[author: Juan Luis Serrano*]

In the first installment of this series, we outlined the general contents of the study published on August 9, 2017 by the Federal Commission for Economic Competition[1], highlighting that the Antitrust authority is calling for an overhaul of several aspects of the drug market in Mexico to promote competition.  In this second installment, we delve into the patents and marketing authorizations sections, including the author's comments on the study's recommendations.

For the purposes of this entry, 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.

The patents section of the study (3.1), contains an explanation of the status in Mexico for patent granting, explaining that Mexico allows for several types of patents on pharmaceutical products, including those covering active ingredients and its variants, formulations, uses and processes.  This section is mostly academic, and does not require much additional comment.

This is followed by a section on drug marketing authorizations (3.2), where the first shots are fired; COFECE criticizes some of the positions taken by COFEPRIS, such as forming "generic approval packages" (several approvals are issued in bulk, along with a press conference, instead of approving products on a first filed/first released basis), a lack of adherence to regulatory approval times, and a lack of transparency on available information on marketing authorizations at COFEPRIS' website.

Fixing these problems will fall mostly on COFEPRIS.  Information available on authorization processes (both for innovators and generics) is indeed sorely lacking, and the rates of approval within the regulatory timeframes are low, for all industry participants.

The next section (3.3) delves into our linkage system, which was enacted in 2003, has been subject to partial Supreme Court review, and has substantial differences with the one established in the U.S. through the Drug Price Competition and Patent Term Restoration Act of 1984.

The study points two major problems with linkage; lack of transparency is the first, as inquiries on possible patent infringement are done in communications between COFEPRIS and IMPI without any immediate disclosure or right of hearing by the applicant or the patent holder.  Transparency mechanisms do allow companies to obtain copies of these communications, but many times after decisions have already been taken.

The second problem is that patents listed in the linkage gazette are not necessarily related to an approved drug product.  Any patent covering an active ingredient or formulation can be listed regardless of whether it covers a product which would be subject of generic competition or not.

This is one of the sections where I agree with COFECE; the system, in order to function properly for both innovators and generic manufacturers should allow interested parties to know precisely which patents are covering an approved product, and both generic drug applicants and patent holders should have an opportunity to be heard, either before administrative authorities or in an infringement proceeding, before an authorization is granted or denied.

The following section of the study will be quite interesting for both companies and policy makers; section 3.4 "Strategic behavior" refers to concepts that innovative companies will very likely object to, such as patent evergreening, patent clustering, and reference product switching based on new patents.  There are also references to positions taken by other Latin American countries such as Brazil (which subjects some patents to prior approval by regulators) or Argentina (which forbids the grant of several types of pharmaceutical patents).

These sections are followed by an explanation on past litigation activity on these topics, mentioning that it has been used as a deterrent to generic competition, and several recommendations, both of which will be analyzed in a subsequent post.

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

[1] https://www.cofece.mx/cofece/index.php/prensa/historico-de-noticias/cofece-el-vencimiento-de-patentes-no-se-ha-traducido-en-suficiente-presion-competitiva-en-el-mercado.  The press statement also contains the link to download the full study.