Brazil: An Update of the Most Relevant Events for Pharmaceutical Companies in 2014: Part 3 of a 5-Part Series

This is part 3 of a 5-part series providing updates on: 1) mailbox patent litigation; 2) the constitutional challenge filed by ABIFINA against the 10 year patent term guarantee; 3) new Productive Development Partnership (PDP) guidelines; 4) prior approval challenges and ANVISA; and 5) an opinion issued by the Brazilian Antitrust authority (CADE) regarding sham litigation. Part 1: Mailbox patent litigation can be found here. Part 2: The constitutional challenge filed by ABIFINA against the 10 year patent term guarantee can be found here.

New PDP guidelines define how branded and generic pharmaceutical companies will conduct business with the Brazilian government

On November 13, 2014, the Brazilian Ministry of Health published new guidelines redefining the requirements for establishing Public-Private Productive Development Partnerships (PDPs). Specifically, Ordinance #2531/2014 was published after public consultation for 23 days. The final text received extensive input from various associations and private industry which together were responsible for 70% of the total submissions to the text. As a result of these submissions, 47 of 76 of the articles of the final text were changed. Because of the requests from the various associations and private industry for more details and transparency, the new guidelines are clearer than previous guidelines and establish a procedure for submitting, deciding, monitoring and evaluating PDPs. 

The Federal government’s effort to establish a pharmaceutical technology transfer program started in 2008 in view of growing concern regarding the increasing expenditures by the government in purchasing medicines to supply the population through the Unified Healthcare System (referred to as “SUS”). For example, in 2013, the government spent USD$4 billion purchasing medicine. As a result, the growing trade deficit in the pharmaceutical sector led the government to create the “National Program for the Promotion of Production and Innovation in Public Health Industrial Complex”. However, the lack of specific rules for implementing technology transfer agreements led several companies to challenge certain agreements as being “illegal” before the Brazilian courts. 

In 2012, the government issued a specific rule for the technology transfer program (Ordinance #837/2012). However, despite introducing general guidelines for the presently referred to “PDP program”, the Ordinance failed to provide clear definitions and specific information, such as, for example, the responsibility of each party of a PDP agreement. 

New Ordinance #2531/2014 revokes Ordinance #837/2012 and has the goal of providing transparency to the PDP program. Specifically, Ordinance #2531 provides more accurate definitions of terms such as “PDP” and “strategic products”. Additionally, the final text is an improvement over previous drafts published for public comment as definitions such as “incremental innovation” and “radical innovation” have been removed. Nonetheless, the final text failed to amend other definitions that were not well written in the initial draft such as “PPB – Basic Productive Process”, “Technological” and “Technological Portability”. The lack of an accurate definition for each of these terms will create uncertainty for the industry. 

The new PDP guidelines also establish the mandatory compliance of PDPs with intellectual property and patent rights. Specifically, the guidelines establish that a PDP proposal must contain a list of granted patents or patent applications that cover a product that is the subject of a PDP proposal (See, Article 14, III). 

The existence of multiple PDPs for biologics was not well addressed in the new PDP guidelines. The distribution of biologics and biosimilars by different PDPs might raise pharmacovigilance problems with regard to the monitoring of use of different biologics by patients. How biologics and biosimilars will be distributed through the PDPs to patients remains unclear and will need to be addressed in a new specific rule. 

Ordinance #2531/2014 will affect all PDPs, both new PDPs as well as all those currently in existence. Existing PDPs will have a period of 180 days to comply with the provisions of Ordinance #2531 (See, Article 70, paragraph 1). Additionally, the new ordinance revoked Ordinance #3089 of 2013 (which defined the list of strategic products for the SUS that could be the subject of a PDP). However, the current list of strategic products established by Ordinance #3089 will be maintained until the Ministry of Health issues a new list (See, Article 74). There is ongoing debate regarding whether the Ministry of Health will publish a new list of strategic products for comment by industry or whether it will simply publish the list without allowing for any comment. 

Please find attached here the full text of Ordinance #2531, the current list of strategic products that might be subject of a PDP and a proposed PDP flowchart.  ORDINANCE LISTOFPRODUCTS PDPFLOWCHART

This post was written by Lisa Mueller and Roberto Rodrigues of Licks Attorneys.






A Report from the “Biosimilars and Biotech: MENA Conference” in Istanbul, Turkey: Part 1

This is part 1 in a series reporting on the conference entitled, “Biosimilars and Biotech:  MENA Conference” sponsored by Informa in Istanbul, Turkey on November 18-19th. As mentioned in my post of November 17th, not only did I attend the conference but presented as well. I found the conference to contain a number of really exciting, interesting and useful presentations. In the next few posts, I will provide a summary of some of the presentations that I believe readers of the BRIC Wall Blog will find insightful, and hopefully useful. 

Biosimilar Development in the Middle East – A Report

A very interesting presentation was given by Dr. Claudia Palmer (Partner and Managing Director of 55east FZ LLC) on the development of biosimilars in the Middle East. Dr. Palmer started her presentation by discussing the exchange she frequently has when asking various stakeholders in the Middle East for their view on the biosimilar marketplace. The response she typically receives is: “Biosimilars? Do you have them?” Ms. Palmer stated that currently, because there are so few companies in the area dealing in biopharmaceuticals, very few biosimilars are actually available. 

Despite the limited number of biosimilars presently available, Ms. Palmer stated that the region holds substantial potential for the growth of these products. Specifically, she noted: (1) the population in the Middle East is more than 200 million and is among the fastest growing in the world; (2) there is now political and fiscal stability in the region; (3) the economies of many countries in the area are booming; (4) there is a growing middle class; (5) life styles are changing and life expectancy is increasing; (6) the incidences of serious disease is increasing; and (7) the quality healthcare is improving and the sophistication of treatment increasing. 

With respect to biologics, Ms. Palmer stated that the price tag that typically accompanies biologics (such as seen in the U.S.) simply is not viable for many of the smaller Middle Eastern countries. In fact, in her view, as the incidences of cancer grow in this area, biosimilars will be the only affordable treatments for these diseases in many of these countries. Interestingly, Ms. Palmer commented that no one is really sure the exact amount that can be saved by treating a patient with a biosimilar instead of with an innovator biologic. 

In Ms. Palmer’s view, there is an opportunity for early entry of three biosimilar products in the region. These products would be erythropoietin (EPO), somatotropin and filgrastim. Ms. Palmer believes that the market opportunity for these three drugs in the Middle East, Turkey and Africa (META) region would be around $160-$190 million dollars, about 3% of the total biosimilar market. She indicated that this number was small because the path to market for any biosimilars in the region was going to be challenging.   First, she noted that it generally takes about two to three years once a biologic is approved in the U.S. or Europe for that biologic to become accessible in the Middle East. Once the biologic becomes available in the region, adoption tends to be slower than in the rest of the world due to a lack of infrastructure and the lack of insurance coverage for these products. Additionally, further complicating matters is that a number of countries in the Middle East have not yet established biosimilar frameworks. As Ms. Palmer noted, a biosimilar is only a biosimilar if it has gone through a biosimilar pathway. 

Ms. Palmer also stated there will likely be issues with pricing and reimbursement for biosimilars in these countries. Specifically, she noted that tenders comprise a majority of the market (likely over 80%) and the systems are not always transparent. Moreover, in many instances, preference for tenders is given to local biopharmaceutical companies. 

With respect to potential customers, Ms. Palmer stated that the typical buying entities for speciality drugs in this region will likely include: Ministries of Health, central pharmacies, army/military, hospitals, non-governmental organizations (NGOs) and dialysis centers. Ms. Palmer noted that biologics treatment is normally provided in the region by hospitals and dialysis centers. For nationals receiving these treatments, the treatment is generally paid for by the national healthcare system or by insurance. 

Ms. Palmer noted that so far, competition for biosimilars in the region has been limited. Multinational generic companies such as Hospira and Sandoz seem to have the best regional footprint so far. She also noted that currently there are really no local manufacturers in the area to speak of. The lack of such local manufacturers presents a number of positives and negatives. In terms of positives, no local manufacturers means that there will be a longer lead time for local companies to enter the market. Moreover, the lack of local manufacturing might make it hard for authorities to insist on a preference for a local product (particularly if there is none). Finally, the lack local manufacturers might facilitate the slowing of price erosion. With respect to the negatives, the lack of competition will likely mean that there will be few to no companies to partner with for the purposes of contract manufacturing. This lack of manufacturers might cause a cojoining of manufacturers and distributors which might result in a skills gap that could create challenges in distribution. Additionally, the lack of local manufacturers might also impact the ultimate acceptance of these biosimilar products and might instead increase tolerance for products imported from India or China. 

Near the end of her presentation, Ms. Palmer stated that companies interested in entering the biosimilar market in the Middle East will need to enhance their capabilities across their organizations and value chains. Ms. Palmer stated that any such companies will want to first make sure they have obtained either a U.S. or European registration for their biosimilars. Next, companies will want to invest in stakeholder management. Specifically, companies will want to: (1) build a network of regional stakeholders; (2) create awareness among these stakeholders; and (3) educate and train these stakeholders. Moreover, when dealing with local regulatory organizations, companies will want to drive rapid marketing authorizations. Businesses will also need to adapt their value chain by: (1) building a tender infrastructure; (2) enhancing supply chain capability; (3) enabling distributors; and (4) engaging with local players. Finally, businesses will want to align the commercial organization by: (1) establishing a speciality marketing approach; (2) developing key account skills; (3) clarifying conflicts of interest; (4) customizing medical education; and (5) leveraging existing footprints. 

At the end of her presentation, Ms. Palmer concluded with the following: 

  1. In general, the Middle East and Africa are the final frontier in pharma: In Ms. Palmer’s view, this is the last sizable area of untapped growth having limited competition. 
  2. Biosimilars hold a big promise for the Middle East: Biosimilars will provide modern treatments for large populations with limited purchasing power. 
  3. The biosimilars market will have to be built: Companies will need to work heard to create awareness, education and a safe supply of drugs. 
  4. This will be a marathon, not a sprint: As discussed previously, the current META commercial opportunity is around $160-$190 million for EPO, filgrastim and somatotropin.
  5. Regulatory capability, market access and process management will drive success: The complexity of the challenge will be an opportunity for the right company. 
  6. The government will become your partner: According to Ms. Palmer, with tenders comprising 80% and more of the biosimilars market, stakeholder management and key account skills will be essential. 
  7. Build a biosimilars ecosystem:  Ms. Palmer noted that like a highly developed machine, biosimilar treatment can only thrive in a sophisticated, supportive environment. 

This post was written by Lisa Mueller.

Biosimilars and Biotech: MENA Conference – Istanbul, Turkey – November 18-19th

Informa Life Sciences will be hosting a conference entitled, “Biosimilars and Biotech:  MENA Conference” in Istanbul, Turkey on November 18th-19th.  I will be presenting during this conference on the topic of global biosimilar development as well as providing an update on biosimilars in the U.S. 

The conference will examine a number of topics that may be of interest to BRIC Wall Blog readers, including biosimilar development in Turkey and the Middle East, as well as an interesting session on understanding and accessing biosimilars in Iran.

I will be providing updates to BRIC Wall readers on topics from the conference beginning tomorrow.

If any of our readers are attending the conference, please stop by and say hello.

This post was written by Lisa Mueller.

Brazil: An Update of the Most Relevant Events for Pharmaceutical Companies in 2014: Part 2 of a 5-Part Series

This is part 2 of a 5-part series providing updates on: 1) mailbox patent litigation; 2) the constitutional challenge filed by Abifina against the 10 year patent term guarantee; 3) prior approval challenges and ANVISA; 4) a new Productive Development Partnership (PDP) rulemaking draft proposal; and 5) an opinion issued by the Brazilian Antitrust authority (CADE) regarding sham litigation. Part 1: Mailbox patent litigation can be found here

Constitutional Challenge: The 10 year minimum patent term under attack 

The sole paragraph of Article 40 of Brazil’s Industrial Property Law (Article 40) guarantees a minimum patent term of 10 years from the date of grant in those instances where the Brazilian Patent Office (INPI) takes more than 10 years to examine and grant a patent. At the time Article 40 became effective, it was expected that its use would be limited. However, quite the opposite has occurred. 

Due to the tremendous backlog of patent applications, it is normal for patent prosecution in Brazil to take longer than 10 years. By way of example, thus far in 2014, INPI has granted 2043 patents. Of these, 1312 have issued with a term of 10 years from the date of grant (meaning that patent prosecution took longer than 10 years), while 746 have issued with a term of 20 years from the date of filing. This data demonstrates how the backlog is impacting the term of patents in Brazil.  What is even more disturbing is that in some technical areas, such as hi-tech, patent prosecution may take as long as 18 years. Similar delays are frequently encountered with pharmaceutical patent applications. In a recent event, the Director of the Patent Board of the INPI, Mr. Júlio César Moreira, stated that if the backlog scenario does not change, within the next 4 years, Article 40 will be applied for every patent granted. Detailed information about the event with Mr. Moreira please can be found here

With respect to pharmaceuticals, since the enactment in 2012 of Ordinance 1,065/2012, INPI and the National Sanitary Vigilance Agency (ANVISA) have instituted a new workflow wherein INPI will send a patent application claiming a pharmaceutical product or process prior to examination on the merits to ANVISA for a prior approval analysis pursuant to Article 229-C. The problem with this workflow is that in the past, it has sometimes taken INPI approximately 8 years to send a patent application to ANVISA for prior approval analysis. Therefore, under this new workflow, the odds are very high that a majority of pharmaceutical patent applications will take longer than 10 years to be granted. In such instances, these patent applications will be entitled to a minimum term of 10 years from the date of grant. 

Given this scenario, Abifina and the Brazilian generic industry (collectively, Abifina) have attacked Article 40 through a number of different mechanisms. For example, Abifina has attacked Article 40 through the “Patent Reform” Bill (#5402/2013), which is presently being discussed by the Brazilian Congress. The Patent Reform Bill contains a number of anti-patent provisions, including one that would eliminate the 10 year minimum patent term. 

In addition, at the end of 2013, Abifina filed an unconstitutionality lawsuit before the Brazilian Supreme Court against Article 40. Interestingly, Abifina appears to be sparing no expense with regard to this lawsuit. In addition to filing a 60-page brief containing several constitutional arguments with the complaint, Abifina submitted two legal opinions from prominent authorities in Brazil, namely, Justice Eros Grau (who retired. from the Supreme Court in 2010) and Professor Denis Borges Barbosa (who is one of the most influent scholars in Industrial Property in Brazil).   

To summarize, in its brief, Abifina argues that Article 40 provides patent exclusivity for an undefined term. Specifically, according to the Abifina, the failure to include a definition of patent term in the statute is contrary to Article 5th, XXIX, of the Federal Constitution, which establishes that inventions provide “temporary protection”, with the word “temporary” being the key. Additionally, Abifina argues harm to free competition and to the national development of the Brazilian industry, among other arguments. 

The government (namely, the Legislative, Executive and the Brazilian Attorney-General’s Office) filed briefs defending the constitutionality of Article 40. The briefs reminded the Supreme Court that many Brazilian companies which invest in innovation, such as Petrobras and Embraer, would be harmed if Article 40 was declared unconstitutional. 

However, in July 2014, in an unusual turn of events, the Office of the Prosecutor General (Prosecutor General) submitted a brief agreeing with Abifina on the unconstitutionality of Article 40. According to the Prosecutor General, the possibility of an uncertain patent term is not compatible with the social purpose of industrial property, nor with the constitutional protection of the consumer. Moreover, in the Prosecutor General’s opinion, it also brings negative consequences to social rights, such as health. 

Because Brazil does not provide any regulatory data protection for pharmaceutical drugs for human use, there is no doubt that Article 40 is an important and necessary tool needed to protect the pharmaceutical industry’s research and development investments. Interfarma has already submitted a brief in the above action defending the constitutionality of Article 40. However, thus far, the generic industry has clearly shown that it will use all and the best weapons available in this fight. 

Abifina recently filed another opinion from Professor Heloisa Helena Barboza, a renowned scholar in Private Law and an expert in the interface of public health and law. Professor Barboza’s opinion focused on demonstrating how the guarantee of the 10 year minimum term of protection for patents affected the public interest, postponed the entrance of generic products in the market and damaged the poor people in Brazil that need low cost drugs. 

We expect Justice Fux to start to hear Abifina’s unconstitutional challenge in 2015.​ 

Please continue to watch the BRIC Wall Blog for further updates on the 10 year minimum patent term and this constitutional challenge. 

This post was written by Lisa Mueller and Roberto Rodrigues of Licks Attorneys.

The Brazilian Patent Office places the fight against the patent application backlog as its top priority

On October 30, 2014, the Director of the Patent Board of the Brazilian Patent Office (INPI), Mr. Júlio César Moreira, made a presentation to patent agents and attorneys to discuss the measures that INPI is implementing to reduce the patent application backlog. The backlog, as highlighted by Mr. Moreira, is currently the biggest issue plaguing INPI. Problems with the scanning of documents and the processing and examination of applications are creating a backlog of approximately 10 years in every art division.

For Mr. Moreira, one problem that has contributed significantly to the increase in the backlog has been INPI’s transition to a paperless system. Since 2013, hundred of thousands of petitions and patent applications have been sitting waiting to be scanned. Two companies hired by the INPI to assist with the scanning have gone bankrupt leaving the job unfinished. According to Mr. Moreira, a third company was recently hired to help with the scanning.

The second problem is the processing and publishing of PCT applications entering the national phase in Brazil. According to Mr. Moreira, Brazil receives approximately 22,000 application per year; however, INPI’s staff is only able to process approximately 10,000 applications per year. Therefore, approximately 12,000 applications per year are added to the backlog. INPI’s proposal to solve this problem is to focus on the publication of applications that are complete (namely, those applications that do not contain any missing documents). Applications that are not complete and have formal irregularities will be put aside and revisited in the future. At some point, an office action will issued requesting correction of the irregularities. In view of this, it is recommended that Applicants make certain that their applications comply with all formal requirements when entering the national phase in Brazil in order to avoid being placed in the backlog queue of “incomplete applications”

The backlog associated with substantive examination remains a big issue. Mr. Moreira stated that the average time until the beginning of examination is approximately 10 years. Unfortunately, the telecom division has the largest backlog. In this division, it takes approximately 13 years for examination just to begin and an additional 1 year for examination to be completed and a patent granted.  

Mr. Moreira also spoke of INPI’s concern over the backlog in view of the 10 year minimum patent term as established by Article 40, sole paragraph (Article 40), of the Patent Statute, and the consequences of this article for Brazil (especially in connection with public health). According to Mr. Moreira, currently, 63% of all patents granted by INPI have a 10 year minimum term. Unless something changes quickly, within four years, all patents granted in Brazil will have the 10 year minimum term. In view of this, INPI has been forced to take aggressive measures to try and reduce the backlog.

Mr. Moreira announced that the INPI will soon launch a program called “Promoted Withdraw”. According to Mr. Moreira, this program will allow an Applicant to abandon an “old” pending patent application and refile it as a new application which would be placed much higher in the queue for examination. INPI believes that this program will encourage Applicants to keep alive only those applications that they have a real interest in and this will help reduce the number of patent application currently under examination.

All in all, Mr. Moreira is very positive regarding INPI’s future. He stated that INPI is planning to hire an additional 400 examiners until 2018. He believes that the hiring of these new examiners will speed up the processing and examination of applications, thus contributing to the reduction in the backlog.

Mr. Moreira also stated that other measuring being taken to reduce the backlog include improvements in the training of the current INPI staff and streamlining administrative routines in order to increase productivity.

Please continue to watch the BRIC Wall Blog for further updates on the reduction of the application backlog at INPI. 

This post was written by Lisa Mueller and Roberto Rodrigues and Breno Souza of Licks Attorneys.