The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Parvis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Tuesday, 14 February 2012

One in the eye for Pfizer glaucoma patent policy?

Pharmaceutical patents are always controversial: see this Kat's post here on the heated arguments for and against the extension of the duration of pharmaceutical patents. Such debates raise the additional question: what can you do, if anything, when your valuable pharmaceutical patent is nearing that all important expiration date? The recent conduct of global pharmaceutical giant Pfizer in Italy provides an example of what not to do in these circumstances as its conduct was severely criticised by the Autorità Garante della Concorrenza e del Mercato (the Italian Competition Authority, ICA).

Pfizer held the patent for Xalatan (EP0364417), a product used to treat glaucoma and whose active ingredient is latanoprost. Unfortunately for Pfizer, the patent protection for Xalatan in Italy was set to expire in September 2009. However, to protect its market position, Pfizer engaged in a complex strategy to delay the entry of generic specialty drugs based on latanoprost. First, Pfizer prolonged the duration of patent protection from September 2009 to July 2011 -- and then to January 2012 -- by obtaining that EU phenomenon known as Supplementary Protection Certificates (SPCs) for the latanoprost product. This was in addition to filing a divisional application for latanoprost in 2002 (EP1225168). It appears that no new drug was forthcoming from the divisional application.

In its decision the ICA was highly critical of Pfizer's conduct, concluding (at [198]) that it demonstrated that Pfizer had no intention of launching a new drug, but only of excluding generics from the Italian market. The divisional application was revoked by the EPO in October 2010, which led to an annulment of the SPC. Then, in January 2011, Pfizer requested a further year extension of the Xalatan patent so that it could conduct paediatric trials (under Article 36 of the Regulation on medicinal products for paediatric use 1901/2006, paediatric trials can extend an SPC by up to six months). Again, the ICA was critical of such conduct, highlighting (at [214]) that Xalatan was a drug used to treat a disease which typically affects older people and so claiming a paediatric use appeared only to be an attempt to extend further the period of patent protection.

Secondly, Pfizer sent numerous notices to generic drug manufacturers in which it warned that it would seek a large award of compensation, should the generic medicines be commercialised prior to July 2011, at the time of the new expiration date for the Xalatan patent. One recipient was generic manufacturer Ratiopharm Italia whose report to the ICA, together with a complaint by the European Generic Medicines Association (the EGA), triggered the investigation of Pfizer's conduct.

The combined effect of Pfizer's strategies was that the first market entry by a generic manufacturer was not possible until May 2010, with the last generic manufacturer entering the market more than 18 months after the expiry of the Xalatan patent in September 2009. The seven month delay in generic manufacturers first entering the market (ie September 2009 to May 2010) reportedly earned Pfizer a profit of approximately €17m.  In response, Pfizer argued that it could not have lowered prices of Xatalan. This was because, owing to parallel trade, if Pfizer reduced the price in Italy, it would be forced to reduce the price in other European markets with 'higher prices' where the Xatalan patent was protected by the SPC until July 2011.

On 11 January 2012 the ICA found that Pfizer had abused its dominant position: it fined Pfizer €10.6m and ordered it to stop the conduct referred to above. The decision (in Italian) was released recently. A press release issued by the ICA (in English) however stated:
'Thanks to its strategy, Pfizer managed to (i) increase the effective market entry costs for the manufacturers of generic drugs; (ii) delay the market entry of Xalatan-equivalent specialty drugs by at least 7 months; (iii) maintain the de facto exclusive commercialization of medicines based on latanoprost even after patent coverage had expired; (iv) cause an estimated 14 million euros in lost savings by the NHS [the Italian National Health Service - not the UK one]. These elements led the Authority to classify the sanctioned competitive violation as very serious'.
The IPKat wonders whether a €10.6m fine was the right level of punishment for this conduct: should it have been higher on account of the company's egregious activity or lower because Pfizer was only seeking to play the game by the available rules?

Merpel notes the complete condemnation by the ICA of Pfizer's actions -- which it viewed as a deliberate strategy to extend artificially the period of patent protection of not only Xatalan but its 'blockbuster' products. She asks should there be further investigation by the ICA of this conduct, and whether the Italian NHS should try to recoup some of the €14m it 'overpaid' to Pfizer?

This Kat thanks Antonio Selas of the PatLit blog fame for his translation of various sections of the ICA decision (this Kat finding that her university Italian was not always suited to the intricacies of a high level discussion of patents!)


Darren Smyth said...

I don't follow "the absence of a new drug, which normally follows the divisional application" in para 198 of the decision, and "no new drug was forthcoming from the divisional application" in the post. From where comes the idea that divisional applications are filed or should be filed in relation to a new drug?

Anonymous said...

I am having real problems trying to see what Pfizer did wrong here.

It is explicit that the paediatric extension is awarded for drugs which undergo paediatric tests, irrespective of the results of those tests. The very fact that xalatan was awarded a PIP shows that the regulatory authority was happy - in principle - that the drug could be used in paeds if suitable. Were this not the case, xalatan would not have received a PIP.

And often there are very valid bona fide reasons to base SPCs of divisional applications.

I hope this decision will be appealed and that Pfizer win on appeal. The ICA clearly doesn't understand IP.

Anonymous said...

The extract translated by Mr. Selas leaves out some interesting tidbits that doubtlessly contributed to the ICA's decision. Firstly, the original patentee had missed the deadline for requesting the SPC on the first patent in Italy and another country (which has been redacted). The divisional (which must have been a second- or third-generation divisional, because it was filed years after the grant of the first patent) was filed after Pfizer became aware of this and only validated in those countries where the SPC deadline for the first patent had been missed. According to the ICA (but here's where things become rather confuse), it covered the same active principle as the first patent, and was thus a case of double patenting. This is disputed by Pfizer. The divisional was eventually invalidated in first-instance opposition proceedings (for extension of subject-matter), but the appeal is apparently stil running. The request for the pediatric SPC, however, was filed after the decision of the Oposition Division.
The ICA has apparently also been very negatively influenced by the internal Pfizer communications gathered during its investigation. Unfortunately (for us curious cats, not for Pfizer) those juicy bits are all redacted from the ICA's decision..

Anonymous said...

I am also finding it difficult to see what Pfizer has done wrong in Italy in this instance?

Even if it is accepted that they missed the date to file an SPC as alleged above and that their divisional will eventually be found invalid by the BoA, Pfizer would appear to have merely attempted by all (legal) means possible to extend their Patent rights so as to maximise the profits they can obtain from a product which they own the rights to?

If the generics thought this was unfair they are entitled before the law to seek to remedy this situation, which indeed it appears they have done so.

I do not state that no IP related crooked dealing occur, but we as fellow IP professionals should perhaps keep our odium for those times when clear wrong doing has been found, rather than when a team of IP professionals have just done their job to the best of their abilities!

Anonymous said...

"The divisional (which must have been a second- or third-generation divisional, because it was filed years after the grant of the first patent"

Shock! Horror! Divisional applications filed after the filing date of the parent (though legally having the same fd)! Those pesky pharma companies need bringing down a peg or two.

Thank heavens for the latest news of R&D site closures by astrazeneca to follow on from those of Pfizer. The sooner these good for nothing companies are extinguished the better!!!!

Anonymous said...

Anonymous@10:43 should ask Pfizer for one of their "chill pills".

The main outstanding question here is whether the divisional was a case of double patenting. The ICA believes so, although it seems to be hardly qualified to know, whereas Pfizer quite disingenuously argues that the Opposition Division didn't revoke the patent on grounds of double-patenting, but rather because of extension of subject-matter. This is disingenuous because, of course, double patenting is not a ground for opposition.

The most important take-away lesson from this case is that, even if something is allowable under patent law (which Pfizer's manoeuvres indeed appear to have been), it does not necessarily mean that it is OK under competition law. Thoughtful patent lawyers and attorneys should keep that in mind and stay informed about the strictures of competition law as well (as Samsung's legal staff is probably learning right now with regard to standard-essential patents).

In the present case, we probably still haven't seen the endgame. I'm impatient to see how this will ultimately play in court.

What we should be able to agree upon, in any case, is that it certainly wasn't the stated aim of the lawmakers, when they introduced pediatric SPCs, to allow the pharmaceutical industry to further extend the patent term for a drug for such an un-pediatric condition as glaucoma (according to the ICA's decision, less than 1% of are glaucoma patients are underage).

Anonymous said...

What anon at 9:06 needs to realise is that everything in the patent world is monopolistic and therefore directly affects competition. As educated patent lawyers some of us are also aware of competition law and can determine that the courts of member states sometime get it wrong. The EU Commission itself is under the impression that everything a pharma company does in respect of patents is anti-competitive, so it is no surprise to find others 'at it' as well.

As for your 'what we should be able to agree upon...", well why should we? And, no we shouldn't.

I believe Pfizer are currently working on a lifestyle product (typical self-interest!) called a 'realism pill'. I'll be sure to have them send you a sample.

Anonymous said...

As for your 'what we should be able to agree upon...", well why should we?

Maybe because it was in the package? The introduction to the Regulation reads:

"This European Union (EU) Regulation aims to improve the health and quality of life of children in Europe by ensuring that new medicines for children and medicines already on the market are fully adapted to their specific needs."

Nothing about "extending the life of an old patent for a medicine that is hardly ever going to be administered to children". (Please note that I wrote the "stated" aim: I certainly prefer not to delve into the individual consciences of the lawmakers.)

My realism is at very healthy levels, thank you, as is my cynicism. So much so, in fact, that when I read Anonymous@4:55 point that the whole paediatric extension must have been hunky-dory because the PIP was approved by "the regulatory authority", I can't avoid noticing that the "regulatory authority" in question is the Paediatric Committee of the European Medicines Agency, which has come under quite some flak for its conflicts of interest.

Kharol said...

this sounds like a pretty clear case of "abuse of process". And given that the fine was less than the profit it overall seems to have paid off. Not good (unless the 14m damage to the public is to be collected on top of the fine).
But if Pfizer get away with still a profit after fine, there remains an incentive for (what appears to me as) inequitable conduct.

Anonymous said...

Surely a case of never mind the law just follow the policy? Super Mario was able to deliver it along with his repeal of the patent linkage law to show that one Mediterranean state can do what the Commission wants.

One can't help thinking that the Competition Authority redacted the confidential e-mails just to hide how flimsy the case of sinister intent really was. It would be entertaining to see how the attorneys who missed the deadline were described there - but Pfizer seem to have chosen not to tell the real story about their attempts to avoid losing their rights on a formality.

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