Patent Challenges Research Articles

Strategic Alliance Governance Through Termination Provisions: Safeguard and Incentive, Flexibility and Commitment

Termination provisions establish vital governance mechanisms in alliances, offering essential safeguards and incentives by providing the flexibility to exit (underperforming) partnerships. However, they can also foster distrust and instability by potentially undermining commitment and continuity. We argue that the motivation behind termination provisions lies in the need to address safeguarding and flexibility concerns arising from increases in alliance scope, upfront payments, and technological uncertainty. Conversely, alliances with strong relational commitment and social embeddedness stemming from prior and indirect ties tend to omit termination provisions. Drawing on an analysis of 1,576 biopharmaceutical alliance contracts, we scrutinize various conditional and unconditional termination rights, along with their partner-specific allocations. Among other findings, we observe a positive association between broad alliance scope and termination rights for patent challenge, for lack of reasonable effort, and for specific countries assigned to the research and development (R&D) firm contributing technological expertise and, furthermore, termination rights for convenience for the client firm sponsoring the alliance. Larger unilateral upfront payments increase the likelihood that the client firm receives termination rights for lack of reasonable effort and for convenience. Higher technological uncertainty is associated with termination rights for convenience for the client or R&D firm. In contrast, prior ties negatively correlate with termination rights for convenience for the client firm, while indirect ties show a negative association with termination rights for convenience and specific countries for the R&D firm. Conceptually, our study highlights the relevance of termination provisions as elastic governance mechanisms that enable partners to accommodate postcontractual disturbances.

Characteristics and outcomes of the drug patent linkage system in China

BackgroundOn July 4, 2021, China officially introduced the drug patent linkage system, which has made more localized adjustments than have similar systems in the US and South Korea. This study describes the characteristics and outcomes of China’s patent linkage system.MethodsFor this study, we used the database of China’s patent information registration platform for marketed drugs to capture all listed patents and patent certifications from June 25, 2021, to June 30, 2023. We used descriptive statistics for the above data to assess the impact of patent linkage on branded drug manufacturers, generic drug manufacturers, and the public’s access to medicines.ResultsDuring the study period, the patents of 632 branded drugs were listed, and 5058 ANDAs submitted patent certifications to the Registration Platform. Of these 632 branded drugs, 462 (73.1%) drugs were approved before the year of patent registration, and the average number of listed patents per drug was 1.8, with a standard deviation of 1.4. However, of these 5058 ANDAs, P1 certifications accounted for 85.1%, and P3 and P4 certifications accounted for 16% combined. In addition, according to the detailed statistics of P2 certifications, we found that the proportion of patent invalidation cases was 46.4%. The remaining validity of the patents corresponding to P3 certifications was longer, with a median value of 17 months, and the IQR was 10-30.75, ranging from − 2 to 204 months.ConclusionsChina’s patent linkage aims to promote the balance of multiple interests —innovation, imitation and public health—and has its own system characteristics. Patent listing and patent certification are the key indicators reflecting the implementation effect of the system. From the perspective of system outcomes, ANDAs have been connected to the patent linkage system in an orderly manner, but the growth of patent challenges is not obvious. Moreover, manufacturers of foreign branded drugs that have not yet entered the Chinese market need to pay more attention to the role of patent listing.

Biologic patent challenges under the America Invents Act.

Biologic patent challenges under the America Invents Act.

Pay‐for‐delay with settlement externalities

AbstractPay‐for‐delay patent settlements, in which the incumbent patentee pays a potential entrant to withdraw a patent challenge and stay out of the market, cost patients and taxpayers billions of dollars in higher pharmaceutical prices. We show that in markets with one incumbent and several entrants, the possibility of conditioning such settlements on litigation outcomes against other entrants results in the exclusion of all entrants from the market. When conditional contracts are infeasible, the incumbent licenses the patent or fights entry in court: the resulting competition benefiting consumers. Prohibiting all pay‐for‐delay settlements increases litigation and may harm consumers by reducing licensing.

On the Appeal of Drug Patent Challenges

On the Appeal of Drug Patent Challenges

Prospects for Long-Acting Treatments for Hepatitis C.

In 2019, more than 4 years after the widespread availability of safe, oral, curative treatments, an estimated 58 million people were living with hepatitis C virus infections (PLWHC). Additional tools may enable those not yet reached to be treated. One such tool could be long-acting parenteral formulations of HCV treatments, which may allow PLWHC to be diagnosed and cured in a single encounter. Although existing highly effective oral medications might be formulated as long-acting parenteral treatments, pharmacological, regulatory, patent, and medical challenges have to be overcome; this requires the concerted efforts of PLWHC, researchers, funding agencies, industry, the World Health Organization, and other stakeholders.

Patenting and patent challenges in South Korea after introducing a patent linkage system

BackgroundSouth Korea introduced the patent linkage system in 2015 as part of the implementation of free trade agreements with the United States. This study assessed trends in brand-name drug patenting and generic patent challenges in South Korea after the introduction of the system.MethodsFrom 2012–19, we constructed a novel dataset that combines information about listed patents with their corresponding brand-name drugs and patent challenges against these brand-name drugs. We analyzed brand-name drug patenting and generic patent challenges and elucidated factors in timely patent challenges using event history analysis.ResultsDuring the study period, 659 brand-name drugs listed their patents in the K-Orange Book and patent challenges against 95 brand-name drugs were initiated. The number of listed patents and their nominal patent term varied by the characteristics of the brand-name drugs. Patent challenges of generic drugs were marginal in South Korea even though the surge of patent challenges of generics were noticed right after the introduction of the patent linkage system.ConclusionsPatenting and patent challenges are critical factors when introducing generic drugs into the market under the patent linkage system. However, the impact of the patent linkage system on patenting and patent challenges could be varied by the specific form of the patent linkage system and the contexts of pharmaceutical markets.

Nippon Shinyaku Co. v. Sarepta Therapeutics, Inc.

Nippon Shinyaku Co. v. Sarepta Therapeutics, Inc.

Perceived impact of the patent linkage system on pharmaceutical market from the viewpoint of the domestic manufacturers in South Korea

BackgroundThe United States requires a patent linkage system in other countries as part of free trade agreements. However, introducing a patent linkage system could be a significant barrier to the timely approval of generic drugs. This study aimed to evaluate the perceived impact of the patent linkage system in South Korea held by domestic manufacturers and analyze variations in evaluating the system according to the characteristics of domestic manufacturers.MethodsIn 2020, we conducted a questionnaire survey of 39 domestic manufacturers. The survey consisted of perceptions of the system, factors affecting patent challenges, and the perceived impact of the system. A 5-point Likert scale was used to rate each item. Domestic manufacturers were categorized into three groups based on their experience of listing a patent and acquiring first generic exclusivity.ResultsMore than half of the manufacturers surveyed had experience of listing a patent. The patent linkage system could protect the involved patents. However, manufacturers perceived that they could successfully challenge the validity of the involved patents and then obtained market approval for generic drugs. Manufacturers responded that market size, expectations for succeeding in litigation, and expectations for manufacturing the drug were the most relevant factors when they initiated patent challenges. Manufacturers reported that the system, in particular the first generic exclusivity, enhanced the research and development capability of generic manufacturers, increased their domestic sales, and improved access to generic drugs.ConclusionsThe perceived impact of the patent linkage system was limited to the domestic market and generic drugs. In narrowing the impact to the effects on the domestic industry, the system had positive impacts of the system on generic manufacturers. The first generic drug exclusivity lies at the center of this positive perception. However, manufacturers perceived that the current system did not provide enough incentives for domestic manufacturers to be granted first generic drug exclusivity through patent challenges.

Risk Assessment of Failures in Generic Drug Development and Approval Procedure under Competitive Generic Drug Therapy and Patent Challenge Exclusivities Provided by the United States Food and Drug Administration

Abstract Objective: The United States Food and Drug Administration implemented two exclusivity programs Competitive generic therapy and Patent Challenge exclusivity to develop generic drugs, which provide a 180-day monopoly market for first generic applicants in the United States of America. The aim of the present study is to find the root cause of failures in developing and filing the first generic drugs under these exclusivities and to compare both the exclusivities to find the merits and demerits. Methods: We used descriptive statistics for data analysis of both the exclusivities and Risk assessment was conducted on 14 industries to find the root cause of failures in every stage of the approval procedure by FMECA (Failure mode, Effects and Criticality Analysis). Results: We found 44% of rejections in competitive generic therapy drugs and 30% of rejections in patent challenge exclusivity drugs. The risk analysis conducted on failures found that, in drug selection, 6% of failures are occurred due to rare diseases. In drug development, 9% of failures are occurred due to formulation failures. In pre-approval, 10% of failures are occurred due to secondary patents. In post-approval, 6% of failures are occurred due to product changes after approval. Conclusion: We hope this study can give an idea for small and medium companies in developing countries for the early development of generic drugs for life-threatening diseases.

Are Settlements in Patent Litigation Collusive? Evidence from Paragraph IV Challenges

The use of “pay-for-delay” settlements in patent litigation – in which a branded manufacturer and generic entrant settle a Paragraph IV patent challenge and agree to forestall entry – has come under considerable scrutiny in recent years. Critics argue that these settlements are collusive and lower consumer welfare by maintaining monopoly prices after patents should have expired, while proponents argue they reinforce incentives for innovation. We estimate the impact of settlements to Paragraph IV challenges on generic entry and evaluate the implications for drug prices and quantity. To address the potential endogeneity of Paragraph IV challenges and settlements we estimate the model using instrumental variables. Our instruments include standard measures of patent strength and a measure of settlement legality based on a split between several Circuit Courts of Appeal. We find that Paragraph IV challenges increase generic entry, lower drug prices and increase quantity, while settlements effectively reverse the effect. These effects persist over time, inflating price and depressing quantity for up to 5 years after the challenge. We also find that eliminating settlements would result in a relatively small reduction in research and development (R&D) expenditures.

Generics and Biosimilars: Barriers and Opportunities

Generics and Biosimilars: Barriers and Opportunities

Patent challenges and factors associated with successful patent challengers under the patent linkage system: recent evidence from South Korea after the Korea United States free trade agreement

ObjectivesThe patent linkage system upgraded patent challenges to an important factor in granting timely market approval for generic drugs. We aim to understand patent challenges and identify the factors that are associated with successful patent challengers under the patent linkage system in South Korea.MethodsWe constructed a novel dataset that combined information on manufacturers with detailed data about their patent challenges after introduction of the patent linkage system. Based on the number of successful patent challenges, manufacturers were categorized into non-challengers, passive challengers, and aggressive challengers. Then, two types of logistic models were applied to identify the factors associated with successful and aggressive challengers.FindingsOnly 39 active ingredients were challenged by 77 manufacturers from March 2015 to December 2019. Of 171 manufacturers, 94 (55 %) were non-challengers, 58 (34 %) were passive challengers who had succeeded in fewer than 4 patent challenges, and 19 (11 %) were aggressive challengers who had succeeded in 4 or more patent challenges. Higher sales, more employees, and a greater number of reimbursed drugs were associated with being a patent challenger, while a greater number of reimbursed drugs was associated with being an aggressive challenger.ConclusionSome manufacturers utilize patent challenges to strengthen their product portfolios in the market. However, under the patent linkage system, the frequency of patent challenges is limited in South Korea compared to the United States. In particular, patent challenges against drugs in injection form and biologics are very rare.

Optimal Incentives for Patent Challenges in the Pharmaceutical Industry

In this paper, we show that a provision in antitrust law to allow patent settlements with a later market entry of generics than the date that is expected under patent litigation can increase consumer welfare. We introduce a policy parameter for determining the optimal additional period for collusion that would incentivize the challenging of weak patents and maximize consumer welfare. While in principle, later market entry leads to higher profits and lower consumer welfare, this can be more than compensated for if more patents are challenged as a result.

Enhancements of ’Competition Culture’ in Pharmaceutical Sector: Anti-Competitive Infringements and Consumer Welfare

Indeed, it is the economic regulation that shaped present ‘competitive market structure’ in Malaysia. This market structure hence generated the ‘competition culture’ in many industries. The structural changes contributed to transition of a regulated market-based to open market- based economy. The transition saw competitive market structure illustrated by the involvement of private and public enterprise as market players in the main and sub sectors. The first sectors were telecommunication and energy. These sectors have shown stable and robust competitiveness in the market whereby private entities and independents telecommunication companies compete in the Malaysian tele-communication market. The competitive culture saw a liberalised and deregulated market based that brought about efficiencies in services, prices and innovations. Secure and continuous pharmaceutical supplies are structural responsibilities shared by all stakeholders in the market. Pharmaceutical industry generated and garnered extensive intellectual rights in terms of drugs, services and medical supplies. Manufacturers in pharmaceutical sectors invests massive funding to develop new creations, this is evident by the COVID-19 vaccines, patent and trademarks rights are thus awarded to the creators of the innovation.The ‘competition culture’ illustrated through stable and extensive electricity, internet coverage, lower prices, choices of products and services for customers. Amidst the post pandemic crisis, pharmaceutical supply chain has become one of the important sector that require attention in sustainability and accessibility. Documentary examination shows, to date, present pharmaceutical market structure divided between levels 1, 2 and 3 represent monopolistic and oligopolistic structural framework. Summative assessments revealed there are ant –competitive behaviour’s concerns in the sector. Instituting ‘competition culture’ and enhance competition regulatory measures are pivotal in advocating a level playing fields in all three levels. Comparative method examination from other jurisdiction experiences and lessons are the parameters of this article. This studies hope to examine and discuss existing constraints in structural framework and competitive culture in pharmaceutical drugs market.The structure of this Article is the following. In Part 1, explain the relationship of patents rights and competition policy and law, industry market structure, market players and relationship between intellectual property patent laws and competition laws. Part 2, explain anti-competitive behaviours from patent holders and challenges and implications on the violations of competition law. Part 3 recapitulates the constraints, issues and structural suggestions for workable ‘competitive culture’ in the pharmaceutical market. We hope this studies will provide further research gap for future research.

Optimal Patent Policy for Pharmaceutical Industry

We show how characterizing optimal patent policy for the pharmaceutical industry only requires information about generic producers' responses to changes in the effective duration and scope of new drug patents. To estimate these responses, we use data on Paragraph IV patent challenges, and two quasi-experimental approaches: one based on changes in patent laws and another on the allocation of patent applications to examiners. We find that extending effective patent duration increases generic entry via Paragraph IV patent challenges whereas broadening protection reduces it. Our results imply that pharmaceutical patents should be made shorter but broader.

The Social Costs of Portfolio Diversification: Evidence from Patent Challenges in the Pharmaceutical Industry

The FDA grants a 180-day period of marketing exclusivity to reward the first generic manufacturer challenging the monopoly status of patent-protected drugs. Institutional horizontal shareholdings --- the generic shareholders' ownership in the brand-name incumbent relative to their ownership in the generic manufacturer --- are positively associated with the likelihood that the first generic enters into a settlement agreement with the brand. The results are not driven by systemic differences between private and public firms, and survive from a panel instrumental variable strategy that exploits the combination of the two largest investors. Horizontal shareholdings are positively associated with the brand’s abnormal daily stock returns around the settlement agreement. Following settlements, the first generic manufacturers are more likely to delay the sale of generic substitutes if they have higher horizontal shareholdings with the brand. These delays preclude other generic manufacturers from entering the market. Generic manufacturers with higher horizontal shareholdings are more likely to be the first patent challengers. The findings suggest commonly owned incumbent and competitors coordinate in response to the threat of entry.

Estimating The Cost Of Delayed Generic Drug Entry To Medicaid.

Delays in market entry of generic drugs are common. This study sought to identify the prevalence of delayed entry, the reasons for the delays, and the delays' effects on Medicaid spending in a recent cohort of brand-name medications. We estimated excess Medicaid spending in 2010-16 in the delayed quarter-years after accounting for market average predictions of brand-name market share, ratios of generic to brand-name prices, and Medicaid rebates (60percent for brand-name and 15percent for generic drugs). Among sixty-nine brand-name drugs that were predicted to lose market exclusivity, generic entry occurred either before or within a quarter-year of the expected date for thirty-eight products (55percent), was delayed by more than one quarter for twenty products (29percent), and did not occur for eleven products (16percent). For the thirty-one products (45percent) for which generic entry was delayed by more than one quarter or did not occur, Medicaid spent an estimated excess of $761million over seven years ($109million annually). Patent litigation was the most common cause of generic entry delays. Policies that expedite the resolution of patent challenges are needed to ensure the timely entry of generic drugs.

Entry limiting agreements: First‐mover advantage, authorized generics, and pay‐for‐delay deals

AbstractDuring patent litigation, pay‐for‐delay (P4D) deals involve a payment from a patent holder of a branded drug to a generic drug manufacturer to delay entry and withdraw the patent challenge. In return for staying out of the market, the generic firm receives a payment, and/or an authorized licensed entry at a later date, but before the patent expiration. We examine why such deals are stable when there are multiple potential entrants. We combine the first‐mover advantage for the first generic with the ability of the branded manufacturer to launch an authorized generic (AG) to show when P4D deals are an equilibrium outcome. We further show that limiting a branded firm's ability to launch an AG before entry by a successful challenger will deter such deals. However, removing exclusivity period for the first generic challenger will not.

Oil and Gas Industry Contents Development Act 2010 (Local Content) Law and Challnges in Nigeria

Any policy, law or regulatory framework that adds value to the indigenous host country’s goods, services and human beings has in it the local or indigenous content. An examination of the Oil and Gas Contents Development Act 2010 in Nigeria will show significant progress made in the foray of the hitherto the dark horse – indigenous oil and gas companies into the elite oil and gas class previously `reserved` for the Multinational Oil and Gas Corporations. This was made possible by the emerging local content laws. However, a lifting of the veils of its actual performance, would reveal both latent and patent challenges facing the application of local contents laws particularly in Nigeria., This paper examines the operations of the Nigeran Oil and Gas Contents Development Act 2010, the challenges and possible recommendations on how to bring it in line with the best global practices. This paper found amongst others that infrastructural and capacity development are the power- base to driving effective local content application anywhere but are sadly lacking in Nigeria. It also found that the Nigerian version of the local contents law tilts towards protectionist regime rather than liberal approach and that a synergy of both frameworks is desired for the smooth operations of local content laws in Nigeria. This paper finally concludes that Nigeria can take a cue from other countries such as Norway and Brazil while considering the peculiarities of the Nigerian oil and gas industry. Keywords Oil and Gas: Local contents law and Practices, challenges and recommendations DOI: 10.7176/JRDM/65-05 Publication date: May 31 st 2020