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 The divisional application was revoked by the EPO in October 2010, which led to an annulment of the SPC.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!)