Evergreening Patent Exclusivity in Pharmaceutical Products

Supplementary Protection Certificates, Orphan Drugs, Paediatric Extensions and ATMPs

Frantzeska Papadopoulou

• Publisher: Hart Publishing
• Year: 2021
• ISBN:
  9781509950294
• Edition: 1
• Topic: Law
• Subtopic: Intellectual Property Law
• Index: Law

This book analyses 4 central pieces of EU pharmaceutical regulation: the Orphan Drugs Regulation, the Paediatric Regulation, the Supplementary Protection Certificate Regulation, and the ATMP (Advanced Therapy Medicinal Products) Regulation. These four regulatory instruments constitute focal points in the pharmaceutical industry's approach to modern business and legal strategy. Their central role is justified by the way these regulatory instruments interact with each other and with the patent system, and by the considerable impact they (as a whole) have for the evergreening of exclusive rights on pharmaceutical products. The book guides the reader through the latest case law and legislative developments and discusses how these influence strategic legal and business choices in the pharmaceutical industry. It brings to the forefront the often-overlooked significance of the legislative architecture of the EU pharmaceutical regulatory framework, and evaluates its results through the lens of the efficiency test. The book is an important resource for academics and practitioners interested in updated case law and an in-depth analysis of these four regulations. It is also important for those interested in legislative studies, evaluation of legislation and a critical approach to legislative architecture.

1

Regulating the EU Pharmaceutical Sector

A Multilayered Challenge

1.The Pharmaceutical Sector: A Need for Regulation

Regulating pharmaceutical products became an urgent necessity in the aftermath of the thalidomide crisis. Thalidomide was a pharmaceutical, initially put on the market in West Germany in 1957 and prescribed as a sleeping aid for pregnant women suffering from morning sickness. It was praised at the time as an outstanding pharmaceutical breakthrough. That was, of course, before the births of tens of thousands of babies with congenital anomalies, as well as the numerous cases of pregnant women who became ill with peripheral neuritis (a severe degenerative disease), which were traced back to side effects of thalidomide leading to its removal from the market in 1961. This tragedy in the history of pharmaceutical research also triggered an urgent interest in the control and regulation of commercialisation of pharmaceutical products.¹

While the thalidomide tragedy was a wake-up call, that does not mean there was no public awareness of the potential dangers of pharmaceutical products prior to that. However, with exceptions only in the Nordic countries and the United States, the review and registration process of pharmaceuticals was limited to administrative control before the 1960s. The main objective of the first pharmaceutical regulation was to ensure that pharmaceutical products were not advertised in ways that would make patients believe they worked better than they actually did. In the beginning of the 1960s, all major jurisdictions reviewed their pharmaceutical regulation legislation. As thalidomide had been denied marketing authorisation in the United States prior to the crisis, the US system was considered a successful model to look at when considering different alternatives.²

The US regulatory system required pharmaceutical companies to submit detailed and reliable information in the packaging of pharmaceutical products, being particularly transparent with regard to potential adverse effects, in order for doctors and health professionals to make informed decisions when choosing between treatments and substances. It also included a federal regulatory office for pharmaceuticals, the Food and Drug Administration (FDA). As early as 1958, the US Congress granted the FDA a mandate to give pharmaceutical manufacturers licences, on the condition that they met certain safety and efficiency criteria. Several European countries followed the example set by the United States, slowly introducing new criteria in order for marketing authorisation to be granted, and also establishing independent bodies that would receive applications and review the efficacy and safety of pharmaceutical products. In the early 1970s, the system was further strengthened by requiring the submission of clinical trial evidence.

In Europe it soon became clear that there was a need to proceed to a form of supra-national regulation of the pharmaceutical industry, in addition to the initial national initiatives and reactions to the thalidomide crisis. Common health threats, as in the thalidomide case, had to be dealt with, and the most effective way to do so was to work proactively. Interestingly, several aspects of this first period of European pharmaceutical product regulation are important to this day. In 1963, the European Commission invited representatives of the public health sector, such as industry representatives, pharmacists and doctors, as well as consumer groups, to discuss potential directions that the European public health harmonisation should and could take.

Already in the first round of discussions, the parties participating in the negotiations had a major controversy, namely whether or not ‘therapeutic potency’ should be included as a requirement for marketing authorisation.³ Two years later, the six Member States of what was then the European Economic Community (EEC) agreed on the necessity and importance of common controls and standards. The EC thus proceeded to adopt a legislative act in 1965: Directive 65/65/EEC on common authorisation requirements for new drugs.⁴ This first piece of EU legislation introduced important terminology and definitions that are of central importance to this day.

An important definition was that of a medicinal product: ‘any substance or combinations of substances presented for treating or preventing disease in human beings or animals or any substance or combination of substances which may be administered to human beings or animals with a view to making a medical diagnosis or to restoring, correcting or modifying physiological functions in human beings or in animals’.⁵ The Directive included a definition for proprietary pharmaceuticals as ‘any ready prepared medicinal product placed on the market under a special name and in a special pack’.⁶ The Directive also included a set of requirements for medicinal products to be placed on the market.⁷ In order to receive market approval, a pharmaceutical manufacturer had to provide evidence of the product’s efficacy, safety and therapeutic benefit. Lastly, another very important contribution of the Directive was to clarify that medicinal products may not be placed on the market of a Member State without the prior agreement and authorisation of the national authority of that specific Member State.⁸ Guidelines related to time requirements and decision-making processes were also developed.⁹

During the early 1970s, when tariffs were gradually eliminated and the objective was to create an open internal market, yet another Directive was introduced, in order to facilitate the commercialisation of medicinal products. Directive 75/318/EEC introduced the process of mutual recognition and the procedures of the Committee for Proprietary Medicinal Products (CPMP).¹⁰ Prior to this, applications for manufacturing authorisations had to be submitted to each Member State separately. By means of this Directive, a product granted marketing authorisation in one Member State could receive authorisations in five further Member States without any separate administrative procedure being necessary. The fact that this mutual recognition procedure was possible also necessitated the harmonisation of quality and safety requirements. The role of the CPMP was extended to include arbitration in cases where one Member State refused to grant an automatic manufacturing authorisation (confirming the validity of a marketing authorisation granted in another jurisdiction to also cover the jurisdiction of another Member State). Although this role was worded in an ambitious way, the mandate of the CPMP was in fact of a purely advisory character, which also meant that its proposals could be (and were in fact rather often) ignored. Member States did raise objections based on safety and health concerns and the facilitation of trade of pharmaceutical products was not always without friction.

In the 83/570/EEC Directive, the minimum number of countries in which an applicant could receive an automatic authorisation was changed from five to two.¹¹ Manufacturers did not have to apply for authorisation in more than two countries, unless they wanted to. Although this system was more effective than the previous one, it led to a number of practical considerations and faced resistance from some Member States. By 1994, at least one objection per medicinal product was submitted by Member States. Although Community legislation was motivated by public health concerns, it has always been obvious that the creation of an internal market for pharmaceutical products was a central objective. It was also equally obvious that this objective was very difficult to achieve.

Already in the original 1985 White Paper on the Internal Market (CEC 1985), the goal was expressed clearly: national regimes should be brought together under a supra-national framework.¹² However, what this framework would look like and which steps had to be taken in this direction remained unclear. Thus, EU pharmaceutical competences developed gradually on an ad hoc basis. Member States’ public health systems have also developed independently and in parallel with one another, in a strange form of isolation that has been strengthened by increasing financial constraints and public health budget considerations.

At the same time, as the interest in regulating the intra-community medicines market increased, a new business model emerged on the pharmaceutical market, namely that of parallel trade. Taking advantage of the differences in the pricing policies between countries, pharmaceutical product traders bought medicines in low-income Member States and sold them on more expensive markets. This new business model was – for obvious reasons – supported by patient organisations while – for equally obvious reasons – it met the resistance of pharmaceutical companies, which found their international business (and pricing) model challenged. The pharmaceutical industry went so far as to test its legality before the European Court of Justice in the 1976 Peijper case.¹³ Unfortunately for them, the Court ruled that marketing authorisation rules could not be regarded as obstacles to intra-community movement until full market harmonisation of pharmaceuticals was achieved.

The Single European Market Programme adopted in 1986 provided that free movement of goods, services and capital would be possible by 1992.¹⁴ In the same year, Paolo Checchini, a retired Commission official, received the mandate to lead an investigation on the costs of a ‘non-European’ pharmaceuticals market. The conclusions of his report, published in 1988, were that although pharmaceutical markets would always be closely linked to public health, they were included under the SEM umbrella.¹⁵

The 87/22/EEC Directive introduced yet another marketing authorisation procedure (this time, a centralised one), that would only be applicable to biotechnological and other high-tech pharmaceutical products.¹⁶ In this new procedure, the manufacturers were to submit applications to the CPMP and one Member State (the primary intended market). When the CPMP and the national authority of that Member State finalised their respective evaluations, the communication between the applicant and other Member States would be facilitated.

In 1992, another interesting piece of Community legislation was enacted, namely Regulation (EEC) 1768/92, which created the Supplementary Protection Certificate (SPC), providing patentholders with a compensation for the patent term effectively lost due to the lengthy marketing authorisation procedure.¹⁷

Another area that was and remains controversial was that of the pricing and reimbursement of pharmaceuticals. The 89/105/EEC Directive (the Transparency Directive) introduced requirements concerning the transparency of Member States in relation to the pricing of pharmaceuticals.¹⁸ A proposal for a second or amended Transparency Directive was abandoned already in 1992. In a 1996 Communication on the development of an official EU ‘Industrial policy’, the Commission concluded that barriers remained to the pharmaceuticals market harmonisation and that the requirements set for the single market were not fulfilled. The most important obstacle in the process was identified to be the lack of a strong public health agency with the mandate to make binding decisions.¹⁹

However, it took several years to proceed to the establishment of an independent agency with the mandate to regulate the process of marketing authorisation of pharmaceutical products. The European Medicines Agency (EMA) was founded in January 1995²⁰ and was granted the responsibility of actually enforcing the regulatory framework, including all Directives and Regulations, going back to the first, 1965 Directive. By means of the Directive 93/39/EEC, the previous multi-state marketing authorisation procedure was replaced by a binding decentralised process.²¹ While the granting of marketing authorisations is only part of the mandate of the EMA, the agency is not comparable to its US counterpart, the FDA. Formally, at least, healthcare policy is outside the mandate of the EMA.

A general conclusion on the gradual regulation of the pharmaceutical market over the past 50 years is that most of the legislation has been enacted under the Single Market Programme. This is, of course, largely due to the Commission’s (and the European Union’s) lack of competence (or at least very restricted competence) in the public health area. Nevertheless, the EU has managed to introduce at least two pieces of legislation with a public health legal basis, namely the Transparency Directive²² and the EMA Regulation.²³ The fact that EU competences are far from clear in the pharmaceutical industry might also be one of the reasons why EU legislation is, in this respect, rather fragmented. Legislation is introduced when necessary or when the necessary stakeholder pressure is evident. Unfortunately, this has the side effect of a lack of a general overarching plan and a limited possibility to work with legislative architecture.

The regulation of the pharmaceutical market in the EU has mainly been the result of ‘product regulation’. Diverging...