otto licks lesi 2013 rio de janeiro - pharma compulsory license in brazil
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© 2013 Licks Attorneys
Prepared by Otto Licks
Compulsory Licensing in Pharma The Brazilian Perspective LESI Annual Conference 2013 April 9th, 2013, Rio de Janeiro
The Brazilian pharma market
Patent exclusive rights and limitations
Definition of compulsory license
Seven provisions for compulsory license
Dispute DS199 – Interpretation of Article 68
Compulsory license for Merck’s patents covering efavirenz
Licks Attorneys is a team of lawyers, pharmacists and patent agents that are fully licensed and accredited before the Brazilian Bar Association as well as the National Institute of Industrial Property – INPI, the Brazilian PTO. We also represent clients before the Brazilian Food and Drug Agency – ANVISA, the Brazilian Telecom agency – ANATEL, and the Brazilian Customs Authority SRF. We offer decades of combined experience within the full range of intellectual property, telecom and food & drug law services.
We use technological savvy and international proficiency to offer fresh perspectives. Licks Attorneys has some of the most highly acclaimed lawyers in Brazil who have received national and international awards such as the most admired Brazilian IP Lawyer in 2011 and recognition from Chambers Latin America. Team members have been named as highly recommended attorneys in the IP and Life Sciences areas for the last seven years.
Over the past several years, our team has been among the visionaries who have presented challenges to established Brazilian intellectual property, telecom and food & drug laws, being instrumental to forging improvements to these legal regimes.
Licks Attorneys is a Brazilian-based law firm with the background, experience and technological capabilities to provide comprehensive legal counsel, prosecution and litigation services to companies of all sizes.
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The Brazilian Pharma market 1
Brazil is the 6th biggest pharmaceutical market USD 28,46 billion, USD 8,3 billion OTC with av. 23% growth (IMS 2012).
The Brazilian government spent USD 77 billion in healthcare to attend 75% of the Brazilian population, while USD 86 billion were spent by private sector for 25% of the population.
In Brazil there is no co-payment system.
Patients either pay in full or do not pay at all.
In the private sector the healthcare plans and insurances will usually reimburse the price of the least expensive copy.
Doctors in the public sector have no freedom to prescribe a specific drug. All the prescriptions need to use the Brazilian common denomination (DCB), which is the generic names of the active principle ingredient.
Article 3 of Statute #9,787 of 1999 establishes that all prescriptions provided at Public facilities and all acquisition of drugs performed by the government and its facilities must follow the DCB generic names.
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The Brazilian Pharma market 2
Brazil’s government subsidizes most of the biological products through the programs of the Ministry of Health. It represents a significant portion of the budget for the health sector.
While biological products represent only 2% of all drugs distributed by the government, they represent 41% of the total spent annually by the Ministry of Health on medicines.
Monoclonal antibodies, despite representing 1% of all biological products distributed through the Government, use 32% of the total spent by the government on these products.
The government buys drugs by the active ingredient name and does not make any differentiation between new drugs and generics. Biologicals follow the same rules.
Since 1989, Brazil is granting MA for biosimilars. One example is the copy of humulin granted as a regular small molecule drug. Brazil is investing in a partnership with countries like Cuba to produce Interferon.
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The Brazilian government’s interfaces with the pharmaceutical sector
Patents, utility models, industrial designs and trademarks Brazilian Patent and Trademark Office (BRPTO), National Institute of Industrial Property (INPI)
Prior approval for patents claiming pharmaceutical inventions (article 229-C) Brazilian Food and Drug Administration (ANVISA)
Major pharma client and healthcare provider Brazilian Government, MoH, States, municipalities
Local Competition 21 state-owned pharmaceutical industries
Regulatory agency , Pharmacovigilance police and consumer protection Brazilian Food and Drug Administration (ANVISA)
Industrial, innovation and health policy Ministry of Health and its institutions (Fiocruz, etc)
Price control Interagency board (CMED)
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The different marketing approvals in Brazil for small molecules
The Brazilian Food and Drug Statute (BFDA Statute #6,360 of 1976) establishes three types of marketing approvals (MAs) in addition to vaccines and biologicals (Amoxicillin used as an example).
New drug (NDA)
GSK’s Amoxil®
Local and government non-interchangeable
branded copy “similar”
65 marketing approvals with trademarks
Local and foreign generic
88 marketing approvals
Compounding pharmacies
Hundreds, no need of marketing approval
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The Brazilian legislation does not use the term ‘biosimilars’. (Recombinant human growth hormone (Saizen®) used as an example).
New biological
product
Merck S/A
Saizen®
Follow-on biological product
six marketing approvals for non-interchangeable branded copies
The different marketing approvals in Brazil for biologicals
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Intellectual Property Landscape What types of patents can be obtained in Brazil
Brazil is an original signatory of the Paris Convention and PCT.
Brazil is a founding member of the United Nations, OAS, GATT, WTO.
Patent protection available in the recent past
1) WTO TRIPS Exclusive Market Rights (EMRs);
2) WTO TRIPS Mailbox protection;
3) Pipeline patents (revalidation).
Patent protection available today
1) Utility patents for both products (product by process, etc) and process (methods, Swiss type claims, etc);
2) Utility Models; and
3) Certificates of Addition.
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Patent exclusive rights
The author of an invention or of an utility model will be assured the right to obtain a patent that guarantees to him the property, under the terms established by the law. (Article 6)
A patent grants to its owner the right to prevent third parties from manufacturing, using, offering for sale, selling or importing for such purposes without his consent: A product that is the subject of a patent; A process, or product directly obtained by a patented process. (Article 42, I and II)
The patentee is further guaranteed the right to prevent third parties from contributing to the practice by other parties of the acts. (Article 42,§1)
Patent limitations - the right to exclude others does not apply to acts carried
1) By unauthorized third parties relating to the patented invention exclusively to produce information, data and test results to seek market approval in Brazil or abroad, in order to exploit or commercialize the patented product after the term has expired. (Article 43, VII – regulatory review exception, or “Bolar” Exemption)
2) To the preparation of a medicine according to a medical prescription for individual cases, executed by a qualified professional, as well as to a medicine thus prepared; (Article 43, III)
Patent Statute #9,279 of 1996, as amended Patent exclusive rights and limitations
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Patent limitations - the right to exclude others does not apply to acts carried
To the preparation of a medicine according to a medical prescription for individual cases, executed by a qualified professional, as well as to a medicine thus prepared; (Article 43, III)
Patent Statute #9,279 of 1996, as amended Patent rights limitations – (compounding pharmacies)
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Compulsory license in pharma Definition according to WTO Secretariat
“Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. It is one of the flexibilities included in the WTO’s agreement on intellectual property — the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement.
“In current public discussion, this is usually associated with pharmaceuticals, but it could also apply to patents in any field. The agreement allows compulsory licensing as part of the agreement’s overall attempt to strike a balance between promoting access to existing drugs and promoting research and development into new drugs.
Term “compulsory licensing” does not appear in the TRIPS Agreement. Instead, the phrase “other use without authorization of the right holder” appears in the title of Article 31. Compulsory licensing is only part of this since “other use” includes use by governments for their own purposes.”
The Brazilian Government and legislation uses the term “compulsory license” for all “government use without authorization of the right holder”.
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Compulsory license in the Brazilian pharma landscape Eight different patent “compulsory licenses” and beyond
Articles 68 and 70 of Patent Statute #9,279 of 1996 provide five possibilities for competitors to seek a compulsory license. These possibilities require an administrative procedure filed by the private part before the BRPTO. The BRPTO has never granted a compulsory license under these provisions.
Article 71 of Statute #9,279 of 1996 provides two possibilities of government use without authorization of the right holder. These provisions can only be pursued by the Government. Decree #3,201 of 1999, as amended by Decree 4.840 of 2003, was used to compulsory license Merck’s patents covering Stocrin (efavirenz) represents the only case of compulsory license.
Statute #12,270 of 2010 establishes an eighth possibility of compulsory license and/or government use, this time as a trade sanction. Article 2, IV, g of mentioned statute allows the Brazilian Council of Ministers of the Board of Foreign Trade (CAMEX) to license a patent in case of noncompliance, by a member, with WTO obligations.
Supplement Facts
Limitation of exclusive rights 1
Patent Compulsory Licenses 5
Regulatory Data Protection 2
Government Use 2
Trade Sanctions 1
Copyright Zero
PHARMA COMPULSORY LICENSE
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Compulsory license in pharma What rights can be licensed
Compulsory license of data package
Article 8 of Statute #10,603 of 2002 provides two possibilities for compulsory license of agrochemicals: public interest and abuse of economic power.
In spite of the fact that such provision is applicable to agrochemicals and veterinarian products, a decision rendered by the Federal District Court in 2009 analogically applied Statute #10,603 of 2002 in order to limit the protection of a pharmaceutical product for human use.
Article 2, IV, f of Statute #12,270 of 2010 allows the Brazilian Chamber of Commerce (CAMEX) to license any undisclosed information in case of noncompliance with the WTO obligations, as a trade sanctions.
Compulsory license of copyrights
The Brazilian law does not provide any possibility of compulsory license for copyrights of the patient information leaflet. This is a major tool in the fight against substandard drugs.
Copyright law afford protection to patient information leaflet, which is enforced by Brazilian courts. The Brazilian Supreme Court in 1979 upheld the copyright protection to the leaflet and pamphlet with product information. (Extraordinary Appeal #88.705).
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There are five possibilities for competitors to seek a compulsory license (Article 68 and 70 of Patent Statute #9,279/96), which requires an administrative procedure before the BRPTO:
1) Exercise of patent rights in an abusive manner; (Article 68, caput)
2) Practice of abuse of economic power; (Article 68, caput)
3) Non-exploitation of the subject matter of the patent, by lack of manufacture or incomplete manufacture of the independent claims (local working); (Article 68, I)
4) Supply that does not meet the needs of the market ; (Article 68, II)
5) A situation of dependency of one patent on another, also that the subject matter of the dependent patent constitutes a substantial technical advance in relation to the earlier patent; and that both patentees do not come to an agreement for the exploitation of the earlier patent. (Article 70, I, II and III). A dependent patent is considered to be one that the exploitation of which depends on the use of the subject matter of the earlier patent. (Article 70, §1)
Patent Statute #9,279, of 1996, as amended Compulsory license
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Currently, the request for compulsory license by the interested private part is filed before the BPTO through a petition related to the transference of technology.
Documents justifying the request for compulsory license must be filed with the request showing:
1) A market research proving the lack of exploitation of the patent;
2) The interest on the patent and the technical capability;
3) Ability to explore the patent and a statement that a request for a voluntary license was rejected by the patent owner.
After the publication of the request (office action #998 of the Industrial Property Gazette), the patent owner has a 60-days term to present a brief replying or accepting the request. After this the BPTO has a 30-days term to decide the request.
The compulsory license (office action #350) can be administratively challenged by the patent owner through an administrative appeal.
The final administrative decision can be challenged by the patent owner before federal courts.
Patent Statute #9,279, of 1996, as amended Compulsory license
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In addition to the five possibilities given to private parties to seek a compulsory license, there are two provisions granting discretion to the Government to issue a compulsory license, under Article 71:
1) In cases of national emergency; (Article 71, caput)
2) Public interest for public non-commercial use, declared in an act of the Federal Executive Authorities. (Article 71, caput)
In both cases its mandatory
a declaration by the Government, insofar as the patentee or his licensee does not meet such necessity,
a temporary ex officio non-exclusive compulsory license for the exploitation of the patent may be granted,
without prejudice to the rights of the respective patentee. (Article 71).
Patent Statute #9,279, of 1996, as amended Government use of a patent without the authorization
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Complaint filed by the United States on May 30, 2000, requesting consultations with Brazil in respect of those provisions of Brazilian Patent Statute, which establish a “local working” requirement.
US asserted that the “local working” requirement of the Brazilian law could only be satisfied by the local production — and not the importation — of the patented subject-matter. More specifically, the US noted that Brazil’s “local working” requirement stipulates that a patent shall be subject to compulsory licensing if the subject-matter of the patent is not “worked” in the territory of Brazil.
The US further noted that Brazil explicitly defines “failure to be worked” as “failure to manufacture or incomplete manufacture of the product” or “failure to make full use of the patented process”.
On 5 July 2001, the parties to the dispute informed WTO regarding solution on the matter:
The U.S. withdrew the WTO panel against Brazil concerning the interpretation of Article 68 and the Brazilian Government agreed that in the event it deems necessary to apply Article 68 to grant compulsory license on patents held by the U.S. companies, to establish prior talks on the matter with the U.S. Government.
These talks would be held within the scope of the U.S. – Brazil Consultative Mechanism, in a special session scheduled to discuss the subject.
The WTO dispute – US v. Brazil Dispute DS199 – Interpretation of Article 68
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Decree #3,201 of 1999, implements Article 71 of the Patent Statute:
“In cases of national emergency or public interest, declared in an act of the Federal Executive Authorities, insofar as the patentee or his licensee does not meet such necessity, a temporary ex officio non-exclusive compulsory license for the exploitation of the patent may be granted, without prejudice to the rights of the respective patentee.
Sole Paragraph - The act of grant of the license will establish its term of validity and the possibility of extension. “
Public interest is defined as facts relating – among others – to public health, nutrition, protection of environment, as well as those of importance to the technological, social or economic development.
The Decree covers patents claiming any art. The only objective requirement establishes that, prior to granting a compulsory license, the Government has to establish that the patent owner or licensee is not capable of meeting the public demands.
National emergency is defined as impending danger to the public, even if in a limited area.
Patent owner might be required to teach trade secrets and oversee production and commercial aspects. (article 5, III of Decree #3,201)
Presidential Decree #3,201 of October, 6th 1999 on article 71 of Statute #9,279 of 1996
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On May 4th, 2007, the Brazilian government issued Decree #6,108 establishing a five years non exclusive compulsory license of Merck’s patents PI1100250-6 and PI9608839-7 covering Stocrin (efavirenz, MSD®), both registered at ANVISA, for public non-commercial use.
Royalties were established in 1,5% of the price.
On May 4th, 2012, President Dilma Rousseff issued Decree #7,723 extending the compulsory license for five more years, in light of public interest, for both patents.
PI1100250-6 is valid until April 9th, 2017 and PI9608839-7 is valid until May 21th, 2016.
Presidential Decree #6,107 of 1999 “Breaking” Patents PI1100250-6 and PI9608839-7
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Statute #12,270 of 2010 was created after the dispute between Brazil and the US before the WTO: “United States – Subsidies on Upland Cotton”.
The Statute establishes retaliation measures on several intellectual property rights such as: suspension of intellectual property rights; limitation of intellectual property rights; changing requirements for the implementation of intellectual property rights protection; changing requirements for obtaining and maintaining intellectual property rights; temporarily blocking of royalties remittance or compensation based on the license of intellectual property rights; applying commercial rights on the remuneration due to the holder of intellectual property rights. (Article 3)
In addition to the seven possibilities already mentioned, Provisional Measure #482 of 2009, converted on Statute #12,270 of 2010 established an eighth provision for the granting of a compulsory license:
“This Statute provides for measures to suspend concessions or other obligations of the country on intellectual property rights and others, in cases of breach of multilateral obligations for Member of the World Trade Organization - WTO, when the Federative Republic of Brazil has been authorized by the Dispute Settlement WTO to suspend the application to that State, concessions or other obligations under the WTO Agreements.” (Article 1)
Statute #12,270 of 2010 Compulsory license for trade sanctions
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The terms of the Statute may only be applied against applicants, holders or licensees of intellectual property rights which are (Article 5):
1) Citizens of Member of the WTO, or people based on its territory;
2) Companies based or established in the WTO member country.
The terms of the Statute may be applied individually or cumulatively, as approved by Resolution of the Council of Ministers of the Board of Foreign Trade, CAMEX in the following ways (Article 6):
1) Postponing the beginning of the enforcement of intellectual property rights to a date to be defined by the executive branch, consequently reducing the term of protection for pending intellectual property applications;
2) Reducing the term of protection, for a specified period, while it is in force;
3) Licensing or non-commercial public use, without authorization of the holder;
4) Suspension of the exclusive right to prevent imports and marketing in the domestic market for goods protected by patent rights, even if the imported goods has not been placed in the external market directly by the holder of intellectual property rights or with his consent;
Statute #12,270 of 2010 The eighth provision for compulsory licenses
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During the term and limits established for the application of any measures provided in the Statute, will be suspended for parties mentioned on Article 5 (Article 8):
The rights to be beneficiaries or applicants for protection against unfair commercial use of information concerning the results of tests or other undisclosed data submitted to the competent authorities as a condition to approve or to maintain the marketing approval of products. Article 8, III):
The measures provided in the Statute does not implies on any compensation for the exercise of rights by third parties, except in the case of licensing or public non-paid commercial use without permission of the owner. (Article 8, sole§)
Statute #12,270 of 2010 The eighth provision for compulsory licenses
