Views of the European Generic Views of the European Generic Medicines Industry on the Medicines Industry on the

Regulation Proposal concerning Regulation Proposal concerning Customs Enforcement of IP RightsCustoms Enforcement of IP Rights

Lidia MalloLidia MalloEGAEGA

European Parliament, 22 November 2011European Parliament, 22 November 2011

Generic Medicines – A Highly Competitive Industry The EGA represents over 1000 companies in 34 European countries

Generic Medicines Bring Savings of

30€ Billion p.a.

in the EU 27

Generic medicines account for almost

50%

More than 1000 Generic Companies Employing

150,000Employees in Europe

One of the Most

Competitive Sectors in

Europe

of volume share and

After Patent Expiry, with

Price cuts of 30-90%

of value share

10-30

18%

companies competing on one product

Introduction

Globalization of counterfeiting and internet sales are important new challenges

EGA welcomes the fight by EC and MS Customs authorities against counterfeit products

However, wide issue of counterfeit medicines = risk of bona fide generic medicines “accidentally” detained

Regulation 1383/2003 has been– misapplied by customs authorities or/and – misused to restrict legitimate competition and

prevent free movement of goods through EU.

The Netherlands (2008): detention of medicines en route to Brazil/Colombia/Peru from India

Dr Reddy’s: Losartan Potassium

Bftalactamicos S.A: Clopidogrel

Cipla: Rivastigmine/Olanzapine

Aurobindo: Abacavir

Patent infringement in the NL: Court in the NL determined that products in transit qualify as if manufactured in the NL : the so called “manufacturing fiction”.

Diplomatic incident EU-India/Brazil

“Transit” detention cases –some controversial examples (i)

UK, Dec 2008: 2 consignments of product en route to Czech Republic from India detained by Customs at Heathrow whilst in care of transport company

Customs (apparently) acted on own initiative

Patentee informed/ Representative of patentee inspected & took samples

Goods released 7 days after detention

“Transit” detention cases –some examples (ii)

EGA views on current proposal

7

New Regulation: PREAMBLE 17 on transit

“…..In particular with regard to medicines the passage of which across this territory of the European Union, with or without transshipment, warehousing, breaking bulk, or changes in the mode or means of transport, is only a portion of a complete journey beginning and terminating beyond the territory of the Union, customs authorities should, when assessing a risk of infringement of intellectual property rights, take account of any substantial likelihood of diversion of these goods onto the market of the Union”.

8

EGA views: guidelines or extension of preamble 17?

Give clear criteria to customs officials: to determine the substantial likelihood of diversion of generic medicines on to the market of the Union, customs authorities should into account whether the addressee has:a MA for the detained medicine in this country a P&R status for the detained drug in this countryits detained medicine included in the substitution

list in this country.If these parameters are absent, there is no

substantial likelihood of diversion of the detained generic medicine into the market of the transit member state.

9

Improved definitions

The EGA welcomes distinction to keep counterfeit separate and distinct from patent infringement:

Pirated goods: copyright infringement

Counterfeit goods: trademark infringement or non authorized use of the t. mark which cannot be distinguished in its essential aspects from another t.mark

Goods suspected of infringing an IP right (i.e. patent)

In line with def. EGA promoted internationally: “Violations or disputes concerning patents must not be confused with counterfeiting of medical products”

The difference

A counterfeit “fake”Louis Vuitton hand bag is an obvious trademark infringement!

Patent infringements are not crystal clear: it can take up to 3 years to solve case & decisions can be different in each country

Should alleged patent infringers be confused with criminals i.e. pirates/counterfeiters?

IP Rights Infringement & Risk to Consumers Health

NATURE OF IP RIGHTS INFRINGEMENT

Trademark Infringement of a medicinal product

= counterfeiting:

a PUBLIC HEALTH issue!

POTENTIAL IMPLICATIONS FOR CONSUMERS HEALTH

High risk of substandard medicinal products

ILLEGAL & CRIMINAL ACTS

NO FORMAL PRODUCT REGULATORY OR QUALITY CONTROL

No TRANSPARENCY towards regulatory authorities

IP Rights Infringement & Risk to Consumers Health

NATURE OF IP RIGHTS INFRINGEMENT

Infringement of a Pharmaceutical Patent in the legal supply chain

POTENTIAL IMPLICATIONS FOR CONSUMERS

Absence of risk

FORMAL REGISTRATION & APPROVAL PROCESS

Q,S&E

–ie, REGULATED INDUSTRY SECTOR with PRODUCT QUALITY CONTROL

TRANSPARENCY

LEGITIMATE COMPETITION

COMPLEX COMMERCIAL DISPUTE eg: challenge of weak patents

IP Rights Infringement & Risk to Consumers Health

Potential infringement of patents covering various aspects of pharmaceutical products (eg, molecule, process, indication, etc.) is a commercial practice issue with no implications for consumers’ health

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Conclusion: the EGA supports

Preamble 17 + AM proposed to guide customs on likelihood of diversion into EU market

Differentiated definitions as in Art. 2Art. 16.3- Communication of intention to detain

+ right to be heard for holder and addressee of the goods before decision to detain is taken

Art. 16.4- If decision to detain is taken: communication within 1 working day to the holder/addressee .

Art. 18.2- Samples not to be taken during detentions (danger of abuse)

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EGA proposes: “in the case of perishable goods and goods of public health importance such as medicinal products, suspected of infringing an IP right, the period for initiating infringements proceedings shall be 3 days and not 10 days from decision to suspend or detain the goods”.

Medicines detained for 10 days are unlikely to be sold after release. For ex:

• Cold chain interrupted or compromised• Incompliance with GDP rules: in UK, stock can be

stored for no more than 5 days to guarantee conditions for patient

Art. 20.1: time to initiate proceedings by right holder.

Final Conclusion

The fight against counterfeiting cannot be used as an excuse to justify any detentions, seizures or destruction of legitimate generic products in transit through EU countries by customs authorities.

New Customs Regulation should focus on the real threat of copyright and trademark abuses perpetrated intentionally by criminal groups.

To achieve access to affordable generic medicines by patients worldwide, it is important to strike a proper balance between the rights of patent holder and product holder + addressee/recipient.

Thank you

www.egagenerics.com