Intellectual Property Rights Infringements during the Life cycle of Medicines

Illya P. Kostin, Mariya V. Smytok

The pharmaceutical sector is extremely specific, since drugs are socially significant products characterized by their low elasticity of demand.

Only a small percentage of business areas are faced with the impact of the state in the domain of the production and sale of drugs. This impact is primarily seen in the huge number of regulatory procedures and increasing pressure from central executive authorities.

In some cases, such state policy is due to the crucial social importance of drugs, but often the conditions imposed by public authorities are quite stringent and restrict the freedom of the subjects of pharmaceutical market to such an extent that it leads to much more significant negative consequences than those that the state sought to prevent when imposing such conditions.

It is necessary to maintain a balance of interests between the state, business entities operating in this market, and citizens acting as end-users of drugs, and not to forget that in the end, the welfare and safety of others depend on the stable position of each of the above subjects.

Due to the rapid development of the pharmaceutical industry in general and competition between the “characters involved”, i.e. the manufacturers of drugs, which gradually is becoming stronger and more intense, the rules of the game in the pharmaceutical market are getting tougher every day.

Under circumstances where the state is strengthening its influence, acting under the slogan of “no holds barred”, pharmaceutical companies, continuing to fight for their consumer, are searching for the answer to the question: “Is there anything left not forbidden by law?”

Therefore, let us consider, what means are “good” and what is prohibited by law.

The summer of 2012 was marked by the adoption of a few regulatory acts crucial for the pharmaceutical field. The significance of these acts has become critical for many major manufacturers of drugs, both foreign and domestic, since it has had a direct impact on the exercise by the latter of their activities.

In particular, adoption of the above acts resulted in the emergence of fundamentally new rules of marketing in the field of drugs circulation, restrictions of cooperation of pharmaceutical companies with physicians, medical representatives and consumers of drugs.

Thus, on 6 June 2012 the Ministry of Health of Ukraine issued Decree No.422 On Certain Issues as regards Banning Advertisement of Drugs. This Decree approved the Criteria used to specify what drugs are banned from being advertised.

The decision on banning advertisement of a drug shall be made by the Ministry of Health of Ukraine based on the recommendations by the State Expert Center, provided that at least one of the following conditions is observed:

— The drug is sold by prescription only.

— The drug contains narcotic and psychotropic substances, and precursors.

— The use of the drug may cause the drug addiction syndrome, as indicated in the instructions for medical use, except for the drugs for external (local) application.

— The drug is used exclusively for the treatment of women during pregnancy and lactation.

— The drug is used exclusively for the treatment of children under 12 years.

— The drug is used for treatment of:

— tuberculosis;

— sexually transmitted diseases;

— particularly infectious diseases;

— HIV / AIDS;

— cancer and other malignant diseases;

— chronic insomnia;

— diabetes;

— obesity (including drugs used for weight loss);

— impotence (erectile dysfunction).

In total, 326 varieties of drugs sold without a prescription have been included in this list as banned from being advertised, since the Ministry believes that they fall under the above conditions.

Moreover, it should be noted that the possibilities of “permissible” advertising are not limitless, and that it is also under state control, though justified control.

In particular, the Antimonopoly Committee of Ukraine has already paid close attention to the advertising slogans of some drugs manufacturers.

On 4 July 2012 parliamentarians adopted the On Amending Basic Legislation of Ukraine in the Domain of Health Care as Regards Restrictions in the Professional Activities of Medical and Pharmaceutical Workers Act of Ukraine No.5036.

Having adopted the above Act, the Verkhovna Rada of Ukraine decided to supplement Section X of the Basic legislation of Ukraine in the domain of health care with Article 78-1 containing restrictions as regards the professional activities of medical and pharmaceutical workers, restrictions on which had not been previously established in the history of Ukrainian law-making.

For instance, in the course of exercising their professional activities, medical and pharmaceutical workers are not entitled to obtain samples of drugs and medical devices for the use thereof in professional activities; to advertise drugs and medical devices, etc.

Therefore, advertising and promotion are restricted to the maximum extent.

Under these conditions, the old, proven and efficient mechanism of competition, promotion of own products and creation of obstacles for competitors, such as the use of intellectual property objects, becomes effective and feasible.

Mechanisms of protection of intellectual property rights are efficient when dealing with both innovative drugs and generics. However, in the case of generics, it is a bit unusual, can there be any innovation when talking of generics?

Certainly, apart from brand and trademark protection, innovative drugs are also characterized by patent protection of substance, composition, methods of obtaining and applying, and data exclusivity. Are generic copies characterized by nothing of the kind? No at all. One and the same substance can be characterized by a huge number of methods of synthesis and purification; one and the same composition can be obtained (purified, crystallized) in various ways, just as a chess game can have a lot of moves and combinations.

Moreover, these mechanisms apply for both prescription and non-prescription drugs. In the case of prescription drugs, trademarks are not essential, while patents are a key component of intellectual property, which enables effective maintenance of competition.

In the case of non-prescription drugs, the role of a trademark increases significantly, as a patient gets more freedom in choosing a brand, a trademark, and a country of origin.

The mechanisms of intellectual property protection will also affect clinical sales, despite the fact that a patient’s choice is almost totally dependent on a doctor’s decision. However, the latter can, in his turn, neither buy counterfeit drugs nor buy them in violation of a trademark or a patent.

The Patent office and commercial providers of patent and information services are occupied with promoting their commercial success more than with eliminating the deficiencies of information support of the market.

A patent office uses at least three sources of information for each type of intellectual property, which requires a lot of effort from the user during the search and analysis of results; besides, these sources cause confusion and redundancy rather than complementing each other. Commercial providers offer fragmented sets of old data, although with a convenient, modern and stylish interface.

Continuous monitoring of intellectual property rights enables the timely detection and prevention of violations.

Experts in intellectual property develop different systems that perform the function of monitoring intellectual property in the spheres of industry, including pharmaceutical, veterinary medicine, plant protection and biotechnology.

Such systems enable detection violations of intellectual property rights at the stage of filing an application for registration of drugs with the State Expert Center of the Ministry of Health of Ukraine, and to conduct regular monitoring of intellectual property rights.

The point is that when applying for drug registration, the applicant submits basic bibliographic information related to the drug. That is, trade name, active ingredient, international non-proprietary name for pharmaceutical substances (INN), recommended by the World Health Organization on the basis of the resolution WHA 3.11 “On non-proprietary names for pharmaceutical substances” of 1950.

The INN is recognized worldwide and is in the public domain; any subject in the sphere of circulation of medicines worldwide can obtain INN from the WHO without any restrictions.

All these facts are first automatically collected and analyzed together with the objects of intellectual property stored in databases of monitoring systems; after that, at the confluence of several key factors, the system reports a possible violation of the client’s intellectual property rights.

Participants of the pharmaceutical industry have the possibility to control the observance of their intellectual property rights in an efficient, available and timely manner, and to detect violations at the stage of the examination of the effectiveness, safety and quality of the drug whose registration is being applied for.

The latest amendments to Article 9 of the On Drugs Act of Ukraine, the Resolution by the Cabinet of Ministers of Ukraine of 26 May 2005 No.376 On Approval of the Procedure for the State Registration (re-registration) of Drugs and the Fees for the State Registration (re-registration) Thereof enable the prevention of drug registration.

Besides, intellectual property monitoring systems enable effective analysis of patent clearance of new products at the stage of preparation for the launch of the products to the market, and to determine the exact date of the “safe launch” of generic drugs.