Conference Report: CIPIL 2020 (Part 2)

This Kat hopes you enjoyed the first instalment of her coverage of CIPIL 2020. We now turn to the second half of the conference.

After lunch, the discussion turned to Precision Medicine, Drug Repurposing & the Next Steps for Competition Law, with perspectives from academia. Dr Mateo Aboy (University of Cambridge) discussed whether recent case law is ‘good’ for precision medicine with an empirical analysis of patent judgments in the US and Europe. He moved through his presentation with the aid of a series of articles he had written or co-written, starting by defining precision medicine as the tailoring of medical treatment to the individual characteristics of each patient. This could be explicit, based on biomarkers and medical responses, or implicit, using AI.

These Kats support collaborative research

By mapping key US Supreme Court decisions, including Myriad, Mayo and Alice, he was able to illustrate that sometimes the supposed effect of court decisions actually comes from other factors. For instance, the standard of novelty/non-obviousness was already taking care of the issue of isolated gene patent activity; indeed, these patents are also not being granted despite the legal position not being the same as in the US. He did note that it is hard for patent attorneys to draft around Myriad – especially small entities – despite its intention to be a fairly narrow decision. Indeed, 85% of Myriad-based rejections were actually directed to patent claims which extended beyond isolated DNA. This indicates that patent examiners are using caselaw in a different, wider way than that intended by the Supreme Court.

By contrast, the impact of Mayo indicates that it has incentivised ‘crafty drafting’, as it is easier to obtain a patent for a method of treatment than a method of diagnosis. Its other effects include increased uncertainty, increased prosecution costs, and lower proportions of successful small entities. Alice has had the most significant impact overall, and interestingly he noted that there has been a significant difference in the way in which Alice has been interpreted and applied by the USPTO depending on the priorities of its head. His overall assessment of these three cases was that there has been the least impact on the largest entities with the greatest resources.

This presentation also sparked a discussion including, from Lord Justice Arnold, a question of whether it should really be easier and more desirable to obtain patent protection for a method of treatment than a method of diagnosis. Mateo answered that it is not that patenting a method of diagnosis is illegitimate in the US, but that the Mayo conditions are more onerous – while also noting in response to another question that the kinds of claims available will drive methods of business, alongside other factors encouraging investment in US firms such as the availability of capital.

The next empirical presentation came from Dr John Liddicoat (also University of Cambridge) on whether the EU incentive for drug repositioning has been effective with an observational study. This looks at rates of repositioning before and after the introduction of the +1 incentive on 20 November 2005 using the EMA dataset of all drugs approved since 1995. This gave another view on the issues introduced earlier in the day from Trevor Cook’s perspective as a practitioner. John framed the issue by talking about how drug repositioning offers a cheaper, faster and safer means of addressing medical issues than developing new compounds, while patent protection works much better in the pharmaceutical context for new compounds. Second-use patents are often a weak incentive because their protection is narrow and they are challenging to enforce if valid because of cross-label use. A case in point is Warner-Lambert v Generics (UK).

However, applications for second-use patents are increasing, so there must be various other incentives and efficiencies at play. When examining the data on the +1 – non-patent - incentive, it appears that there has only been a 2.6% - i.e. non-statistically significant - increase in repositioning. The change in the number of times each drug was repositioned was also not statistically significant. However, some drugs have been repositioned many times, such as Humira at 23 times – and an overall rate of ~45% of drugs being repositioned. It may be that off-label use is a factor which disincentivises formal repositioning.

Reforming the repositioning incentive is one option, such as adopting the US +3 system. However, John argued that because rates of repositioning have remained fairly stable before and after the introduction of the +1, it’s arguable that the +1 system itself gives a windfall to companies which would have repositioned the drugs anyway. Policy changes should rely on cogent evidence of cost-effective incentivisation of innovation, so it doesn’t appear that an increase in the term of protection would be merited at this time; equally, repealing the +1 would be an option only if we could work out how much it would cost and confirm that it is not spurring innovation at the moment.

Lord Justice Arnold observed that, in relation to Warner-Lambert, we should avoid drawing conclusions from strategically poor litigation choices – as they may have succeeded in a narrower claim to peripheral neuropathic pain had it been tried at trial. All three courts which heard the case agreed there could be a valid second medical use for inflammatory pain, so it doesn’t indicate that such patents are invalid.

Finally, John argued in favour of getting more creative overall with incentives, and to keep in mind that big macro-variables are also at play, such as the impact of the global financial crisis on pharmaceutical research.

Wolf Sauter and Lord Justice Arnold in discussion

The final topic of the day was Global Health, Alternatives to IP, Concluding Talk & Discussion with the penultimate presentation from Wolf Sauter (Free University of Amsterdam) in his academic capacity (rather than officially representing his regulatory perspective from the Netherlands’ Authority for Consumers and Markets). He gave an overview of a recent practical paper, ‘Reconciling competition and IP law: patented pharmaceuticals and dominance abuse’¸ from the Dutch insurance-based healthcare system’s perspective. In the Netherlands, other forms of care are financially crowded-out because of the high cost of drugs to insurers. One solution to such issues could come from the potential interface between IP and competition rules which currently apply in parallel. 

He recalled the recent Generics case as a welcome instance of anti- and pro-competitive effects being balanced, as assessing e.g. a breach of Article 102 TFEU (abuse of a dominant position) can be particularly difficult in the pharmaceutical context. For instance, the methodology of determining what a ‘fair price’ is messy, difficult, and resource-intensive for regulators, as well as engaging ideological market regulation arguments.

Reconciling competition and IP law must take incentives to innovate into account, such as in excessive pricing cases like Pfizer/Flynn, which Chris Stothers talked about earlier in the day. This includes a whole range of subsidiary factors like market definition and dominance, the fragmented market power of Dutch insurers as purchasers compared to national health systems with public price intervention, whether pharmacy preparation should be seen as substitutable, and whether off-label use is part of the market. The promotion of market competition by means of joint purchasing initiatives or international collaboration appears merely aspirational at present. However, the Netherlands should not be afraid of closing some loopholes such as the orphan regime criteria, or indeed opening some others such as endorsing pharmacy preparation. In any case, regulators must at least try to enforce competition law while taking innovation into account, not least to develop greater experience.

Lastly, in response to an audience question, he explained the European Competition Network framework and suggested that the Commission allows the Netherlands to take innovative competition regulation approaches due to its relatively small size. It can therefore serve as a form of prototype for other Member States, while also having its own characteristics such as a lack of a domestic pharmaceutical manufacturing industry and the effects of the single point of entry to a reimbursement system.

Rochelle C. Dreyfuss (NYU) gave the concluding remarks for the day, considering how the IP system should be fine-tuned to ensure public access. While it may be tempting to go to inventive step for reform, as the tap turning the stream of patents on and off, it also defines the relationship between generations of innovators so should be treated carefully. She then moved to summarising and commenting on the earlier presentations, including giving a US perspective on regulatory issues such as balancing benefits to US consumers with harms to the countries of origin in parallel import cases. Similarly, she indicated in relation to Aboy’s presentation on US case law that the balance between proprietary and access interests in the patent system is distorted. Solutions to problems like these – and the incentivisation of treatments which are not likely to be profitable – must be imaginative and recognise that the money that comes from IPRs is not the sole factor in driving innovation. She then gave the example of the WHO’s FluNet as an instance of international collaboration between private enterprise, government and charities which bears potential to be encouraged.

Following the presentations, Lord Justice Arnold sparked a discussion on compulsory licensing and tailored remedies, noting that eBay v MercExchange essentially introduces de facto compulsory licensing. He gave the example of a tailored injunction he had imposed in Edwards v Boston Scientific, where the IPR specifically had to be balanced against the right to life of patients for whom the infringing device was the only suitable treatment. By contrast, a Swiss court deciding the same issue rejected that approach.

Rochelle responded that the incentives are different for medical devices to drugs, because companies don’t want to launch a new drug in the absence of an injunction against a future infringing market entrant. Assessing compulsory licensing is a hard question which intersects with other topics of discussion throughout the day such as the right-holder’s consent requirement for parallel imports and exhaustion. Prof. Sauter then gave a competition perspective on these issues, saying that compulsory licensing could be used as a competition remedy independently from and in parallel to TRIPS provisions.

The last strand of discussion turned back to the conference topic, including whether ‘good for our health’ means ‘achieving fair returns for pharmaceutical companies’. A suggestion of FRAND-style provisions was not especially popular in the room, and one audience perspective from a non-pharma patent attorney was that changing the patent system to better-accommodate pharmaceutical products risks unacceptably distorting the system for all other inventions. Another suggestion was that an entirely parallel pharmaceutical patent system should be created – with the conclusion being that while a variety of possible solutions are available, simply convincing industry, practitioners and government of any need for change is one of the biggest hurdles.

With thanks to Dr John Liddicoat for photos of the conference and to Dr Kathy Liddell for those of her cats!