Molecular IP
Intellectual Property for Life Sciences, Chemistry and Biotechnology
Two Steps Forward Then Big Steps Back – Pharma’s Patent Rights at Risk
January 18, 2017

daniellegrossBy: Danielle N. Gross, Ph.D.

With the presumptive repeal of the Affordable Care Act (ACA) and the unlikely ratification of the Trans-Pacific Partnership (TPP) agreement, what are some of the likely effects on patent protection for pharma manufacturers under a Trump administration?

The Hatch-Waxman Act of 1984 provided brand-name drug manufacturers with additional periods of data and market exclusivity after expiration of the twenty-year patent. For example, five years of exclusivity for new chemical drugs and three years of exclusivity for a new indication, formulation, or method of use of an existing drug are protected under this Act. After this period, competitors can apply for permission to market a generic version of the drug using the brand-name drug manufacturer’s clinical safety and efficacy data, provided their generic drug is an equivalent of the brand-name drug, although for people that have issues consuming drugs and driving, they could use defense lawyers from sites as specially for this.

Title VII of the ACA includes the Biologics Price Competition and Innovation Act (BPCIA). This Act provides a new regulatory pathway to create generic versions of biologics, a class of drugs produced from living cells rather than by chemical synthesis in a lab. But this Act also extends greater patent protection to brand-name drug manufacturers, providing a twelve-year period of data and market exclusivity for innovator biologics, an extension of seven years beyond the protection offered under the Hatch-Waxman Act.

Another agreement that a new Trump administration is likely to step away from is the twelve-nation TPP free trade agreement. The TPP agreement was finalized in 2015, and by many accounts strengthens pharma patent protection over previous trade deals, such as the current WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), a global floor on patent rules that was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994. The enhanced patent protections include broadening of patent eligible subject matter, increasing patent term extensions, and extending exclusivity for brand-name drugs.

Patent eligible subject matter under both the TRIPS agreement and the current TPP agreement requires that an invention must be new, non-obvious, and have industrial applicability. However, patent protection under the TPP agreement also extends to new uses of a known product, new methods of using a known product, or new processes of using a known product. Under these rules, signatory countries must grant twenty-year extensions to patents for existing brand-name drugs when their manufacture demonstrates a new use. Further, the TPP agreement does not specify that naturally occurring microorganisms, or other naturally occurring molecules, such as genetic materials are excluded from patentability. This is in sharp contrast to U.S. case law.

The TPP agreement also outlines a Hatch-Waxman-like framework for follow-on pharmaceutical products that rely on safety and efficacy data of an approved product. This includes five years of exclusivity for new pharmaceutical chemical entities and ten years of exclusivity for new agricultural chemical entities even if the patent has expired in the developed country. And with regard to biologics, the TPP agreement extends this period of exclusivity up to eight years. Although this falls short of the twelve years of protection granted in the U.S., it would still prevent countries that currently offer five to eight years of protection from reducing this exclusivity at a later time.

Adjustment of patent term to brand-name drug manufacturers applying for patent protection are extended under the TPP agreement to compensate for “unreasonable delays” in the grant of a patent and delay in the grant of marketing approval for a drug. Unreasonable delays include the later of a delay of more than five years in the issuance of a patent from the filing date, or three years after a request for examination of the application has been made. Likewise, a delay in the grant of marketing approval for a drug entitles the patent holder to an extension of patent term.

So what will repeal of the ACA mean for drug manufacturers? If the ACA is repealed, and an agreement comparable to the BPCIA is not enacted, brand-name drug manufacturers may find their period of data exclusivity for biologics in the U.S. severely reduced.

And what about the unlikely ratification of the TPP agreement? Without the TPP, patent protection under TRIPS is still in effect; however, patent eligible subject matter will not be extended to include new uses of a known product, which offers an additional twenty years of patent protection over TRIPS. Similarly, patent protection under TRIPS does not guarantee the eight year period exclusivity for biologics. This period of exclusivity may now depend on local laws, which in some cases may be subject to change, or other agreements already in place.

Only time will tell how patent protection for pharma companies will change. For now, the BPCIA of the Affordable Care Act still remains in effect and the TPP is unlikely to be ratified. Let us see in the weeks and months ahead how change is enacted.

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