[author: Juan Luis Serrano*]

In the first three installments of this series, we've explained the general purpose of the study, and gone through the sections of patents, marketing authorizations and strategic behavior of the study published on August 9, 2017 by the Federal Commission for Economic Competition[1].  For this fourth installment, we'll go through the first eight recommendations that COFECE issues to provide better conditions for generic drug competitions.

For the purposes of this series, we'll refer to Mexican authorities by their acronyms; COFECE for the antitrust body, COFEPRIS for the regulatory authority, and IMPI for the patent office.

Let's review the main contents of each recommendation by COFECE.

"1. COFEPRIS should specify, in the list of reference drugs, the specific patents covering the drug and their expiry date, in order to provide transparency to the linkage and patent protection system.  COFEPRIS can create this list with information on patents to be provided by IMPI through a government offices inquiry."

I consider that the idea here is correct, but it's missing a) the involvement by the patent holder, to tell the government precisely which patents are relevant to an approved reference drug, and b) a possibility for both the patent holder and the generic drug applicant to be heard on the possible invasion/invalidity of patent rights during the marketing authorization proceeding.

An analysis could also be made on whether our Country should provide an incentive to the generic applicant to initiate an invalidity action, such as the 6-month period granted in the U.S.

"2. IMPI and the Ministry of health should jointly evaluate the convenience of including in the Industrial Property Law regulations a limitation on the granting of secondary patents, as has been done in other countries.

This recommendation substitutes those which are meant to provide transparency to the linkage system, and it may end up being redundant if the linkage system is improved".

This recommendation seems to need a lot more work in order to be duly supported; whereas it is correct that some countries have indeed limited the patentability of some inventions, this should be done not just as an isolated decision, but as a full policy analysis on incentives to innovate versus generic drug competition.

In addition, I do not agree with the argument of this recommendation being "substitute" of transparency in a linkage system.  Said transparency is necessary regardless of patentability standards, and the recommendation to limit certain patents would have a bigger impact on entry times for competing products, for obvious reasons.

"3. Establish explicit restrictions to the linkage system in order for patents registered (sic) after the marketing authorization for a reference product is granted will not be considered for linkage analysis for the same reference product.

This does not limit laboratories from using their patents - granted after the reference product marketing authorization has been approved - to develop second generation, or other types of drugs."

The proposed restrictions have some sense to them, when one considers that drugs in the reference product list are the benchmark for generics to imitate.  It would be necessary however, to determine the situation with patent applications filed before the reference product designation, but granted afterwards.

"4. COFEPRIS should grant a new marketing authorization when a laboratory requests the modification of an authorization for a reference drug, based on a marginal improvement which is associated with a new patent, that will expire after those patents granted when the initial authorization was issued.

The registration of the original reference product would stay in force after patent expiration, in order for generic products to use it as reference.

The purpose of this proposal is to prevent marginal innovations over a reference drug with a patent close to expiration to create an obstacle to the entry of generic products which reference the original drug, as said innovations are commonly associated to the registration (sic) of new patents".

The main problem with this recommendation is the term "marginal innovations", which is not defined, and will certainly be seen as negative by patent holders.  Otherwise, the idea of having more than one reference product makes sense as patent infringement situations would be avoided.

"5. COFEPRIS should promote the use of the Bolar exception through the publication of rules and criteria under which it can be requested, and periodically publish the list of innovative drugs for which patents will expire in the following 3 years."

This is a clear reference to the orange book rules, which allow a generic drug applicant to request "paragraph III certifications" for marketing authorizations to be issued right after patent expiration.  This seems to be a positive policy recommendation.

"6. COFEPRIS should finish completing the database of marketing authorizations and make it available online, to the public, with information beyond five years, and to keep said database updated.  The database must include public information on consultations to IMPI and response times by COFEPRIS.

This information will provide transparency to the process of market entry, and will remove discretional spaces which may provide incentives for unnecessary entry obstacles."

This is a welcome recommendation, which has been expressed before COFEPRIS by both innovator and generic drug companies.  The database has not been updated in years, and the current situation forces companies to go through transparency requirements which can take 2 months before a response is issued.

"7. COFEPRIS should guarantee and communicate that the process of marketing authorization is done in a first in – first out basis, and not accumulate the issuance of the authorizations in packages or batches.

This mechanism looks to benefit the laboratory that filed an earlier application, which constitutes an incentive to take advantage by having market presence.  The current strategy by COFEPRIS is the announcement of release of marketing authorizations in "package" forms, which does not generate adequate incentives for generic manufacturers to take a lead over competitors upon filing."

This recommendation makes a lot of sense.  The marketing authorizations should be issued as soon as they are ready, and the current practice could be substituted with announcement of those authorizations issued in the previous semester/year.

"8. COFEPRIS should issue technical criteria for the consideration that the generation of clinical data by an applicant represents "considerable effort."

This measure seeks to close the door on litigation generated on alleged violations to clinical data protection.

This recommendation appears to oversimplify a complex issue, which derives from international treaty obligations and which is not properly regulated in our laws.

Currently, as mentioned in the study, clinical data protection is established as an obligation in NAFTA and TRIPS.  COFEPRIS issued an internal memorandum in 2012 which refers to this form of protection, but that document does not constitute a mandate and is certainly not the proper way to regulate a granted right.

On the "considerable effort" side, there are varying positions in other countries:  In broad terms, the U.S., Canada and Europe consider that simply by obtaining a new drug product registration considerable effort was present in the clinical trials process.  In contrast, countries such as Colombia have tried to establish criteria (such as the amount of money spent) to determine if the effort was indeed considerable and thus if it merits protection.

I think that the study addresses the problem from the wrong angle.  If the intention is to avert litigation proceedings, transparency on specific periods of protection for all interested parties will do more than a high or low bar on what is considerable effort.

In Parts V and VI of the series on the COFECE study, we will analyze the sections on "insufficient response from the demand side" which refers to information available to physicians and patients and "Entry of generic drugs to public procurement processes".

* Mr. Serrano is Of Counsel with ROMO DE VIVAR V.IP SERVICES, S.C.