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LEGAL ALLIANCE, founded in 1995, is today one of the leading Ukrainian law firms specializing in legal support to pharmaceutical companies doing business in Ukraine and CIS countries.

OUR CLIENTS represent the following industries: pharmaceuticals, medical devices, consumer goods, medicine, cosmetics, para-pharmaceuticals, chemistry, biotechnology, agriculture and food products.

LEADING ASSOCIATIONS — AIPM Ukraine, APRaD as well as the EBA Healthcare Committee have chosen Legal Alliance as their legal advisor.

Changing approaches to medicines patenting: market participants discussed key innovations

Apteka.ua, No. 44 (1215) dated November 18th, 2019.

On November 4th, Legal Alliance Company with the support of the Association of Innovative Drug Manufacturers “APRaD” held the discussion club “Discussion Pharma MeetUP on Intellectual Property: Manufacturers of Innovative Drugs vs Generics Manufacturers on Bills No. 2089 and No. 2259.” Alexander Kozyrev, associate at Bayer Ukraine, Dmytro Pavlov, head of the Department Rights to the Results of Scientific and Technical Activities of SE Ukrainian Institute of Intellectual Property (Ukrpatent), Dmytro Taranchuk, legal director at Farmak JSC, participated in the discussion. The event was moderated by Vitalii Savchuk, counsel at Legal Alliance Company. The participants discussed changes in the field of intellectual property which are aimed at: 1) combatting so-called evergreen patents; 2) introduction of the Bolar provision, which makes it possible to register a generic drug before the patent for the original drug expires and bring it to the market the very next day after the expiration of the patent; 3) parallel import of drugs.

Combatting Evergreen Patents

Dmytro Taranchuk emphasized that the reform of the sphere of intellectual property is long overdue. Therefore, Farmak supports any approach related to the reform of patent protection in the field of utility models for medicines. Whether it is an approach that provides that only devices can be utility models (draft No. 2259), or an approach according to which patent protection can apply to a new application of a known product or process, as well as the process itself (method) (draft No. 2089). The main thing is that these changes should be aimed at combating all kinds of abuses by the patent holder, when patent protection for certain forms in the European Union has long expired, but in Ukraine it continues to operate. Thus, both the development of pharmaceutical science and the availability of drugs for the population of Ukraine are constrained.

However, at the same time, Mr. Taranchuk noted that, compared with the proposed option for definint a utility model according to draft No. 2259, the option described in draft No. 2089 will still be more compromise, since it provides for certain restrictions to be introduced, but not to eliminate the utility model at all. Since, if only a device is a utility model, then most likely such an object of patent protection as a utility model in Ukraine will practically cease to exist.

Alexander Kozyrev drew attention to the fact that most often the term “evergreen patents” means secondary patents that are received by innovative companies after the expiration of the validity of primary patents.

In the pharmaceutical industry, the primary patent is a patent for a drug formula. Then, during the validity of the primary patent, the innovating company improves the drug by conducting additional clinical trials, etc. Subsequently, it obtains a new invention that meets all the requirements for patentability, and has the right to apply for a secondary patent, which is why the statement that there are certain abuses regarding the unjustified extension of the validity of a patent is incorrect. Any patent for an invention can be valid in Ukraine for 25 years, of which 20 years is the main term of patent protection and it can be extended for another 5 years. The remaining patent protection terms are new patents (secondary) that protect another object of intellectual property. Most often, these are combinations or compositions of drugs, that is, a modified and improved primary invention (drug).

Therefore, the changes proposed by draft No. 2089, according to which "the dosage or any new property or new use of the medicine which is at the current inventive step is not recognized new» are not entirely pro-European norms, which is why innovative companies oppose them.

In turn, draft No. 2089 was introduced to the public as a mechanism to improve patients' access to medicines. However, Mr. Kozyrev believes that the document proposes to level out the ability of innovative companies to refine / improve medicines, and if this norm had been adopted in Ukraine 20 years ago, now patients would not have several high-quality and useful products that they use. After all, the company-innovator, which developed the initial patent, has all the best practices in order to improve this product, and due to this, many new high-quality drugs appear on the market.

In turn, draft No. 2259 contains a different wording of the restriction regarding the legal protection of inventions, utility models, according to which legal protection is not provided to “new forms of a drug of the known inventive step, including compositions, combinations and other derivatives, if they do not differ significantly in terms of safety and / or effectiveness. ” However, what mechanisms does Ukrpatent have during the examination of the application to determine how much the new form of the drug meets the criteria of efficacy and safety compared to the previous one?

According to the speaker, the issue of availability of drugs should be regulated by amending the regulatory legal acts governing the reimbursement system and / or the Law of Ukraine “On Prices and Pricing”, and not by introducing legal restrictions on the possibility of registering new inventions. Moreover, such a norm is contrary to Article 27 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which refers to the fact that any intellectual property from any industry has the right to patent protection.

Dmytro Pavlov spoke about the mechanisms used by Ukrpatent in determining patentability criteria for new dosage forms of medicines. He drew attention to the fact that the current legislation states that it is the registration of an applicant to register a utility model. Any information about the effectiveness or safety of the drug is provided in the description of the application for registration of a utility model. That is, if the description contains tabular data or examples that show an increase in efficiency or a decrease in the level of danger, then this will be accepted by the expert.

Therefore, today, if a third party believes that the applicant did not have the right to register a utility model, he must apply to the court with the aim of revoking the patent. However, since the lawsuit can drag on for a long time, the legislation should provide mechanisms to prevent such utility models from being registered, and the essence of the utility model should not be lost - a cheap, quick procedure for granting patents for technologies that are not as significant as inventions.

Mr. Pavlov also added that by limiting the list of patentable utility models, the draft laws are supposed to deal with the so-called patent trolls that exist today. If the possibility of registration as a utility model is prescribed only for devices, this will not eliminate the “patent trolls”, but only reduce their number. The legislator is trying to tightly regulate such a method of patent protection as a utility model, which may lead to the fact that “patent trolling” remains, and some new solutions that do not fall under the changed requirements will be unprotected.

Vitalii Savchuk noted that the drafts provide for the possibility of contesting patent protection even at the stage of consideration of an application for an invention. However, at the same time, if the drafts aim to deal with “patent trolling,” which is more inherent to utility models, the question arises as to why applications for inventions only are supposed to be challenged.

Mr. Pavlov agreed with this, adding that, in his opinion, the legislator proposes to solve the problem of incorrectly granted patents, which exists all over the world, in the proposed way of application challenging. Therefore, various countries have various ways to avoid the incorrect grant of patents, among them administrative challenge that occurs after the grant of a patent or at the stage of consideration of an application.

As for the appeal of the patent after its grant, the speaker noted that for utility models this method would be more beneficial for the applicant, since they would challenge the right to patent protection that he had already acquired. If the grant of a patent for utility models is disputed during the period of consideration of the application, then such a review process may be deliberately delayed by unscrupulous competitors.

Vitalii Gordienko, head of the Association of Manufacturers of Innovative Drugs “APRaD”, drew attention to the fact that pharmaceutical manufacturers support the goal of the drafts set by the legislator - to increase patient access to medicines. However, manufacturers are interested in increasing the availability of effective and high-quality drugs, and not just the cheapest ones. In all developed countries, including European ones, the main criteria for the effectiveness of healthcare are life expectancy, mortality, etc., and not the amount of money saved or the number of packages purchased compared to the previous year. These indicators are secondary, while primary indicators are to achieve a medical goal: to cure a patient, increase life expectancy and / or its quality, etc. Therefore, in order for patients to have access to high-quality and cost-effective drugs, other existing methods must be used. For example, to approve at the legislative level the possibility of concluding access agreements (managed entry agreement - MEA) between manufacturers and the state, in which, among other things, “special” prices for medicines for Ukraine will be determined on a confidential basis.

The speaker also noted that today the pharmaceutical market of Ukraine is essentially generic - the share of original drugs in it is insignificant (according to Proxima Research for the period of 9 months of 2019: 6.7% in kind and 19.6% in pecuniary expression), however, the government is trying to reform exactly the part of the market that has the least financial impact on the well-being of the healthcare system. Therefore, the changes envisaged in draft No. 2089 are unlikely to ensure the achievement of the goal stated in this legislative act - to increase the availability of medicines for patients.

In turn, Alexander Melianchuk, a representative of Hoffmann La Roche, noted that limiting the legal protection of medicines is contrary to international standards. If Ukraine follows this way, then, in addition to stopping the development of medicine, it will also lead to the fact that the country will appear in a negative light in terms of the investment climate.

Mykhailo Morgunskyi, medical marketing manager of Dr. Reddy’s Laboratories , noted that there are more effective mechanisms for ensuring the release of drugs on the market. In particular, this is an increase in free competition, reimbursement, which makes the Ukrainian market interesting for manufacturers interested in increasing the share of sales due to volumes, accordingly, the price decreases and investment in sales grows, and medicines become available.

PROVISION BOLAR

Dafts No. 2089 and No. 2259 proposes to introduce the Bolar provision in the legislation of Ukraine. Mr. Taranchuk supported this proposal, since the plan for the development and implementation of generic drugs can be up to 10 years. One of the aspects of planning is the analysis of documentation, samples of the substance, which will be the basis for the development of a generic drug. However, the existing legislation does not allow importing such samples even to assess the analysis of the possibility of developing a generic drug under the current patent for the original drug. Accordingly, without analysis and evaluation of samples of the substance, it is impossible to plan the pharmaceutical development process and decide on the inclusion of a drug in the development plan.

This leads to the fact that during the term of the patent, a company that has the ability and desire to bring a generic drug to the market, due to the ban on the import of samples, cannot timely develop it. Therefore, artificial monopolies may arise when the patent in Ukraine expires, and the analogues of the original drug are still not presented on the market for the reason that the company only after opening up the possibility of importation and use of samples starts developing generics. In the EU, USA and Canada this rule is implemented, therefore, according to the speaker, it should also be implemented in Ukraine

Mr. Taranchuk noted that the Bolar provision does not violate the rights of patent holders, since a generic drug does not enter the market before the patent for an invention expires. The implementation of this rule will enable national manufacturers to engage in pharmaceutical development and the formation of a registration dossier for a generic drug in parallel with the current patent.

In turn, Mr. Kozyrev noted that the Bolar rule has been introduced in most developed countries, however, for example, the US law defines exactly how generics should enter the market and what actions manufacturers should take for research, development and preparation of the dossier required to bring the generic drug to the market.

In Ukraine, there were cases when unscrupulous manufacturing companies registered and put on the market (for commercial use) a generic drug during the validity of a patent for the original one even when the Bolar rule was not introduced. Therefore, the position of manufacturers of innovative drugs is not to completely exclude the Bolar rule from the norms proposed by the draft, but to introduce some “fuses” into them that will enable innovative companies to feel protected during the patent term.

For example, it could be enabling generic companies to conduct research and development during the patent protection term without any restrictions. However, the registration certificate that the generic company receives for its product comes into force with a suspensive norm, that is, the day after the expiration of the patent or certificate of additional protection.

According to the speaker, the proposed option will be the compromise that will suit both innovative and generic companies.

Mr. Gordienko added that in the United States, when Bolar provision was introduced, it worked in such a way that the generic manufacturer which first applied for registration received the right to register it with the highest (after the original drug) price among generic drugs, the rest generic producers were forced to lower their prices in order to be eligible for registration. Now it is stipulated that several generic companies can apply for registration at once. However, at the same time, prices for generics, the producers of which will subsequently submit applications for registration, will be subject to the so-called generic pricing rules, which provide for a step-by-step reduction in prices for each subsequent application for registration. In Ukraine, despite the absolute leadership of generics in the pharmaceutical market, not only are there no such rules, but the topic of pricing for generic drugs is not discussed at all. The existing price regulation applies to individual drugs without differentiating them into original and generic.

Mr. Savchuk stated that it has already been repeatedly proposed to introduce a norm which exists in copyright in the legislation on intellectual property, according to which, in order to punish an unscrupulous person, compensation can be applied sa sanction. At the same time, it is not necessary to prove how much damage was caused by the actions of the violator, one just needs to prove the fact of violation and the court awards compensation. Such a mechanism would simplify the protection of a conscientious person from abuse of Bolar’s position as well.

The introduction of such a sanction would help to protect the patent holder. However, at the moment, even after the patent holder wins the lawsuit and stops violation of his legal rights, he cannot receive any compensation for the losses incurred during the period of the violation and during the consideration of the court dispute.

PARALLEL IMPORT

As regards the introduction of parallel import of medicines proposed by draft No. 2089, all participants in the discussion came to the conclusion that a more detailed discussion and analysis of this issue is necessary, especially regarding pharmacovigilance. They also concluded that it was necessary to put provisions for parallel imports in a separate draft.

Mr. Savchuk emphasized that the issue of pharmacovigilance in case of the parallel import of medicines is a key one, since in general in Ukraine, as in many countries of the world, parallel import as such is not prohibited for different groups of goods. He noted that manufacturers of medical devices have been struggling with the problem of the inability to control the quality of parallelly imported products for many years, so pharmaceutical companies now need to prepare for its solution, and the legislator should word the provisions regarding parallel imports as accurately as possible. Otherwise, the market will face the same problems as manufacturers of medical devices.

Upon the event, a press release will be prepared, which will be sent to the Committee of the Verkhovna Rada of Ukraine on National Health, Medical Care and Medical Insurance in order to take into account the views of representatives of the pharmaceutical market regarding these drafts.

* According to the data of the PharmXplorer / Pharmstandard market research analytical system by Proxima Research company, for the period of 9 months of 2019, the share of original drugs on the market was 6.7% in kind kind and 19.6% in pecuniary terms ; generic drugs: 51.5% in kind and 44.7% in pecuniary terms; other drugs that have been used in medicine for a long time (in particular, on a plant basis) and do not belong to the original and generic medicines occupy: 35.7% in pecuniary terms, and 41.8% in kind.Changing Approaches to Medicines Patenting: Market Participants Discussed Key Innovations

apteka.ua No. 44 (1215) dated November 18th, 2019.

On November 4th, Legal Alliance Company with the support of the Association of Innovative Drug Manufacturers “APRaD” held the discussion club “Discussion Pharma MeetUP on Intellectual Property: Manufacturers of Innovative Drugs vs Generics Manufacturers on Bills No. 2089 and No. 2259.” Alexander Kozyrev, associate at Bayer Ukraine, Dmytro Pavlov, head of the Department Rights to the Results of Scientific and Technical Activities of SE Ukrainian Institute of Intellectual Property (Ukrpatent), Dmytro Taranchuk, legal director at Farmak JSC, participated in the discussion. The event was moderated by Vitalii Savchuk, counsel at Legal Alliance Company. The participants discussed changes in the field of intellectual property which are aimed at: 1) combatting so-called evergreen patents; 2) introduction of the Bolar provision, which makes it possible to register a generic drug before the patent for the original drug expires and bring it to the market the very next day after the expiration of the patent; 3) parallel import of drugs.

Combatting Evergreen Patents

Dmytro Taranchuk emphasized that the reform of the sphere of intellectual property is long overdue. Therefore, Farmak supports any approach related to the reform of patent protection in the field of utility models for medicines. Whether it is an approach that provides that only devices can be utility models (draft No. 2259), or an approach according to which patent protection can apply to a new application of a known product or process, as well as the process itself (method) (draft No. 2089). The main thing is that these changes should be aimed at combating all kinds of abuses by the patent holder, when patent protection for certain forms in the European Union has long expired, but in Ukraine it continues to operate. Thus, both the development of pharmaceutical science and the availability of drugs for the population of Ukraine are constrained.

However, at the same time, Mr. Taranchuk noted that, compared with the proposed option for definint a utility model according to draft No. 2259, the option described in draft No. 2089 will still be more compromise, since it provides for certain restrictions to be introduced, but not to eliminate the utility model at all. Since, if only a device is a utility model, then most likely such an object of patent protection as a utility model in Ukraine will practically cease to exist.

Alexander Kozyrev drew attention to the fact that most often the term “evergreen patents” means secondary patents that are received by innovative companies after the expiration of the validity of primary patents.

In the pharmaceutical industry, the primary patent is a patent for a drug formula. Then, during the validity of the primary patent, the innovating company improves the drug by conducting additional clinical trials, etc. Subsequently, it obtains a new invention that meets all the requirements for patentability, and has the right to apply for a secondary patent, which is why the statement that there are certain abuses regarding the unjustified extension of the validity of a patent is incorrect. Any patent for an invention can be valid in Ukraine for 25 years, of which 20 years is the main term of patent protection and it can be extended for another 5 years. The remaining patent protection terms are new patents (secondary) that protect another object of intellectual property. Most often, these are combinations or compositions of drugs, that is, a modified and improved primary invention (drug).

Therefore, the changes proposed by draft No. 2089, according to which "the dosage or any new property or new use of the medicine which is at the current inventive step is not recognized new» are not entirely pro-European norms, which is why innovative companies oppose them.

In turn, draft No. 2089 was introduced to the public as a mechanism to improve patients' access to medicines. However, Mr. Kozyrev believes that the document proposes to level out the ability of innovative companies to refine / improve medicines, and if this norm had been adopted in Ukraine 20 years ago, now patients would not have several high-quality and useful products that they use. After all, the company-innovator, which developed the initial patent, has all the best practices in order to improve this product, and due to this, many new high-quality drugs appear on the market.

In turn, draft No. 2259 contains a different wording of the restriction regarding the legal protection of inventions, utility models, according to which legal protection is not provided to “new forms of a drug of the known inventive step, including compositions, combinations and other derivatives, if they do not differ significantly in terms of safety and / or effectiveness. ” However, what mechanisms does Ukrpatent have during the examination of the application to determine how much the new form of the drug meets the criteria of efficacy and safety compared to the previous one?

According to the speaker, the issue of availability of drugs should be regulated by amending the regulatory legal acts governing the reimbursement system and / or the Law of Ukraine “On Prices and Pricing”, and not by introducing legal restrictions on the possibility of registering new inventions. Moreover, such a norm is contrary to Article 27 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which refers to the fact that any intellectual property from any industry has the right to patent protection.

Dmytro Pavlov spoke about the mechanisms used by Ukrpatent in determining patentability criteria for new dosage forms of medicines. He drew attention to the fact that the current legislation states that it is the registration of an applicant to register a utility model. Any information about the effectiveness or safety of the drug is provided in the description of the application for registration of a utility model. That is, if the description contains tabular data or examples that show an increase in efficiency or a decrease in the level of danger, then this will be accepted by the expert.

Therefore, today, if a third party believes that the applicant did not have the right to register a utility model, he must apply to the court with the aim of revoking the patent. However, since the lawsuit can drag on for a long time, the legislation should provide mechanisms to prevent such utility models from being registered, and the essence of the utility model should not be lost - a cheap, quick procedure for granting patents for technologies that are not as significant as inventions.

Mr. Pavlov also added that by limiting the list of patentable utility models, the draft laws are supposed to deal with the so-called patent trolls that exist today. If the possibility of registration as a utility model is prescribed only for devices, this will not eliminate the “patent trolls”, but only reduce their number. The legislator is trying to tightly regulate such a method of patent protection as a utility model, which may lead to the fact that “patent trolling” remains, and some new solutions that do not fall under the changed requirements will be unprotected.

Vitalii Savchuk noted that the drafts provide for the possibility of contesting patent protection even at the stage of consideration of an application for an invention. However, at the same time, if the drafts aim to deal with “patent trolling,” which is more inherent to utility models, the question arises as to why applications for inventions only are supposed to be challenged.

Mr. Pavlov agreed with this, adding that, in his opinion, the legislator proposes to solve the problem of incorrectly granted patents, which exists all over the world, in the proposed way of application challenging. Therefore, various countries have various ways to avoid the incorrect grant of patents, among them administrative challenge that occurs after the grant of a patent or at the stage of consideration of an application.

As for the appeal of the patent after its grant, the speaker noted that for utility models this method would be more beneficial for the applicant, since they would challenge the right to patent protection that he had already acquired. If the grant of a patent for utility models is disputed during the period of consideration of the application, then such a review process may be deliberately delayed by unscrupulous competitors.

Vitalii Gordienko, head of the Association of Manufacturers of Innovative Drugs “APRaD”, drew attention to the fact that pharmaceutical manufacturers support the goal of the drafts set by the legislator - to increase patient access to medicines. However, manufacturers are interested in increasing the availability of effective and high-quality drugs, and not just the cheapest ones. In all developed countries, including European ones, the main criteria for the effectiveness of healthcare are life expectancy, mortality, etc., and not the amount of money saved or the number of packages purchased compared to the previous year. These indicators are secondary, while primary indicators are to achieve a medical goal: to cure a patient, increase life expectancy and / or its quality, etc. Therefore, in order for patients to have access to high-quality and cost-effective drugs, other existing methods must be used. For example, to approve at the legislative level the possibility of concluding access agreements (managed entry agreement - MEA) between manufacturers and the state, in which, among other things, “special” prices for medicines for Ukraine will be determined on a confidential basis.

The speaker also noted that today the pharmaceutical market of Ukraine is essentially generic - the share of original drugs in it is insignificant (according to Proxima Research for the period of 9 months of 2019: 6.7% in kind and 19.6% in pecuniary expression), however, the government is trying to reform exactly the part of the market that has the least financial impact on the well-being of the healthcare system. Therefore, the changes envisaged in draft No. 2089 are unlikely to ensure the achievement of the goal stated in this legislative act - to increase the availability of medicines for patients.

In turn, Alexander Melianchuk, a representative of Hoffmann La Roche, noted that limiting the legal protection of medicines is contrary to international standards. If Ukraine follows this way, then, in addition to stopping the development of medicine, it will also lead to the fact that the country will appear in a negative light in terms of the investment climate.

Mykhailo Morgunskyi, medical marketing manager of Dr. Reddy’s Laboratories , noted that there are more effective mechanisms for ensuring the release of drugs on the market. In particular, this is an increase in free competition, reimbursement, which makes the Ukrainian market interesting for manufacturers interested in increasing the share of sales due to volumes, accordingly, the price decreases and investment in sales grows, and medicines become available.

PROVISION BOLAR

Dafts No. 2089 and No. 2259 proposes to introduce the Bolar provision in the legislation of Ukraine. Mr. Taranchuk supported this proposal, since the plan for the development and implementation of generic drugs can be up to 10 years. One of the aspects of planning is the analysis of documentation, samples of the substance, which will be the basis for the development of a generic drug. However, the existing legislation does not allow importing such samples even to assess the analysis of the possibility of developing a generic drug under the current patent for the original drug. Accordingly, without analysis and evaluation of samples of the substance, it is impossible to plan the pharmaceutical development process and decide on the inclusion of a drug in the development plan.

This leads to the fact that during the term of the patent, a company that has the ability and desire to bring a generic drug to the market, due to the ban on the import of samples, cannot timely develop it. Therefore, artificial monopolies may arise when the patent in Ukraine expires, and the analogues of the original drug are still not presented on the market for the reason that the company only after opening up the possibility of importation and use of samples starts developing generics. In the EU, USA and Canada this rule is implemented, therefore, according to the speaker, it should also be implemented in Ukraine

Mr. Taranchuk noted that the Bolar provision does not violate the rights of patent holders, since a generic drug does not enter the market before the patent for an invention expires. The implementation of this rule will enable national manufacturers to engage in pharmaceutical development and the formation of a registration dossier for a generic drug in parallel with the current patent.

In turn, Mr. Kozyrev noted that the Bolar rule has been introduced in most developed countries, however, for example, the US law defines exactly how generics should enter the market and what actions manufacturers should take for research, development and preparation of the dossier required to bring the generic drug to the market.

In Ukraine, there were cases when unscrupulous manufacturing companies registered and put on the market (for commercial use) a generic drug during the validity of a patent for the original one even when the Bolar rule was not introduced. Therefore, the position of manufacturers of innovative drugs is not to completely exclude the Bolar rule from the norms proposed by the draft, but to introduce some “fuses” into them that will enable innovative companies to feel protected during the patent term.

For example, it could be enabling generic companies to conduct research and development during the patent protection term without any restrictions. However, the registration certificate that the generic company receives for its product comes into force with a suspensive norm, that is, the day after the expiration of the patent or certificate of additional protection.

According to the speaker, the proposed option will be the compromise that will suit both innovative and generic companies.

Mr. Gordienko added that in the United States, when Bolar provision was introduced, it worked in such a way that the generic manufacturer which first applied for registration received the right to register it with the highest (after the original drug) price among generic drugs, the rest generic producers were forced to lower their prices in order to be eligible for registration. Now it is stipulated that several generic companies can apply for registration at once. However, at the same time, prices for generics, the producers of which will subsequently submit applications for registration, will be subject to the so-called generic pricing rules, which provide for a step-by-step reduction in prices for each subsequent application for registration. In Ukraine, despite the absolute leadership of generics in the pharmaceutical market, not only are there no such rules, but the topic of pricing for generic drugs is not discussed at all. The existing price regulation applies to individual drugs without differentiating them into original and generic.

Mr. Savchuk stated that it has already been repeatedly proposed to introduce a norm which exists in copyright in the legislation on intellectual property, according to which, in order to punish an unscrupulous person, compensation can be applied sa sanction. At the same time, it is not necessary to prove how much damage was caused by the actions of the violator, one just needs to prove the fact of violation and the court awards compensation. Such a mechanism would simplify the protection of a conscientious person from abuse of Bolar’s position as well.

The introduction of such a sanction would help to protect the patent holder. However, at the moment, even after the patent holder wins the lawsuit and stops violation of his legal rights, he cannot receive any compensation for the losses incurred during the period of the violation and during the consideration of the court dispute.

PARALLEL IMPORT

As regards the introduction of parallel import of medicines proposed by draft No. 2089, all participants in the discussion came to the conclusion that a more detailed discussion and analysis of this issue is necessary, especially regarding pharmacovigilance. They also concluded that it was necessary to put provisions for parallel imports in a separate draft.

Mr. Savchuk emphasized that the issue of pharmacovigilance in case of the parallel import of medicines is a key one, since in general in Ukraine, as in many countries of the world, parallel import as such is not prohibited for different groups of goods. He noted that manufacturers of medical devices have been struggling with the problem of the inability to control the quality of parallelly imported products for many years, so pharmaceutical companies now need to prepare for its solution, and the legislator should word the provisions regarding parallel imports as accurately as possible. Otherwise, the market will face the same problems as manufacturers of medical devices.

Upon the event, a press release will be prepared, which will be sent to the Committee of the Verkhovna Rada of Ukraine on National Health, Medical Care and Medical Insurance in order to take into account the views of representatives of the pharmaceutical market regarding these drafts.

* According to the data of the PharmXplorer / Pharmstandard market research analytical system by Proxima Research company, for the period of 9 months of 2019, the share of original drugs on the market was 6.7% in kind kind and 19.6% in pecuniary terms ; generic drugs: 51.5% in kind and 44.7% in pecuniary terms; other drugs that have been used in medicine for a long time (in particular, on a plant basis) and do not belong to the original and generic medicines occupy: 35.7% in pecuniary terms, and 41.8% in kind.Changing Approaches to Medicines Patenting: Market Participants Discussed Key Innovations

apteka.ua No. 44 (1215) dated November 18th, 2019.

On November 4th, Legal Alliance Company with the support of the Association of Innovative Drug Manufacturers “APRaD” held the discussion club “Discussion Pharma MeetUP on Intellectual Property: Manufacturers of Innovative Drugs vs Generics Manufacturers on Bills No. 2089 and No. 2259.” Alexander Kozyrev, associate at Bayer Ukraine, Dmytro Pavlov, head of the Department Rights to the Results of Scientific and Technical Activities of SE Ukrainian Institute of Intellectual Property (Ukrpatent), Dmytro Taranchuk, legal director at Farmak JSC, participated in the discussion. The event was moderated by Vitalii Savchuk, counsel at Legal Alliance Company. The participants discussed changes in the field of intellectual property which are aimed at: 1) combatting so-called evergreen patents; 2) introduction of the Bolar provision, which makes it possible to register a generic drug before the patent for the original drug expires and bring it to the market the very next day after the expiration of the patent; 3) parallel import of drugs.

Combatting Evergreen Patents

Dmytro Taranchuk emphasized that the reform of the sphere of intellectual property is long overdue. Therefore, Farmak supports any approach related to the reform of patent protection in the field of utility models for medicines. Whether it is an approach that provides that only devices can be utility models (draft No. 2259), or an approach according to which patent protection can apply to a new application of a known product or process, as well as the process itself (method) (draft No. 2089). The main thing is that these changes should be aimed at combating all kinds of abuses by the patent holder, when patent protection for certain forms in the European Union has long expired, but in Ukraine it continues to operate. Thus, both the development of pharmaceutical science and the availability of drugs for the population of Ukraine are constrained.

However, at the same time, Mr. Taranchuk noted that, compared with the proposed option for definint a utility model according to draft No. 2259, the option described in draft No. 2089 will still be more compromise, since it provides for certain restrictions to be introduced, but not to eliminate the utility model at all. Since, if only a device is a utility model, then most likely such an object of patent protection as a utility model in Ukraine will practically cease to exist.

Alexander Kozyrev drew attention to the fact that most often the term “evergreen patents” means secondary patents that are received by innovative companies after the expiration of the validity of primary patents.

In the pharmaceutical industry, the primary patent is a patent for a drug formula. Then, during the validity of the primary patent, the innovating company improves the drug by conducting additional clinical trials, etc. Subsequently, it obtains a new invention that meets all the requirements for patentability, and has the right to apply for a secondary patent, which is why the statement that there are certain abuses regarding the unjustified extension of the validity of a patent is incorrect. Any patent for an invention can be valid in Ukraine for 25 years, of which 20 years is the main term of patent protection and it can be extended for another 5 years. The remaining patent protection terms are new patents (secondary) that protect another object of intellectual property. Most often, these are combinations or compositions of drugs, that is, a modified and improved primary invention (drug).

Therefore, the changes proposed by draft No. 2089, according to which "the dosage or any new property or new use of the medicine which is at the current inventive step is not recognized new» are not entirely pro-European norms, which is why innovative companies oppose them.

In turn, draft No. 2089 was introduced to the public as a mechanism to improve patients' access to medicines. However, Mr. Kozyrev believes that the document proposes to level out the ability of innovative companies to refine / improve medicines, and if this norm had been adopted in Ukraine 20 years ago, now patients would not have several high-quality and useful products that they use. After all, the company-innovator, which developed the initial patent, has all the best practices in order to improve this product, and due to this, many new high-quality drugs appear on the market.

In turn, draft No. 2259 contains a different wording of the restriction regarding the legal protection of inventions, utility models, according to which legal protection is not provided to “new forms of a drug of the known inventive step, including compositions, combinations and other derivatives, if they do not differ significantly in terms of safety and / or effectiveness. ” However, what mechanisms does Ukrpatent have during the examination of the application to determine how much the new form of the drug meets the criteria of efficacy and safety compared to the previous one?

According to the speaker, the issue of availability of drugs should be regulated by amending the regulatory legal acts governing the reimbursement system and / or the Law of Ukraine “On Prices and Pricing”, and not by introducing legal restrictions on the possibility of registering new inventions. Moreover, such a norm is contrary to Article 27 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which refers to the fact that any intellectual property from any industry has the right to patent protection.

Dmytro Pavlov spoke about the mechanisms used by Ukrpatent in determining patentability criteria for new dosage forms of medicines. He drew attention to the fact that the current legislation states that it is the registration of an applicant to register a utility model. Any information about the effectiveness or safety of the drug is provided in the description of the application for registration of a utility model. That is, if the description contains tabular data or examples that show an increase in efficiency or a decrease in the level of danger, then this will be accepted by the expert.

Therefore, today, if a third party believes that the applicant did not have the right to register a utility model, he must apply to the court with the aim of revoking the patent. However, since the lawsuit can drag on for a long time, the legislation should provide mechanisms to prevent such utility models from being registered, and the essence of the utility model should not be lost - a cheap, quick procedure for granting patents for technologies that are not as significant as inventions.

Mr. Pavlov also added that by limiting the list of patentable utility models, the draft laws are supposed to deal with the so-called patent trolls that exist today. If the possibility of registration as a utility model is prescribed only for devices,this will not eliminate the “patent trolls”, but only reduce their number. The legislator is trying to tightly regulate such a method of patent protection as a utility model, which may lead to the fact that “patent trolling” remains, and some new solutions that do not fall under the changed requirements will be unprotected.

Vitalii Savchuk noted that the drafts provide for the possibility of contesting patent protection even at the stage of consideration of an application for an invention. However, at the same time, if the drafts aim to deal with “patent trolling,” which is more inherent to utility models, the question arises as to whyapplications for inventions only are supposed to be challenged.

Mr. Pavlov agreed with this, adding that, in his opinion, the legislator proposes to solve the problem of incorrectly granted patents, which exists all over the world, in the proposed way of application challenging. Therefore, various countries have various ways to avoid the incorrect grant of patents, among them administrative challenge that occurs after the grant of a patent or at the stage of consideration of an application.

As for the appeal of the patent after its grant, the speaker noted that for utility models this method would be more beneficial for the applicant, since they would challenge the right to patent protection that he had already acquired. If the grant of a patent for utility models is disputed during the period of consideration of the application, then such a review process may be deliberately delayed by unscrupulous competitors.

Vitalii Gordienko, head of the Association of Manufacturers of Innovative Drugs “APRaD”, drew attention to the fact that pharmaceutical manufacturers support the goal of the drafts set by the legislator - to increase patient access to medicines. However, manufacturers are interested in increasing the availability of effective and high-quality drugs, and not just the cheapest ones. In all developed countries, including European ones, the main criteria for the effectiveness of healthcare are life expectancy, mortality, etc., and not the amount of money saved or the number of packages purchased compared to the previous year. These indicators are secondary, while primary indicators are to achieve a medical goal: to cure a patient, increase life expectancy and / or its quality, etc. Therefore, in order for patients to have access to high-quality and cost-effective drugs, other existing methods must be used. For example, to approve at the legislative level the possibility of concluding access agreements (managed entry agreement - MEA) between manufacturers and the state, in which, among other things, “special” prices for medicines for Ukraine will be determined on a confidential basis.

The speaker also noted that today the pharmaceutical market of Ukraine is essentially generic - the share of original drugs in it is insignificant (according to Proxima Research for the period of 9 months of 2019: 6.7% in kind and 19.6% in pecuniary expression), however, the government is trying to reform exactly the part of the market that has the least financial impact on the well-being of the healthcare system. Therefore, the changes envisaged in draft No. 2089 are unlikely to ensure the achievement of the goal stated in this legislative act - to increase the availability of medicines for patients.

In turn, Alexander Melianchuk, a representative of Hoffmann La Roche, noted that limiting the legal protection of medicines is contrary to international standards. If Ukraine follows this way, then, in addition to stopping the development of medicine, it will also lead to the fact that the country will appear in a negative light in terms of the investment climate.

Mykhailo Morgunskyi, medical marketing manager of Dr. Reddy’s Laboratories , noted that there are more effective mechanisms for ensuring the release of drugs on the market. In particular, this is an increase in free competition, reimbursement, which makes the Ukrainian market interesting for manufacturers interested in increasing the share of sales due to volumes, accordingly, the price decreases and investment in sales grows, and medicines become available.

PROVISION BOLAR

Dafts No. 2089 and No. 2259 proposes to introduce the Bolar provision in the legislation of Ukraine. Mr. Taranchuk supported this proposal, since the plan for the development and implementation of generic drugs can be up to 10 years. One of the aspects of planning is the analysis of documentation, samples of the substance, which will be the basis for the development of a generic drug. However, the existing legislation does not allow importing such samples even to assess the analysis of the possibility of developing a generic drug under the current patent for the original drug. Accordingly, without analysis and evaluation of samples of the substance, it is impossible to plan the pharmaceutical development process and decide on the inclusion of a drug in the development plan.

This leads to the fact that during the term of the patent, a company that has the ability and desire to bring a generic drug to the market, due to the ban on the import of samples, cannot timely develop it. Therefore, artificial monopolies may arise when the patent in Ukraine expires, and the analogues of the original drug are still not presented on the market for the reason that the company only after opening up the possibility of importation and use of samples starts developing generics. In the EU, USA and Canada this rule is implemented, therefore, according to the speaker, it should also be implemented in Ukraine

Mr. Taranchuk noted that the Bolar provision does not violate the rights of patent holders, since a generic drug does not enter the market before the patent for an invention expires. The implementation of this rule will enable national manufacturers to engage in pharmaceutical development and the formation of a registration dossier for a generic drug in parallel with the current patent.

In turn, Mr. Kozyrev noted that the Bolar rule has been introduced in most developed countries, however, for example, the US law defines exactly how generics should enter the market and what actions manufacturers should take for research, development and preparation of the dossier required to bring the generic drug to the market.

In Ukraine, there were cases when unscrupulous manufacturing companies registered and put on the market (for commercial use) a generic drug during the validity of a patent for the original one even when the Bolar rule was not introduced. Therefore, the position of manufacturers of innovative drugs is not to completely exclude the Bolar rule from the norms proposed by the draft, but to introduce some “fuses” into them that will enable innovative companies to feel protected during the patent term.

For example, it could be enabling generic companies to conduct research and development during the patent protection term without any restrictions. However, the registration certificate that the generic company receives for its product comes into force with a suspensive norm, that is, the day after the expiration of the patent or certificate of additional protection.

According to the speaker, the proposed option will be the compromise that will suit both innovative and generic companies.

Mr. Gordienko added that in the United States, when Bolar provision was introduced, it worked in such a way that the generic manufacturer which first applied for registration received the right to register it with the highest (after the original drug) price among generic drugs, the rest generic producers were forced to lower their prices in order to be eligible for registration. Now it is stipulated that several generic companies can apply for registration at once. However, at the same time, prices for generics, the producers of which will subsequently submit applications for registration, will be subject to the so-called generic pricing rules, which provide for a step-by-step reduction in prices for each subsequent application for registration. In Ukraine, despite the absolute leadership of generics in thepharmaceutical market, not only are there no such rules, but the topic of pricing for generic drugs is not discussed at all. The existing price regulation applies to individual drugs without differentiating them into original and generic.

Mr. Savchuk stated that it has already been repeatedly proposed to introduce a norm which exists in copyright in the legislation on intellectual property, according to which, in order to punish an unscrupulous person, compensation can be applied sa sanction. At the same time, it is not necessary to prove how much damage was caused by the actions of the violator, one just needs to prove the fact of violation and the court awards compensation. Such a mechanism would simplify the protection of a conscientious person from abuse of Bolar’s position as well.

The introduction of such a sanction would help to protect the patent holder. However, at the moment, even after the patent holder wins the lawsuit and stops violation of his legal rights, he cannot receive any compensation for the losses incurred during the period of the violation and during the consideration of the court dispute.

PARALLEL IMPORT

As regards the introduction of parallel import of medicines proposed by draft No. 2089, all participants in the discussion came to the conclusion that a more detailed discussion and analysis of this issue is necessary, especially regarding pharmacovigilance. They also concluded that it was necessary to put provisions for parallel imports in a separate draft.

Mr. Savchuk emphasized that the issue of pharmacovigilance in case of the parallel import of medicines is a key one, since in general in Ukraine, as in many countries of the world, parallel import as such is not prohibited for different groups of goods. He noted that manufacturers of medical devices have been struggling with the problem of the inability to control the quality of parallelly imported products for many years, so pharmaceutical companies now need to prepare for its solution, and the legislator should word the provisions regarding parallel imports as accurately as possible. Otherwise, the market will face the same problems as manufacturers of medical devices.

Upon the event, a press release will be prepared, which will be sent to the Committee of the Verkhovna Rada of Ukraine on National Health, Medical Care and Medical Insurance in order to take into account the views of representatives of the pharmaceutical market regarding these drafts.

* According to the data of the PharmXplorer / Pharmstandard market research analytical system by Proxima Research company, for the period of 9 months of 2019, the share of original drugs on the market was 6.7% in kind kind and 19.6% in pecuniary terms ; generic drugs: 51.5% in kind and 44.7% in pecuniary terms; other drugs that have been used in medicine for a long time (in particular, on a plant basis) and do not belong to the original and generic medicines occupy: 35.7% in pecuniary terms, and 41.8% in kind.

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