EC Pharmaceutical Sector Inquiry Earns Critical Industry Response

EC Pharmaceutical Sector Inquiry Earns Critical Industry Response

Industry responses to the European Commission (EC) preliminary report on pharmaceutical competition (see the IPilogue blog of Dec. 15, 2008) are becoming available, and criticism has been abundant.  In no uncertain words professional associations are wondering aloud whether the EC properly interpreted the facts or, more generally, misconstrued the purposes of the current patent system.

The Intellectual Property Institute (IPI), an independent UK research body that addresses all aspects of intellectual property law, has suggested (in their report - available here) that the data analyses seem to have been skewed to fit preconceived theories.  One such piece of data was the fact cited in the EC report that generic companies won 71% of all patent cases initiated.  Although the EC report cites this as evidence of relative overall patent quality, the IPI doubts the soundness of this conclusion since (according to IPI) generic companies will usually litigate on the patents they perceive to be susceptible to a successful court challenge.

Another group, the Intellectual Property Lawyers’ Association (IPLA) emphasized in their report the symbiotic relationship between originator and generic pharmaceutical companies who both have an interest in the continued development of new products by originators.  As such, patents for “incremental” innovation can be at least as valuable to society as those covering the original molecules, and should not be considered of dubious value on the basis only of their incremental improvements.

IPLA also considered the topic of ever-greening, saying, “if a competitor adopts a business model whereby it chooses not to compete in certain ways, for example by not engaging in marketing activities, but relies instead upon the marketing activities of the originator companies, does this require the originator company itself to limit its activities so as not to take advantage of the shortcomings of its competitors’ business models?” (at page 10)  This is a relevant question – who are we to say how companies should compete in the open market?  As IPLA properly points out, if an innovator refocuses its efforts on an improved version of an older product, isn’t that something for consideration by the relevant national authorities when determining reimbursement and the appropriate physicians when prescribing?

The Chartered Institute of Patent Attorneys (CIPA) represents patent attorneys in the UK and advocated a similar viewpoint.  CIPA’s response to the EC’s report is that product development is a continuous process in any industry and inventions will be made (and patent protection sought for those inventions) at all stages of the life cycle of a product.  If those inventions meet the criteria of patentability, the inventor is entitled to exercise her patent rights as she see fit.

The issues raised in the EC preliminary report are clearly not without debate.  Although the EC sees some practices in patent law as questionable conduct, the question remains whether this conduct should be restricted in any way.  Perhaps the final report, due to be published this Spring, will consider the perspectives highlighted by these industry reports.