Is Patent Linkage a Necessity or a Potential Disaster for Pharma Industry?
September 21, 2023
Patent linkage is a vital mechanism designed to protect the rights of patent holders in the pharmaceutical industry. This article aims to shed light on the concept of patent linkage and its impact on the pharmaceutical landscape. It explores the merits and demerits of the patent linkage system, highlighting the crucial role of patent linkage in achieving a delicate balance between safeguarding individual patent rights and ensuring easy access to essential medicines for the public.
The research paper compares various strategies employed worldwide by countries to implement patent linkage. Through an in-depth examination of these approaches, the article discusses the need for and rationale behind the adoption of patent linkage measures. It considers the implications of patent linkage on innovation, generic competition, and the availability of affordable medications. As the global landscape continues to evolve, the debate over the most suitable approach to patent linkage will persist.
Patent linkage is a crucial mechanism put in place to safeguard and protect the rights of patent holders. Its primary objective is to ensure that approval for the sale of generic products cannot be granted until a thorough assessment has been conducted to ascertain that the patent rights will not be infringed, invalidated, or exploited without the consent of the patent owner. This approach not only helps maintain the integrity of patent rights but also promotes a climate of certainty and clarity for both innovators and generic manufacturers.
Moreover, patent linkage plays a vital role in encouraging innovation by providing patent holders with a level of confidence that their inventions and investments will be protected from unauthorized exploitation. This, in turn, fosters an environment conducive to research and development, as innovators can be assured that their efforts will be duly rewarded and their intellectual property rights respected.
In essence, the system aims to prevent the inadvertent authorization of generic products that could potentially violate existing patents. Patent linkage is not uniformly implemented across all countries, and its presence and enforcement vary based on different legal systems and policies. Some countries have incorporated patent linkage directly into their statutory provisions, enshrining it in their patent laws or pharmaceutical regulations. On the other hand, some countries might implement patent linkage through international agreements or trade deals. Bilateral or multilateral agreements between nations can include provisions that require certain patent-related practices, such as patent linkage, to be followed when approving generic products. Countries without patent linkage might experience more robust generic competition, which can enhance access to affordable medications but may raise concerns about respecting intellectual property rights.
Understanding the Key Terms
A patent is a form of intellectual property right issued by the government, that provides the owner with an exclusive right for a designated period, thereby preventing others from utilizing the invention without authorization.
Patent linkage is a connection between the marketing approval of a generic product and the patent status of the innovator’s original product. It states that marketing approval for a generic product cannot be granted as long as the patent rights of the original product remain in effect. The patent linkage system operates under the assumption that obtaining marketing approval could potentially infringe upon existing patents. Its global impact is evident from its expanding scope and geographical reach. Developing countries are increasingly adopting patent linkage through bilateral agreements at a rapid pace.
A generic product or drug is a pharmaceutical product designed to replicate an already marketed brand-name drug in terms of dosage form, safety, strength, route of administration, quality, performance characteristics, and intended use. By ensuring these similarities, generic medicines can demonstrate bioequivalence, implying that they function in the same manner and offer equivalent clinical benefits as the original brand-name medicines.
Background of Patent Linkage
The idea of patent linkage originated from the World Trade Organization’s 1995 trade agreements, particularly the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS was established to safeguard intellectual property rights, including patents for pharmaceutical products, among WTO members. Moreover, TRIPS incorporates flexibilities to address concerns regarding patents and monopolistic pricing, with the aim of ensuringto ensure improved access to medicines for all. Numerous countries, expressed concerns that mandating patents for medicines could lead to higher prices and hinder governments’ ability to safeguard public health.
In response, the 2001 WTO Doha Declaration on the TRIPS Agreement and Public Health reaffirmed Member States’ rights to utilize TRIPS flexibilities fully, aiming to protect public health and enhance access to medicines. In recent times, certain countries, particularly prominent net exporters of intellectual property like the USA, Japan, and the European Union (EU), have actively pursued bilateral and multilateral trade agreements. These agreements incorporate intellectual property (IP) rules that surpass the requirements mandated by TRIPS.
Additionally, many countries have independently introduced TRIPS-plus IP laws, some even before the establishment of the TRIPS Agreement. Over time, scholars from various disciplines have undertaken endeavours to measure the effects of different intellectual property (IP) rules. These investigations encompass the assessment of strengthened patent protection and data exclusivity, which specifically involves safeguarding clinical drug trial data submitted to regulatory authorities for market approval. It operates to prevent generic drug companies from utilizing existing drug trial data to obtain market approval for generic medicines.
Global Perspective of Patent Linkage
United States of America
The Drug Price Competition Act and Patent Term Restoration Act of 1984 recognize patent linkage. The FDA maintains a list of approved drugs based on their standards and safety, and it will not grant permission for generic drugs if they violate the patent rights of drugs mentioned in the list. Further, a thirty-month stay is granted if the applicants are challenging the patent’s validity. The act aims to facilitate faster entry into the generic competition by granting extended patent terms for drug companies affected by clinical trials and regulatory delays and implementing a conditional linkage system for generic drug registration in the absence of patent claims.
China boasts one of the world’s most stringent patent linkage systems. To attract investments in the pharmaceutical sector, China has introduced several modifications to its patent law, including the adoption of a six-year data exclusivity term and the inclusion of patent linkage provisions in the Drug Registration Regulation in 2002.
Australia has implemented restricted patent linkage provisions to mitigate the negative impacts seen in the US, China, and Singapore concerning generics. The country emphasizes stringent regulations against ever-greening and requires drug patents to be based solely on proven therapeutic significance. Furthermore, the Australian patent linkage provision under Section 26(B) of the Therapeutic Goods Administration Act, 1989, includes a notable feature of imposing severe penalties for providing false or misleading information.
Contrary to the United States, the European Union opposes patent linkage, citing its conflict with EU regulatory law and its potential to undermine the Bolar Provision. The Bolar Provision was designed to expedite the entry of EU generic drugs into the post-patent market, ensuring the availability of affordable medications. Under the Bolar Provision, any drug manufacturer can experiment with a patented drug to gather data that may be submitted to a drug control authority.
In 2006, the Government Administrative Order in the Philippines eliminated the patent linkage system and overall intellectual property protection from the Food and Drugs Authority’s (FDAP) responsibilities. As a result, the FDAP can now accept and process product registration applications without verifying the presence of relevant patents. Even if a valid patent is brought to their attention, the FDAP is exempt from respecting such patents and can still grant marketing approval for the product. Similarly, in Indonesia and Thailand, there is no provision for patent linkage.
There is no patent linkage in India. Indian law prevents the ever-greening of patent rights, and the Drugs and Cosmetics Act, 1940 (DCA) empowers the Drug Controller General of India with the power to grant market approval to any drug. The regulatory authority has to assure that the drug is harmless, fit for consumption, and non-toxic.
Need for Patent Linkage
Streamlining Patent Disputes
Introducing a patent linkage system significantly reduces the pileup of litigation in court. This system acts as a solution for time-consuming patent disputes. It makes it clear that no marketing approval for a generic drug can be granted until the patent of the original drug expired. This will reduce the burden of the authorities in examining the relevance of patents to the drug. It further provides protection for the patent holder by prohibiting the generic drug manufacturers from filing any application for approval.
The absence of a patent linkage system has led to many generic drug manufacturing industries potentially violating patent rights. This issue is evident in legal disputes faced by Indian pharmaceutical companies, including a significant case involving Swiss pharmaceutical company Roche and Indian drug manufacturer Cipla in 2014. Roche accused Cipla of producing a generic version of the cancer drug Tarceva, infringing on its patent rights. The dispute escalated into a court battle, and in 2016, the Delhi High Court ruled in favour of Roche, affirming Cipla’s violation of Roche’s patent rights.
Fostering Innovation in the Pharmaceutical Industry
Within the realm of patent linkage, a significant advantage lies in its ability to encourage innovation among generic manufacturers. Providing certainty in the drug market, patent linkage informs applicants for generic drug licenses about relevant patents before product launches. This clarity allows generic manufacturers to navigate the competitive landscape efficiently, avoiding infringement risks and directing validity challenges more precisely. Such insight into the relevant patent landscape stimulates innovation within the generic industry, promoting research and design-around efforts. As the generic industry advances up the value chain, industrial strength and international competitiveness are enhanced, further driving progress in drug development.
Enhancing Patient Treatment
The positive impact of patent linkage extends to patients, ensuring a more stable treatment landscape. Early resolution of disputes between innovators and generics leads to reduced risk of abrupt switches between different treatments due to ongoing intellectual property battles. As disputes are resolved efficiently, patients are less likely to experience variations in side effects and efficacy, resulting in a more consistent and reliable treatment experience.
Generic medicines, while providing cost-effective alternatives, can sometimes pose higher risks of side effects compared to their original counterparts. Recent incidents of contaminated medicines and substandard drugs underscore the importance of stringent regulatory oversight to protect patient safety. Recent incidents have underscored the criticality of maintaining strict quality standards and regulatory oversight in the pharmaceutical industry. In January 2020, a tragic incident in Jammu saw 12 children losing their lives after consuming contaminated medicine containing diethylene glycol, leading to kidney poisoning. Subsequent events in March 2021 revealed lower levels of active ingredients in Nycup syrup. Additionally, in October 2022, a medical product alert by the World Health Organization linked acute kidney injury in children and 66 deaths in Gambia to contaminated products from an Indian pharmaceutical company.
These incidents highlight the potential risks associated with generic medicines, which can sometimes cause more side effects than the original medicines. Implementing patent linkage can play a significant role in mitigating such incidents. By linking the regulatory approval process for generic drugs to patent status, patent linkage ensures that generic medicines are properly regulated and meet the necessary quality standards. This can reduce the likelihood of substandard drugs entering the market, safeguarding patients from potential harm caused by poor-quality medications.
Challenges posed before Patent Linkage
Delayed Access to Affordable Medicines
The implementation of a patent linkage system can potentially lead to delayed availability of affordable generic medicines in the market. When a country enforces patent rights, it prevents other industries from producing a similar product. This restriction is lifted once the patent rights expire, allowing other manufacturers to produce the drug. Additionally, patent linkage goes a step further by preventing generic drug producers from even seeking approval until the patent expires. They can only apply for permission to market the drug after the patent has ended. If they are unable to list their product on the day the patent expires, it leads to a delay in obtaining approval. Another issue to consider is that if a patent has been granted with low quality or was not reasonably justified, this situation will hinder the production of generic drugs till the patent expires. This delay could result in restricted availability of essential medicines, potentially affecting patients’ access to life-saving treatments.
Regulatory and Legal Challenges
One of the significant challenges in implementing a patent linkage system is the limited knowledge and expertise of the drugs Controller or regulatory authority in handling complex patent validity issues. When dealing with secondary patents, regulatory authorities may encounter challenges in determining the relevance of the patent to the generic drug, especially if they lack sufficient resources for thorough analysis. This shift raises concerns about the appropriate role of regulatory agencies in handling patent disputes and potentially overburdening them with additional responsibilities. Deciding on patent matters requires specialized legal expertise that might not be within the scope of their usual operations, creating additional complexities and potential delays.
Impact on the Generic Drug Industry
The generic industries manufacture drugs with the same supplements and make them more affordable to the public. However, the introduction of the patent linkage system may force the generic drug industry to shift its focus from manufacturing generic drugs to inventing new drugs. This will further increase the cost of medicine in the pharmaceutical industry, significantly affecting the competition.
Facts: In December 2008, the Delhi High Court’s decision in Bristol-Myers Squibb Co. v. Hetero Drugs Ltd. brought attention to the issue of patent linkage in India’s pharmaceutical landscape. The plaintiff claimed an injunction order to prevent the approval of a generic drug called ‘Sprycel’ used for leukaemia.
Judgement: The court ruled that it is the responsibility of the drug control authority to determine the validity of the patent. It further clarified that seeking approval per se does not violate any patent rights of the holder. This decision was met with criticism and concern among various generic companies, as it burdened the Drugs Controller with the additional task of determining patent validity—a complex matter that is typically within the jurisdiction of patent officers or courts.
Facts: It dealt with the contentious concept of ‘patent linkage’ in India. Bayer Corporation sought to prevent the marketing approval of a generic version of its cancer drug ‘Sorafenib tosylate’ manufactured by Cipla Ltd. The dispute centred around whether the Drugs Controller should take patent rights into consideration while granting marketing approval for generic drugs.
Bayer argued in favour of patent linkage, claiming that the Drugs and Cosmetics Act (DCA) and the Patents Act provided a basis for such linkage. However, the court firmly ruled in favour of Cipla, stating that no patent linkage regime exists in India’s legal framework.
Judgement: The court clarified that the DCA primarily focuses on ensuring safety standards for drugs entering the market, while the Patents Act confers patent rights to inventors. It emphasized that the Drugs Controller is not equipped to decide on patent validity and that granting marketing approval for a patented drug does not infringe any patent rights. The court’s decision reaffirmed that patent linkage is not part of India’s current laws and rejected the notion that all generic drugs would be considered spurious if patent linkage were to be implemented.
The Roche v. Cipla saga involved a patent dispute in India. Roche, the patent holder, sued Cipla for selling a polymorph of Erlotinib Hydrochloride under the name ‘Erlocip’. The case went through a series of litigation, with Roche initially losing on interim relief due to ‘public interest’ concerns. However, the Delhi High Court later ruled in favor of Roche, upholding the validity of their patent and finding Cipla liable for infringement.
Patent linkage is a mechanism that aims to protect patents and prevent generic medicines from violating these patents. It is commonly practiced in various developed nations. However, implementing a strict patent linkage system can be challenging for developing countries. Instead, these countries can adopt alternative strategies to achieve similar outcomes while balancing the rights of patent holders and ensuring access to affordable medicines for their citizens. For instance, amending existing legislation and encouraging pharmaceutical manufacturing units to obtain quality certifications can elevate industry-wide standards and foster innovation.
Collaborative efforts between regulators and the industry can lead to a more transparent and credible drug regulatory regime aligned with global standards, benefiting both innovators and generic drug manufacturers. A balanced approach is necessary, considering both individual patent rights and the public’s right to access essential medicines. Collaboration between regulators and the industry can enhance the drug regulatory regime, making it transparent, credible, and aligned with global standards, thereby benefiting both innovators and generic drug manufacturers. The experiences of countries like the United States and Korea show that well-implemented patent linkage systems do not hinder access to generic medicines but can foster healthy competition and early resolution of patent disputes.
Tenni, B., J. Moir, H. V., Townsend, B., Kilic, B., Farrell, M., Keegel, T., & Gleeson, D. (2022). What is the impact of intellectual property rules on access to medicines? A systematic review. Globalization and Health, 18. https://doi.org/10.1186/s12992-022-00826-4 accessed on 04/08/2023
Hoen EF. The global politics of pharmaceutical monopoly power: drug patents, access, innovation and the application of the WTO Doha Declaration on TRIPS and public health. Diemen: DiemenAMB; 2009. Accessed 05/08/2023.
World Health Organization- Regional Office for South East Asia. Data exclusivity and other “trips-plus” measures 2017. accessed on 05/08/2023
State Drug Administration Regulation of China, 27 SDA Order Number 35.
Bhardwaj, Ravikant. (2013). The Impact of Patent Linkage on Marketing of Generic Drugs, Journal of Intellectual Property Rights 18, 2013 316-322. accessed on 05/03/2023
F. Hoffman-La Roche Ltd v Cipla Ltd [2008 (37) PTC 71 (Del)] Delhi High Court (2008)
Pawan Sharma. (2022, October 7). Years ago, chemical killed several kids in Gurugram, Jammu. Hindustan Times. Accessed on 04/08/2023