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2025-12-22 11:54:36

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Companies show mixed responses to patent term limitation law
by Kim, Jin-Gu Dec 30, 2024 05:57am
A bill to amend the Patent Act to limit the patent period for new drugs has passed the plenary session of the National Assembly. The amendment will limit the upper limit of the remaining patent term to a maximum of 14 years from the time a new drug is approved and allow only one of several patents registered for a single drug to be extended. The pharmaceutical industry has expressed both excitement and concern. Multinational pharmaceutical companies that own a large number of original drugs are worried that their patent life will be shortened. Domestic pharmaceutical companies, on the other hand, are generally excited about the prospect of being able to launch generics sooner. The amendment to the Patent Act raises concerns among multinational pharmaceutical companies...“will rather reduce access to drugs” According to industry sources on the 30th, the National Assembly held a plenary session on the 27th and passed the bill to amend the Patent Law. The amendments to the Patent Law are implemented through the government's promulgation process. Its effective date will be 6 months from the date of promulgation. The amendments will apply to patent applications registered after the amendment is enacted. Assuming that the revised law is promulgated early next year, this means that the new patent term system will be implemented as early as the second half of next year. The revision is expected to result in a shorter patent term for original drugs in Korea. Conversely, this means that generics will be available in Korea sooner. The advantages and disadvantages that the amendment will bring to original and generic companies will be sharply divided. Multinational pharmaceutical companies with a large number of original drugs are expected to be disadvantaged by the revised law. The shorter patent period will allow generics to be launched sooner, which will result in lower drug prices. It is also expected to partially neutralize the original companies’ strategy of delaying generic entry by extending multiple drug patents. When the actual amendment was being discussed by the National Assembly, the multinational pharmaceutical companies submitted a statement opposing the amendment. Korean Research-based Pharmaceutical Industry Association (KRPIA) criticized the amendments, saying, “Adopting foreign practices for only some elements, rather than revising the entire regulation on patent term extension, undermines the public's access to medicines and undermines international harmonization.” A representative of a multinational pharmaceutical company said, “Patent challenges by generic companies have been frequent in Korea due to the first generic prior authorization (first generic) system, and the probability of winning patent lawsuits has been higher for the generic companies than in the US and Europe.” “Under these circumstances, shortening the effective patent term will just further damage the companies that own the original drugs.” Expenctations rise among domestic companies on “launching generics faster”…some play ‘caution’ On the other hand, domestic pharmaceutical companies generally welcome the passage of the Patent Act amendment bill during the National Assembly’s plenary session. As the patent term of original drugs will be shortened, the domestic pharmaceutical companies expect this will accelerate the early release of generics, which already own a fair share of the market. “Compared to advanced countries such as the U.S. and Europe, Korea has been overprotective of the patent term of original drugs,” said an official from a Korean pharmaceutical company. ”I think it's good that the law has been revised so that we can keep pace with the global pharma and biotech industry.” “The extended patent life was virtually impossible to overcome,” the official said, adding, ”The revised law is expected to play a positive role in the national health insurance finances by accelerating the time to market generics.” However, some domestic pharmaceutical companies that own original products were not so quick to welcome the change. “Compared to the past, more domestic pharmaceutical companies have succeeded in developing original drugs. In the future, there will be more companies that own originals,” he said, adding, ”In such a situation, competition with other domestic pharmaceutical companies will inevitably intensify if the patent term is shortened.” 14-year upper limit wet on patent term after marketing authorization...will shorten the total patent term The Patent Act passed by the National Assembly has two main objectives. One is to place a cap of 14 years on the remaining term from the date of drug approval. Previously, the limit for extending the patent term was stipulated to 5 years, but there was no provision for a cap on the total term, including post-authorization patent extensions. On the other hand, the United States and China limit the effective patent term to 14 years and Europe to 15 years. The Korea Intellectual Property Office promoted the introduction of a cap on the effective patent term for equity and international harmonization with other countries. Even if a particular pharmaceutical company is granted a patent term of 20+5 years (normal patent term + extension period), the cap is set at 'up to 14 years from the time of marketing authorization, thus shortening the overall patent term. For example, Pfizer's ALK-targeted anti-cancer drug Xalkori (crizotinib) has a 14-year patent term in the U.S. after FDA approval. Due to this cap, Xalkori was only granted a patent extension of 1 year and 6 months (547 days) in the US. In Korea, however, there is no such cap, so Pfizer was granted a full patent extension. The patent extension period for Xalkori in Korea is 2 years and 10 months (1,034 days), which is about 1 year and 4 months (16 months) longer than in the US. 1One patent extension granted per item...favorable for generic companies The law was also amended to allow generic companies to choose only one patent to extend out of the many patents registered for a single drug. Generally, the original company registers as many patents as possible when developing a drug. A single drug may have more than 10 patents, including product patents, use patents, dosage forms patents, method and dosage patents, formulation patents, and crystalline form patents. The more patents a company has, the better it is to defend its product against generic challenges. This is why only one of the patents registered for a drug can be extended in the U.S. and Europe. For example, for the rheumatoid arthritis drug Xeljanz (tofacitinib), Pfizer applied for a patent extension in the U.S. for its product patent from among several patents. As a result, the patent term for Xeljanz became 20+5 years. In Korea, on the other hand, if multiple patents are registered for a drug, each patent can be extended. In fact, Pfizer applied for an extension (up to five years) for 2 product patents and 1 formulation patent in Korea. An overlap occurred when all 3 patent extensions were granted simultaneously. As a result, the patent term for Xeljanz in Korea is approximately 2 years (732 days) longer than in the US and Europe. The benefits to Pfizer of having 2 more years of Xeljanz patent term in South Korea are significant. For one thing, the company can avoid the price reductions that would come with the introduction of a generic version of Xeljanz. The price of the original drug was reduced by 70% in the first year and 53.55% in the second year upon the release of the generic, but Pfizer delayed this price cut by 2 years. By delaying the launch of the generic, the company can maintain its market monopoly for 2 more years. Considering how the annual sales of Xeljanz are around KRW 15 billion, Pfizer avoided a loss of KRW 12.8 billion + α for 2 years.

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