Eversheds National Bioscience Group

In the highly competitive pharmaceuticals sector where development programmes last for years and have budgets ranging into six-figure sums, maintaining a monopoly position for a commercially important drug is key to commercial success. Only by securing a monopoly can a company justify the very significant investment of time and funding into the pre-clinical and clinical development necessary to support the stringent requirements for grant of a marketing authorisation. In the EU, the mechanisms for achieving this include:

• Patent protection

• Supplementary protection certificate

• Data exclusivity

• Orphan drug status

These issues cover two main areas; intellectual property and pharmaceuticals regulation. A successful policy is likely to incorporate aspects of both.

Patent Protection and Supplementary Protection Certificates

The term of a patent is up to twenty years from the date of filing the application¹. Given the period of time it can take to get a granted patent and dispose of any third party objections to that patent, the amount of time during which the patent is in force and unchallenged can be much shorter than twenty years. Furthermore, it may be some significant time after patent filing that a marketing authorisation is granted, covering sale of the patented product, further eroding the actual monopoly period for a product.

During the period of patent coverage, the proprietor of the patent has the right to prevent third parties from carrying out (or to license third parties to carry out) in respect of a product or process (or the product of a process) defined by the claims of the patent, any of the acts proscribed by the Patents Act; this includes acts such as making, disposing of, keeping or importing².

Once the term of the patent has expired, the patent cannot be used to prevent such activities. The need for the high degree of investment into the development of products by pharmaceutical companies to be rewarded by a protected market was recognised by legislation extending patent-type coverage for medicinal (and later, for plant protection) products in Europe. This legislation provided the framework for supplementary protection certificates³.

A supplementary protection certificate (an “SPC”) can take effect for a maximum of five years after expiry of the original patent term and is capable of extending the exclusivity for a particular medicinal product to a maximum of fifteen years, subject to the following:

• The applicant must be the holder of a European or national patent for a medicinal product.

• The medicinal product must be the subject of an authorisation to market in the EU.

• The SPC will relate to that medicinal product only.

• The maximum fifteen year term will run from grant of the first marketing authorisation for that medicinal product (which must be in force at the date of the application).

• The application for the SPC must be made within six months of the grant of the marketing authorisation, unless the marketing authorisation precedes grant of the patent, in which case the application for the SPC must be made within 6 months of the date of the grant of the patent.

• The SPC takes effect from the end of the term of the patent and remains in force for a period equal to the period which elapsed between the date on which the application for the patent was lodged and the date on which the marketing authorisation was granted, less five years, and not to exceed a five year term in total.

• The SPC will lapse if the marketing authorisation is withdrawn.

The holder of an SPC enjoys the same monopoly as the patent had conferred, except that the protection does not extend to all products, processes or products of processes falling within the claims of the original patent, but is limited to the product and the use of the product defined by the marketing authorisation.

The terms of protection set out above all depend upon the relevant renewal fees for patents and/or SPCs having been paid when due. Additionally, there is a requirement that the relevant patent is a so-called “basic patent”. A basic patent is one which covers and protects a medicinal product, a process to obtain such a product or an application for such a product. Accordingly, an SPC application was refused where the medicinal product which was the subject of the marketing authorisation was a single active ingredient, but the patent involved contained claims only to this single active ingredient in combination with other active ingredients⁴.

Data Exclusivity

The European framework for pharmaceutical regulation and authorisation attempts to protect the investment of companies in their innovations by providing periods of so-called data exclusivity. In essence, this is a period during which no third party applicant can rely upon data filed by the original applicant for a marketing authorisation. Accordingly, during this exclusivity period any subsequent applicant would need to have generated their own data to support the safety and efficacy of a product.

The relevant legislation⁵ states that the relevant period of data exclusivity is either six or ten years, depending upon:

• the type of marketing authorisation (centralised or otherwise);

• the country of sale.

Where the marketing authorisation is granted by the Medicines Control Agency in the UK or centrally through EMEA, the data exclusivity period will always be ten years. Where the centralised route is used, the period begins with the decision granting the marketing authorisation. Where national authorities grant the marketing authorisation, the period begins with grant of a first marketing authorisation “within the Community, in accordance with Community provisions in force” ⁶.

During the data exclusivity period, the so-called “abridged procedure” for third parties obtaining a marketing authorisation will not apply. When applicable, the abridged procedure permits an applicant for a marketing authorisation to omit the pre-clinical and clinical test results normally necessary to support an application in circumstances where the equivalent data has already been filed by a third party in relation to a product that has already been authorised for sale in circumstances where:

• the medicinal product is “essentially similar” to the product which is the subject of the earlier authorisation;

• the earlier authorisation was granted within the EU and has been in force for either six or ten years (see above), and

• at the time of the abridged application, the earlier approved product is being marketed in the Member State where the abridged approval is being sought.

The reference to the date of grant of a first marketing authorisation “within the Community, in accordance with Community provisions in force,” ⁷ is intended to exclude marketing authorisations granted by non-Member States, even if they are a Member State when the issue falls to be decided.

However, it might be possible to argue that authorisations granted by a national authority before that country entered the EU are relevant, if that country had taken steps to harmonise its regulatory procedures with EU procedures before becoming a Member State.

Essential Similarity

For the purposes of deciding whether or not an abridged application can be made, an assessment must be made as to whether or not the product that is the subject of that application is “essentially similar” to another product which is already the subject of an authorisation.

There is no definition of “essentially similar” in Directive 65/65 (as amended). The latest guidance is given in the 28 May 2001 updated version of the Commission’s Notice to Applicants for marketing authorisations⁸ . This notice builds on the leading ECJ authority of Generics (UK) Limited⁹, a referral from the English High Court. The notice re-states Generics’ decision that one product will be “essentially similar” to another if:

• it has the same qualitative and quantitative composition in terms of active principles/substances;

• the pharmaceutical forms are the same, and

• the products are bioequivalent,

unless scientific knowledge confirms that the safety or efficacy of the products are significantly different.

The notice goes on to urge that the terms “same qualitative and quantitative composition of active principles” and “same pharmaceutical form” must be understood broadly. The European Pharmacopoeia document “Standard Terms - Pharmaceutical Dosage Forms - Routes of Administration - Containers - January 2000” is given as the reference document for pharmaceutical forms. The notice states that all oral solid pharmaceutical forms for immediate release, such as tablets and capsules, are to be regarded as the “same pharmaceutical form”.

The only guidance given in the notice as to “same qualitative and quantitative composition of active principles” is that it will cover all products containing the same active substance and having the same properties with regard to safety and efficacy. Rather than to go on and further explain what is meant by “same properties with regard to safety and efficacy”, the notice describes a “new active substance” which of course would not satisfy the “essential similarity” criteria¹⁰. New active substances are said to include:

• chemical, biological or radiopharmaceutical substances not previously authorised as a medicinal product in the EU;

• an isomer, mixture of isomers, a complex or derivative or salt of a chemical substance previously authorised as a medicinal product in the EU but differing in properties with regard to safety and efficacy from that chemical substance previously authorised;

• a biological substance previously authorised as a medicinal product in the EU, but differing in molecular structure, nature of the source material or manufacturing process;

• a radiopharmaceutical substance which is a radionucleide or ligand not previously authorised as a medicinal product in the EU, or the coupling mechanism to link the molecule and the radionucleide has not been authorised previously in the EU.

The notice also states that active substances in the form of different salts, esters, derivatives and the like which have the same active therapeutic moiety will not normally be considered new active substances, unless they differ from one another in properties regarding safety or efficacy. The decision as to whether a different form of an active substance is to be classified as a new active substance is said to be in the hands of the competent authorities of individual Member States or EMEA on a case by case basis.

Non-active ingredients such as excipients can differ from product to product without altering “essential similarity” provided that they do not lead to a medicinal product which differs significantly from the reference product as regards efficacy and safety. Not surprisingly, it is acknowledged that it is extremely difficult to define “essential similarity” with respect to biotechnology products and a guideline is anticipated in this respect. The extent to which a product is bioequivalent to a reference product needs to be specifically addressed by the applicant and commented in the Expert Report section.

The Novartis Referral to the ECJ

The English Court of Appeal has referred the issue of “essential similarity” to the ECJ in a case involving Novartis’ challenge to the MCA’s decision to grant an authorisation for SangStat’s generic cyclosporin oral solution, SangCya, relying on data previously filed by Novartis. The Novartis data referred to by the MCA in granting the abridged licence for SangCya included data originally filed in relation to Novartis’ Sandimmum which was approved in 1983 and in relation to the newer product, Neoral, which was only approved in 1995. In filing the application for Neoral, Novartis was exempted from the requirement to submit full pharmacological and toxicological studies, relying on essential similarity with Sandimmum. They did, however, have to file new long-term Phase III safety studies.

Novartis challenges the grant of the licence for SangCya on two bases. Firstly, it argues that the MCA were not entitled to reference the Neoral data because it was still within its ten year data exclusivity period. Secondly, Novartis argues that neither Neoral nor SangCya is essentially similar to Sandimmum because they are not bioequivalent, nor do they have the same pharmaceutical form. On mixing with an aqueous solution, Neoral forms a microemulsion, SangCya a nanodispersion and Sandimmum forms a macroemulsion.

On bioequivalence, Novartis argues that Neoral and SangCya are both more bioavailable than Sandimmum. The MCA argues that bioequivalence is not always necessary to show essential similarity.

This ECJ reference is clearly capable of giving further guidance on the scope of “essential similarity” and on the practice to be adopted by licensing authorities when adopting the ten year rule.

Orphan Drugs

In order to encourage innovation of new products to treat rare diseases with a relatively small market, the EU has passed Orphan Drug legislation to ensure improved monopoly positions for the first drug licensed to treat such diseases¹¹. This legislation followed similar legislation already in force in the US and Japan.

The major advantage of orphan drug status is that it provides a ten year period of market exclusivity within the EU. This means that the regulatory authorities within the EU will not grant another marketing authorisation or accept an application to extend an existing marketing authorisation to cover the same therapeutic indication, in respect of a similar medicinal product¹².

This ten year period may be reduced to six years at the end of the fifth year if it is established that the requirements for orphan drug status are no longer satisfied. Equally, the exclusivity will be relaxed, though without prejudice to any intellectual property rights of the original applicant, in the event that:

• the holder of the marketing authorisation of the original orphan medicinal product has given consent to the second applicant, or

• the holder of the marketing authorisation of the original orphan medicinal product is unable to supply sufficient quantities of a medicinal product, or

• the second applicant can establish that the second medicinal product, although similar to the orphan medicinal product already authorised, is safer, more effective or otherwise clinically superior.

The definitions of “similar medicinal product” and “clinical superiority” are given in Commission Regulation (EC) no 847/2000.

Similar products can include:

• isomers, mixture of isomers, complexes, esters, salts and non-covalent derivatives of the original active substance, or an active substance that differs from the original active substance only with respect to minor changes in the molecular structure, such as a structural analogue, or

• macromolecules within specified margins of variability such as polysaccharide substances having identical saccharide repeating units, even if the number of units varies and even if there are post-polymerisation modifications (including conjugation), or

• the same radiopharmaceutical active substance, or one differing from the original radionucleide, ligand, site of labelling or molecule-radionucleide coupling mechanism linking the molecule and radionucleide provided that it acts via the same mechanism.

In order to demonstrate “clinical superiority”, evidence similar to that necessary to support a comparative efficacy claim for two different medicinal products will be needed. Ordinarily, direct comparative clinical trials would be necessary but other evidence can be used, provided the methodology can be justified. There is also a reference to exceptional cases where neither greater safety nor greater efficacy has been shown but it can be demonstrated that the medicinal product otherwise makes a major contribution to diagnosis or to patient care.

The EU Commission has had to decide on what should happen in the event that two products each with orphan drug designation for the same condition reach the point where a marketing authorisation could be granted to them at the same time. This has in fact occurred where two products were given orphan drug designation and positive CPMP opinions (entitling them to a marketing authorisation) on the same day. The EU Commission has indicated that it expects to grant the marketing authorisation for these two products on the same day and that each of these two products will have joint market exclusivity against a third product.

Other benefits of orphan drug status include EU incentives to support research and development of orphan medicinal products, particularly for small and medium-sized undertakings. This is not an obligation on Member States to provide such incentives but merely an obligation to communicate to the Commission information concerning any such incentives. Article 6 of Regulation 141/2000 also provides that an applicant for a marketing authorisation for an orphan drug may apply to EMEA for advice on the conduct of various tests and trials necessary to demonstrate the quality, safety and efficacy of the product. Additionally, article 7 provides that the EMEA authorisation route will be available to applicants for marketing authorisations for orphan drugs irrespective of having to satisfy the provisions of Part B to the Annex of Regulation (EEC) No 2309/93. There is also provision for waiver or part waiver of EMEA’s fees.

An application for orphan drug status must be made prior to the application for the marketing authorisation. It is assessed by the Committee of Orphan Medicinal Products (COMP). The applicant must show that:

• the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than 5 in 10,000 persons in the EU at the time the application is made, or that it is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the marketing of the medicinal product in the EU will generate sufficient return to justify the necessary investment, and

• there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorised in the EU or, if such method exists, that the medicinal product will be of significant benefit to those affected by that condition.

In attempting to substantiate the prevalence of a condition in the EU, databases from outside of the EU can be relied on if there is no available EU data, provided appropriate extrapolations are made. Further details on how to establish acceptability either on the grounds of prevalence or return on investment and proof that there is no other available method of diagnosis, prevention or treatment are set out in Commission Regulation (EC) No 847/2000. At a meeting in April this year to review how the assessment of orphan drugs designation status was progressing, EMEA indicated that prevalence needed to be considered on the basis of the entire EU population. Even if a disease affected only a specific gender or age group, the proportion should be given relative to the entire population of the EU so as to encourage innovation in these disease areas. EMEA are positively encouraging applicants for orphan drug designation to utilise pre-submission meetings with them. EMEA’s data on the progress of orphan drug designation applications during the first year of operation of the legislation shows that the average review time of applications can be reduced by four weeks if a pre-submission meeting is used. The intention is that a draft of the application for orphan drug designation should be available prior to such a pre-submission meeting.

Despite the obvious evidential difficulties in satisfying the grounds for orphan drug status, the EMEA meeting in April this year reported that 40 products have received a positive opinion from the COMP. This is out of a total of 88 applications and 34 of these remain in the review stage. Only three have received negative opinions from COMP, the remainder having been withdrawn by their sponsors during the application procedure. The major reasons for failure are failure to define the condition to be addressed or to show significant benefit over existing treatment.

Footnote on Dominant Positions

Having successfully combined the intellectual property and regulatory aspects described above, it is likely that the product concerned will have achieved market dominance. Whilst this is good commercial news, care must be taken not to fall foul of abusing that dominant position and the sanctions for such abuse set out in European competition law and in the UK Competition Act 1998.

This article first appeared in Ipeye, the intellectual property newsletter published by Eversheds Solicitors. For more information about, or to receive copies of IPeye, please contact Janet Knowles on 0161 831 8207 or 0113 243 0391 or at janetknowles@eversheds.com

1. PATENTS ACT 1977, s 27

2. PATENTS ACT 1977, s 60

3. COUNCIL REGULATION (EEC) NO 1768/92 OF 18 JUNE 1992 CONCERNING THE CREATION OF A SUPPLEMENTARY PROTECTION CERTIFICATE FOR MEDICINAL PRODUCTS AND PATENTS (SUPPLEMENTARY PROTECTION CERTIFICATE) RULES 1997 (SI 1997 NO 64)

4. CENTOCOR’S SPC APPLICATION ([1996] RPC 118)

5. COUNCIL DIRECTIVE 65/65/EEC AS AMENDED BY COUNCIL DIRECTIVE 87/21/EEC ARTICLE 4.8A(III)

6. COUNCIL DIRECTIVE 65/65/EEC AS AMENDED BY COUNCIL DIRECTIVE 87/21/EEC, ARTICLE 4.8A(III)

7. COUNCIL DIRECTIVE 65/65/EEC AS AMENDED BY COUNCIL DIRECTIVE 87/21/EEC, ARTICLE 4.8A(III)

8. EUROPEAN COMMISSION, THE RULES GOVERNING MEDICINAL PRODUCTS IN THE EUROPEAN UNION, NOTICE TO APPLICANTS - MEDICAL PRODUCTS FOR HUMAN USE, PROCEDURES FOR MARKETING AUTHORISATION, VOLUME 2A, CHAPTER 1, MAY 2001 AT PAGE 12.

9. CASE C-368/96 REPORTED AT [1999] 2 CMLR AT 181

10. SEE FOOTNOTE 8 ABOVE AT APPENDIX III.

11. REGULATION (EC) NO 141/2000 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 16 DECEMBER 1999 ON ORPHAN MEDICINAL PRODUCTS AND COMMISSION REGULATION (EC) NO 847/2000 OF 27 APRIL 2000 LAYING DOWN THE PROVISIONS THAT IMPLEMENTATION OF THE CRITERIA FOR DESIGNATION OF A MEDICINAL PRODUCT AS AN ORPHAN MEDICINAL PRODUCT AND DEFINITIONS OF THE CONCEPT “SIMILAR MEDICINAL PRODUCT” AND “CLINICAL SUPERIORITY”.

12. ARTICLE 8 OF EC REGULATION 141/2000.

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