Pharmaceutical and Biotech Lifecycle Management (II)

This is the second in a series of articles on Pharmaceutical & Biotech Lifecycle Management, the first article looked at whether generics are launching earlier than ever.

The series comes from a pilot study I put together to test some views on the
factors which affect success in the ongoing war between ‘innovator’ and
‘generic’ companies. In this article I look at how early non-innovator companies are filing patents covering a drug and the effect that this has on the period of monopoly for the drug.

Please join the discussion about this article at the equivalent
blog post at IP Thinktank
.

Background

The
study looked at 15 of the globally top selling pharmaceutical products
on the market today to identify possible trends which might explain,
and potentially predict what can be done to affect the length of
monopoly. Future articles will explore some of the other interesting
findiings, and provide updates as more data and aspects of lifecycle
management are analysed. (Raw patent filing data was supplied by the
team at GenericsWeb.)

Other people are filing patents incredibly early

There’s a pdf document with three slides which accompanies this article – you can find it at – http://thinkipstrategy.comarticles/141/Pharmaceutical-and-Biotech-Lifecycle-Management-(II).

Slide 1 shows the time from marketing authorisation until the first non-innovator patent is filed. By ‘non-innovators’ or ‘3rd party’, I mean companies other than the innovator for that particular drug.

The yellow markers each represent a different product. The X axis shows years of monopoly that the innovator has obtained in each instance while the Y axis shows the number of years away from Marketing authorisation.

The first thing to note about the slide is that the values are all negative. That’s right – other people are filing patents covering a new pharmaceutical product before the innovator obtains Marketing Authorisation.

The second thing to note about Slide 1 is that there seems to be a reasonable trend upwards and to the right. In other words, the longest monopolies went to those products for which there was minimal delay between 3rd party patent filings and Marketing Authorisation. (Presumably this trend would continue above the X axis – so that a product for which there are no 3rd party patents prior to marketing authorisation would obtain a still longer monopoly – 25 years?)

Slide 2 shows the years from the priority date of the first API patent covering the molecule until the 1st non-innovator patent filing. The axes are the same as slide 1.

The clarity of the trend is less clear here – but there seems to be a suggestion that a delay in the filing of 3rd party patents enables a longer period of monopoly.

For those who have picked it up – yes there’s an apparent anomoly in the graph – there are negative values – some 3rd party patents were filed before the original API patent. How could this happen? These are drugs which are second or third generation – so that earlier class-covering patents (for formulations, synthesis or medical methods) also cover the new molecule.

Slide 2 is another reminder as to why second or third generation drugs seldom have a very long period of monopoly. (Of course, they are often commercially very valuable notwithstanding this.)

Strategy
Is there a direct link between the date at which a 3rd party files a patent covering a new pharmaceutical and the years of monopoly that can be expected for that product?

Probably not.

Interestingly based on some other findings in the same study (to be
discussed in a future article), it appears as though an accumulation of
3rd party patent holders (especially early on) tends to reinforce the
innovator’s monopoly and not detract from it. So the timing for the
first 3rd party patent is not about this.

However, 3rd party patents are an indicator of the research activity being undertaken by other (usually sophisticated) entities in relation to the product. The earlier they become sophisticated about that product, the more likely they are to be able to successfully deal with any patent barriers put up to sustain a monopoly.

What to do?
Innovator companies should consider how they might delay the time until 3rd parties commence filing patents covering the new molecule. This may mean carefully (even more carefully?) screening company announcements, marketing materials, journal articles and other publications for a set period – even up to marketing authorisation. Public listing disclosure rules and the marketing department will obviously hamper the ability to do this, but my suggestion would be to at least consider it.

These findings tend to reinforce the trend by generic companies towards searching for and developing generic versions of products earlier in their lifecycle than would have been done in the past. The trick of course is to balance this against the investment required and the risk that the product will not be successful on the market. This is obviously particularly important given that the earliest patents are being filed before Marketing Authorisation.

Notes:

The
distinction between ‘innovator’ and ‘generic’ companies is rapidly
disappearing. Many traditional ‘innovator’ companies have their own
generic subsidiaries, and of course will routinely allow authorized
generic products. Similarly, the larger ‘generic’ companies are
increasingly engaging in drug discovery and coming up with their own
new chemical entities, and / or in-licensing products from smaller
firms, etc.

This pilot study was designed to generate discussion,
and so it has not been designed to be statistically bullet-proof.
Consequently, you will not see R squared values on any of the lines of
best fit – there are only 15 data points so far.

Iin this
study, ‘years of monopoly’ was defined as time from first marketing
authorisation in any country, until launch by a generic company in any
country. (As we all know, the monopoly increases over time as marketing
authorisation is granted in each country, and then decays over time as
generic competitors are able to launch in new countries. So the measure
used in this study is an indicator but not equivalent to the actual
monopoly gained.)

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