Patenting in the Pharmaceutical Industry - Supplementary Protection Certificates

The Chartered Institute of Patent Attorneys strongly supports an all-industry approach to patenting inventions, including inventions made in the pharmaceutical industry. It is vitally important that inventors, or the companies who employ them, get a just reward for their innovative efforts and the chance to recoup large sums of money spent in development.

In certain fields, commercial exploitation of an invention is simply not possible for several years after the invention has been made and patent applications filed. An unfortunate consequence of this is that the effective term of patent protection is reduced. Accordingly, the Chartered Institute is in support of a mechanism whereby the term of a patent can, in appropriate cases and in all areas of industry, be extended to compensate for time which is unavoidably lost in getting a product on to the market. The Chartered Institute therefore welcomes the fact that the European Commission has implemented patent term restoration in Europe (though only so far in two technical areas, pharmaceuticals and pesticides).

The field of medicines is a key example of an area of activity in which this problem arises and this paper now focuses on some of the problems currently facing the pharmaceutical industry.

The process of discovering and developing new medicines is necessarily highly complex and extremely costly. Nowadays it can easily take £100-200 million in R&D investment to bring a new drug containing a new chemical entity (NCE) to the marketplace.

If every NCE researched could be counted upon to be a 'blockbuster', pharmaceutical companies would be less uneasy about committing such massive resources. However, for each successful drug developed thousands of compounds and materials may be tried and discarded, sometimes in late stages of development. Even those drugs which do 'make it' may fail to generate an adequate return on investment. Unfortunately the situation is worsening: pharmaceutical R&D costs are escalating and new active substances must be safer and have a greater innovative potential to be successful. The number of NCEs launched onto the world market per year has gradually fallen from over 90 in 1969 to under 40 in 1989.

Against this background it is hardly surprising that the pharmaceutical industry is becoming even more dependent on effective patent protection to fend off copiers. Strong patent protection is seen as essential to the encouragement of development of new curative medicines and devices.

The major problem that the industry faces is erosion of the effective life-span of a patent, which has arisen in the last 20-30 years by the need to satisfy more and more stringent regulatory requirements prior to obtaining market authorisation. The effective patent life in the UK (from the date of marketing to patent expiry) has recently been estimated by the Centre for Medicines Research (CMR) to be on average only 8 years. After this short period of exclusivity 'generics' companies (which do not engage in basic research and development) will be poised ready to introduce a generic equivalent of the drug and can be expected rapidly to erode market share.

To compensate for the short effective patent life which pharmaceuticals inevitably have, an extension of the period of legal protection (patent term restoration) has been possible in the USA since 1984 and in Japan since 1988.

Europe has accordingly introduced Supplementary Protection Certificates (SPCs) for pharmaceuticals which provide a maximum of 15 years legal protection after the first marketing authorisation in the European Union, subject to a maximum SPC term of 5 years. The EU Regulation 1768/92 make SPCs available for patents that are extant in the EU on or after 1st January 1993 in most EU member states, but introduction of the provisions was deferred in Spain, Portugal and Greece until 1st January 1998.

For patented products already marketed within the EU an SPC of up to 5 years may be granted, but it was left to the discretion of each member state to decide the 'cut-off' date by which marketing authorisation must have been obtained before an SPC is available. The cut-off dates are 1st January 1982 (Belgium and Italy); 1st January 1985 (France, Ireland, Luxembourg, Netherlands and UK); and 1st January 1988 (Denmark, Germany, Greece, Portugal and Spain). It appears that the SPC is intended to apply only to the approved pharmaceutical and only to the medical conditions for which it is approved during the normal term of the patent. SPCs are obtained from the national patent offices of each country and are enforceable and may be attacked before the Courts in the same way as patents. Because the European Patent Convention states that the term of a patent is 20 years, the Member States of the Convention have agreed an amendment to Article 63 which permits patent term to be prolonged when the patented product can be marketed only at the end of a marketing authorisation procedure which reduces the period of effective protection.

The SPC Regulation for pharmaceuticals was formally published in the European Official Journal on 2nd July 1992, and came into force on 2nd January 1993. A corresponding SPC Regulation for agrochemicals, 1610/96, came into force on 8 February 1997.