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Pharmaceutical intellectual property disputes are an ongoing issue in Ukraine, where millions of citizens struggle to afford certain critical medications.
It’s relatively easy to keep extending a drug patent — and its monopoly. It’s harder to challenge these patents or bring cheaper generics to the market. The past few years have seen multiple legal disputes against multinational pharmaceuticals. Legislation from last year that proposed raising the patentability bar failed after not getting enough votes in the Verkhovna Rada, Ukraine’s parliament.
In December, the Cabinet of Ministers revived the legislation. Public health advocates hope to advance it in the next Rada, with the help of the next Cabinet.
“When this legislation passes, it will be a very major breakthrough, because in the world there are few countries that have this kind of (intellectual property) policy concerning medication,” said Inna Boyko, director of patients’ rights group Patients of Ukraine.
Ukraine’s own pharmaceutical industry is growing quickly, now controlling 38 percent of the total pharma retail market value in a roughly $3-billion industry, according to Darnitsa. Ukrainian companies have the ability to produce advanced generics. Many existing generics are available for import from other countries.
However, some advanced medications are restricted to the original patent holders, putting them outside the price range of millions of Ukrainians and costing the state billions of dollars. This is especially true for treatments for serious illnesses like HIV, cancer, hepatitis, tuberculosis and others. Balancing innovation against public health will be a major challenge for the incoming government.
“The leadership [of Ukraine] lacks consensus and a general vision regarding the direction of the development and function of the intellectual property system,” said Mykyta Trofymenko, intellectual property counsel with CO “100% LIFE”, Ukraine’s largest pro-patient NGO.
NGOs and health officials hope to change this, backed by United Nations organizations. This year, Ukraine is set to draft its intellectual property strategy, with the hope of large-scale reforms.
Background
Like most countries, Ukraine is a signatory to the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Some of Ukraine’s intellectual property, or IP, rules are more restrictive than other countries’.
For example, Ukraine uses patent linkage, which shifts the burden of defending patent monopolies from the holder to the government. “[Patent linkage] hangs like a Sword of Damocles over the generic applicant,” said Oksana Kashyntseva, a legal expert with Patients of Ukraine.
The country also extends the normally 20 year patent terms by up to 5 years, based upon how much time passed between filing the patent and getting market authorization. The European Union has a similar provision.
According to the Ukrainian pharmaceutical company Darnitsa and law firm Aequo, sales of medicine in Ukraine in 2018 added up to $3.1 billion. Many Ukrainians struggle to afford more expensive medications, especially ones that are patented by multinational pharmaceuticals. (Courtesy)
Still another provision is data exclusivity, which restricts the availability of the original drug’s clinical data. This effectively cuts off generic producers’ ability to register a biosimilar product for a number of years. The EU’s data exclusivity period is the longest in the world — up to 10 years. Ukraine’s association agreement with the EU includes this provision.
The company Gilead Sciences used data exclusivity to prevent a generic version of the hepatitis C drug Sofosbuvir from being marketed in Ukraine for several years, even though the generic manufacturer filed its application before Gilead did for its brand name drug, Sovaldi.
The EU is currently reviewing some of these rules after protests in multiple member countries. Ellen ‘t Hoen, a policy expert and public health advocate, suggested that Ukraine can use a waiver to get around this requirement or risk being stuck with this rule even if the EU relaxes it.
TRIPS provides flexibilities to safeguard public health. The best-known one is compulsory licensing — the government forces a patent holder to issue a license to a generic producer, who pays a licensing fee. However, experts told the Kyiv Post that Ukraine never even came close to using this method. International pharmaceuticals have been known to retaliate against countries that try to use compulsory licensing by pulling production or imports.
Patentability, evergreening
Patents protect the intellectual property of innovators and, without them, there would be no incentive to create new medical inventions. However, not all innovation is created equal.
Evergreening is a controversial practice where pharmaceuticals take an existing medication, make a slight tweak (such as changing the dosage) and try to apply a secondary patent — presenting the drug as a completely new substance.
“Evergreen patents remain a serious problem,” said Trofymenko. “Patents for many drugs that are the most expensive in Ukraine, by volume of purchase, are evergreen.”
Even developed countries have seen a trend toward secondary patents in the past several decades. A 2018 study in the U.S.-based Journal of Law and Biosciences found that 78 percent of drugs associated with new patents in the U.S. were previously existing ones. However, secondary patents cause the biggest challenges in developing countries.
Trofymenko’s group, CO “100% LIFE”, fought multiple pharmaceuticals over their patents, which many NGOs say don’t meet innovation criteria.
Evergreen patents had denied Ukrainians the ability to afford cheaper generic versions of antiretroviral drugs for HIV, breast cancer and leukemia treatments and antibiotics for tuberculosis and many other substances. They also drained huge sums of money from the state budget.
Law lessons from abroad
Ukraine’s 2018 patent legislation intended to make it harder to get a secondary patent on an existing drug. It would also relax the data exclusivity provision. Finally, it would have excluded drugs from a list of inventions that could be protected as “utility models” — a patent-like protection with lower standards and shorter protection periods.
The bill failed to get the amount of votes it needed in September 2018. A new version of the bill was registered in December and approached committee reading in April. Patients of Ukraine told the Kyiv Post that the presidential and parliamentary elections interrupted progress. They plan to push the legislation forward this fall.
There are lessons Ukraine can learn from other countries that had previously adopted similar legislation. India became one of the first countries to raise patentability standards and reject applications without significant innovation with the active ingredient. Global pharmaceuticals challenged and ultimately failed to overcome this legislation, which helped India become the pharmacy of the developing world.
However, since India was among the first, it was afraid of overstepping TRIPS and its law is riddled with unnecessary complications and dependent clauses. This makes it much harder to implement and allows loopholes for pharmaceutical companies to exploit, according to Achal Prabhala, an international activist and researcher who works on pharmaceutical IP. The country should be rejecting over 80 percent of patent applications. Instead, it rejects about 40 percent.
“They don’t understand their own law,” said Prabhala, referring to Indian patent authorities. He said that the lesson for Ukraine is to make its version of the law simpler and easier to implement.
A much better example to follow is Argentina, which also adopted strict guidelines on patentability, but in a tighter way. This law does not contain the ambiguities and technicalities that secondary patent applicants can exploit in other countries. Argentina’s anti-evergreening resolution is “considered an example worldwide in terms of public health perspective,” wrote IP researcher Marcela Vieira.
According to research by Columbia University, Argentina is one of the few countries which grants significantly fewer secondary patents than primary ones. Vieira added that Argentina was granting less than five percent of submitted patents, several years after the guideline was introduced.
All this allows Argentinians access to more medicines at lower prices and keeps companies from littering the market with monopolies. However, Argentina is facing down multiple legal challenges to its patent system. Experts said this kind of pressure is ubiquitous in developing countries, including Ukraine.
“There is considerable external pressure from business associations, which lobby the interests of large pharmaceutical companies,” said Trofymenko.
Pharmaceutical companies use exclusive patents on drugs to charge prices that Ukrainians cannot afford. To extend their monopolies, pharmaceuticals make slight changes to their drugs to patent them anew.
Expertise shortage
Like many developing countries, Ukraine lacks the resources and expertise in its patent authority, Ukrpatent. Ilarion Tomarov, a lawyer with the firm Vasil Kisil & Partners said that patent reviewers don’t thoroughly review applications.
“In Ukraine, the reason for evergreen patents isn’t so much in its legislation, as it is in the quality of the expertise,” he said.
As a result, it is much easier to get a patent than to challenge one. Once the patent is granted, challenges by generic competitors or patient groups require a minimum of two and a half years in court. The court has to assign an expert to review the claims, which takes a long time. Then, if the case goes to appeals and cassation, more years pass and, in the meantime, generics can’t reach the market.
A better way to improve expertise could be to apply a model like that of Brazil. Besides Brazil’s patent authority, its Ministry of Health also takes part in reviewing pharmaceutical patent applications. Three years ago, the health ministry had to give consent for the patent to go forward.
“The expertise that was built in the regulatory authority agency, bringing it to the table increases the quality of the patents that are granted and reduces the chances of getting unmerited patents granted,” said Vieira.
Patients of Ukraine’s Kashyntseva agrees: “This is a super idea.”
Earlier in June, multiple patent officials and advocates met in Ukraine. At the conference, the Ministry of Health of Ukraine said that it would be willing to step in and participate in pharmaceutical patent reviews.
