P TW
Granted patents
F=P+12M
+ other non-PCT country
EP= European Patent Convention: unified granting procedure for up to 38 countries
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

13. Typical scope of countries for a new compound patent application
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

14. Types of Patents found in pharmaceutical industry
Molecules
Pharmacologic compound or active metabolite
Protein, DNA, or antibody
Processes
Manufacturing process
Purification method
Diagnostic processes
Compositions/formulations
New compositions of two or more ingredients
New formulations (e.g., extended
release, gel, patch)
Other
Diagnostic tests
R&D-technology
Targets/biomarkers
Devices such as inhalers
Specific forms of molecules
New Uses/Indications
compounds for use to treat disease
methods of treatments
new patient sub-groups
dosage regimen
Enantiomers/Isomers
Polymorphs
Salts, Esters
Prodrugs C
* A patent grants the right to exclude; right to market comes from other authorities (e.g., EMA)
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

15. Case example Diovan (R)– compound patent provides 16 years of market exclusivity in USA
First Para IV challenge to compound patent Aug 07*
Patent
Regulatory
Compound patent Feb 91
NDA sub- mission
Dec 95
NDA approval
Dec 96
Expected Gx entry Sep 12
Discovery research
Development
Regis-tration
Market exclusivity
Market competition
US Patent Expiry
Product, compound
Product, hydrates
Product, salts
Composition (Valsartan/Amlodipine)
Composition (Valsartan/HCTZ)**
Jan 03
Jul 01
Jul 99
Jun 97
Patent extensions for delays***
PTO
Mar 12
FDA exclusivity
Pediatric indication
Sep 12
* First Para IV filer converted later to a Para III
** 3 separate patents
*** No FDA delay compensation due to maximum total effective patent life of 14 years
Source: IMS, Evaluate Pharma, FDA Orange Book, interviews
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

16. Case Example: Cyclosporin microemulsion
Cyclosporin used in drug for immune suppression after transplantation
Compound/indication patent for Cyclosporin expired 1995
1988 improved formulation invented with micro-emulsion
Formulation patents filed and granted
Claims of Micro-emulsion patent:
“1. A pharmaceutical composition comprising
a cyclosporin as active ingredient,
1) a hydrophilic phase,
2) a lipophilic phase, and
3) a surfactant,
which composition is an oil-in-water microemulsion pre-concentrate."
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

17. Case Example: Cyclosporin microemulsion (ctd)
Patentee claimed patent infringement by a generic product in development by IVAX called «Equoral(R)»
Composition of Equoral(R)
i) Cyclosporin (9%);
ii) Polyglycerol (3) oleate (30%);
iii) Polyglycerol (10) oleate (30%);
iv) Macrogolglycerate hydroxystearate (27%);
v) Ethanol (15%);
vi) Fatty acids (~1%);
vii) [capsules only] D,L-( tocopherol (vitamin E, an antioxidant)(<1%).
Lipophilic phase ?
Surfactant
Hydrophilic phase
GB High Court found no separate lipophilic phase component and only 14% of Cyclosporin in micelles similar to a microemulsion
Overall no oil-in water microemulsion and patent therefore not infringed!
Confirmed in Court of Appeal (Novartis v Ivax [2007] EWCA Civ 971)
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

18. Two Objectives of IP-Functions
Protecting own R&D investments by obtaining and enforcing IP-rights
Ensuring Freedom-To-Operate against IP-rights of others
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

19. IPR Enforcement and Freedom-to-Operate
Enforcement of Patents in Court litigation very common
To ensure a certain period of exclusivity
To recuperate high R&D costs
To push third parties to take licenses (rare for pharmaceuticals, more common for e.g. diagnostics)
Freedom-to-Operate
To make sure patents of others are not infringed
By legally designing-around the patents
By invalidate potentially relevant third party patents
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

20. Generic Erosion Curves after Generic Entry
Product B
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

21. Importance of First-to-Market for a Generic product
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

22. Ensuring Freedom-To-Operate (FTO)
Process
Patent 1
Formulation
Patent
Compound Patent
Process
Patent 2
Marketed product
If Development / TechOps would select “direct” approach (red): probably being held infringing 3 patents
Patent Function:
Identifying a way through and around protection of third party patents!
Cannot design around compound patent (covers every form, use, production of compound)
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

23. Successful Designing Around Third Party Patents
Process and intermediate patents: find an alternative manufacturing process that is not likely to be held infringing
Indication patents: consider carving-out of labeling and marketing authorization
Formulation patents: find an alternative formulation that meets regulatory requirements (Bioequivalency) but is not likely to be held infringing
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

24. Example for successful Designing Around : Cefuroxime Axetil
GSK held patent on special formulation of cefuroxime axetil having a film-coating:
Gx developed a Cefuroxime Axetil tablet being bioequivalent but having a non-film coating
Gx product was launched well before expiry of film-tablet GSK patent and
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

25. Example for successful Designing Around
GSK sued and asked for a preliminary injunction (PI)
Court refused PI and Gx could stay on the market
GSK withdrew claim on patent infringement of film-coating tablet
Successful design-around!
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

26. Comparison of Glaxo and Sandoz Tablet
Glaxo tablet-coating embodiment
film-forming agent
Sandoz tablet-coating embodiment
No film-forming component
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

27. Comparison of Glaxo and Sandoz Tablet (contd)
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

28. Main tools for dissolving patent conflicts
Patent infringement litigation started by patentee in view of actual or imminent launch of an allegedly infringing product
Request for Declaratory Judgement of Non- infringement started by alleged infringer
Revocation action started by potentially alleged infringer
Administrative route, e.g. opposition
Court route
Formal linkage between patent status and ability of Health Authorities to issue generic marketing authorization («patent linkage»)
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

29. Key elements of strong IP-regime
Complying with standards set by international agreements
TRIPS, PLT and PCT, Paris Convention, Madrid Agreement/Protocol
Limited Exclusions from Patentability, e.g. for biotechnological inventions
Efficient procedures to examine and grant patents and trademarks
Strong Court system allowing effective enforcement of IP-rights
availability of timely preliminary measures
Enforceability of court decisions
Ideally specialized IP-Courts
Possibility to have patent validity re-examined
Availability of Trademark protection
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

30. Key elements of strong national IP-regime (contd)
Willingness of local authorities to combat against counterfeiting
Customs
Regulatory Data Exclusivity
Sufficiently long period
to protect regulatory data from being disclosed and being referred to by unauthorized third parties
Possibility to obtain patent term extensions to compensate for regulatory delays
E.g. for up to 5 years
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

31. Conclusions Different drug businesses use patents in different ways
Establishing and maintaining strong national IPR-regimes is essential to ensure that companies can continue to undertake the costly and risky R&D process to develop next generations of innovative medicines and vaccines
Intellectual property rights can also stimulate technology transfer and building of technical skills within developing countries and fuel economic growth
Robust national procedures to obtain and enforce IP-rights such as patents, trademarks and regulatory data exclusivity
Also for generic sector efficient mechanisms to decide on patent disputes are important , e.g. on non-infringement or validity of granted patents in the interest of legal and business certainty
Many barriers exist that prevent access to healthcare and medicines, including lack of sustainable financing and inadequate infrastructure and supply systems. It is critical to address the entire health system in order to improve health outcomes
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals

32. Thank you for your attention… Questions?
| Practice of Patent Protection in Pharma | P.R. Thomsen | May 27, 2014 | Role of Patents for pharmaceuticals