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IP Market for Pharmaceutical Products in Asia

This article looks to address 4 issues in relations to the IP market for pharmaceutical products in 4 Asean countries. 4 issues which will be address are: Whether the government purchases medicinal products and sets their prices such that a higher price will be set for a patented product; Working requirements of the territory; Enforcement provisions of the territory and Focus on the production of biosimilar/generic products in the territory.

Singapore

There is no specific regulatory control in matters of price regulation of pharmaceutical products. As such, government will not set or interfere with the prices for medicinal products for sale in the Singapore market. Market factors such as supply and demand of the product will be some determinants of price. However, health care in Singapore is subsidised by the government, wherein citizens are entitled to receive treatment and to buy drugs at a discounted price from public hospitals and polyclinics. There are no working requirements. However, s 55(1) of the Patents Act provides for an interested person to apply to the court for the grant of a license under a patent on the ground that the grant of the license is necessary to remedy an anti-competitive practice. There are relevant provisions under the Patents Act for an aggrieved person to bring an action for patent infringement to the High Court. Remedies which are avail to the plaintiff include the possible awardment of an injunction; monetary award; declaration that the patent is valid and has been infringed by the defendant; or an order for delivery up or destruction of the infringed product. Parallel import is accepted in Singapore but only under certain restrictive conditions. Importation of a pharmaceutical product is not allowed if the product has not previously been sold or distributed in Singapore before by or with the consent of the proprietor of the patent. Essentially, the patent owner has a “first mover advantage” in the Singapore market, but once he is in, he will have to compete with the parallel importers.

Malaysia

Malaysia practices a “free market economy” and a “price deregulation system” in which manufacturers, distributors and retailers set medicine prices without government control. The Malaysian Drug Control Authority, a regulatory body for pharmaceuticals, is not concerned with pricing. Its primary objective is to ensure the safety and quality of pharmaceuticals. Under such a system, market forces are expected to stabilise drug prices. There is no requirement for working a patent in Malaysia. However, non-working patents are subjected to compulsory licensing. In accordance to Section 49 of the Malaysian Patents Act 1983, compulsory license will not be granted if there is use of the patented product or application of the patented process in Malaysia. In addition, when a patent is not worked, a third party can apply to the Intellectual Property Corporation of Malaysia (MyIPO) for a license or rights. The Malaysian Patents Act provides for the owner of the patent to institute Court proceedings against infringers based on relevant grounds. If the owner of the patent proves that an infringement has been committed or is being committed, the Court shall award damages and shall grant an injunction to prevent further infringement and any other legal remedies. Parallel importation is allowable under the Malaysian Patents Act, with the consent of the owner of the patent. There is however, a heavy reliance on imported medicine as the local manufacturing industry is small. The production of patented medicine in Malaysia is largely through contract manufacture by a few local companies. The absence of technological capacity, high investment costs and heavy reliance on imported active ingredients have restricted innovative domestic research and development into the manufacture of generic products. Community retail pharmacies and private hospitals use patented medicines as marker of quality, thus further restricting the market for generic products.

India

In India, The National Pharmaceutical Pricing Authority fixes and revises the pricing of medicinal products. Essential drugs cannot cost more than twice the cost of production, and the maximum retail price and local taxes must be included in a drug’s final printed price. The price of a drug is negotiated between the manufacturer and the national authority, based on raw material costs, production costs, marketing costs and a reasonable allowance for profit. Indian Patent Office has recently issued a circular that proprietors are to submit a “Statement Regarding Working of Patented Invention on Commercial Scale in India – Form 27” annually. Failure to submit the information leads to the huge penalty of ten lakh rupees (about USD 21,000.00) prescribed under the Indian Patent Act, 1970. If the patented invention is not worked, any person interested can seek a compulsory license, 3 years from the date of grant of the patent. Chapter XVIII, Sections 104-115 of the Patents Act. The provisions of chapter XVIII are at par with the western world. Important provisions under this chapter deals with defences, reliefs, injunctions, damages or an account of profits, an order of seizure, forfeiture or destruction of the material, Anton Pillar Order and Interim injunctions. There is a very strong focus on the production of generic products in India. The Indian pharmaceutical industry is one of the world’s largest and are the world’s largest exporters of generic medicines.

Philippines

Generally, patented pharmaceutical products are priced higher than non-patented or generic ones. However, due to the enactment of the Generics Act of 1998, the government mandates that every drug manufacturing company operating in the Philippines shall be required to produce, distribute and make available to the general public the medicine it produces, in the form of generic drugs thereby lowering the cost of generic or non-patented pharmaceutical products as opposed to patented ones. As a result, patented products find it hard to compete in the market. The recently passed Cheaper Medicines Act of 2009 grants the President of the Philippines the power to impose maximum retail prices over any and all drugs and medicines listed under Section 23 thereof. Examples of drugs and medicines subject to price regulation include: (a) those indicated for treatment of chronic illnesses and life threatening conditions; (b) Drugs and medicines indicated for prevention of diseases; (c) those indicated for prevention of pregnancy; (d) anesthetic agents; (e) intravenous fluids; (f) drugs and medicines that are included in the Philippine National Drug Formulary (PNDF) Essential Drugs List; (g) and all other drugs and medicines which, from time to time, the Secretary of the Department of Health determines to be in need of price regulation. The Intellectual Property Code of the Philippines (RA 8293) does not require the patentee to commercialize or use the invention in the Philippines. As a matter of fact, there are many patent grantees who do not work their invention in the country. So long as the patentee pays the annuity payments required to maintain the patent, the same remains valid for a period of 20 years. However, the IP Code (RA 8293) provides for compulsory licensing of patented inventions, including pharmaceutical products. Compulsory licensing shall be granted by the Bureau of Legal Affairs of the Intellectual Property of the Philippines (IPO) in case of public non-commercial use of the patent by the patentee, without justifiable reason (Section 93.4) or if the patented invention is not being worked in the Philippines on a commercial scale, although capable of being worked, without satisfactory reason: Provided, that the importation of the patented article shall constitute working or using the patent. (Section 93.5) The IP Code (RA 8293) provides for the following enforcement actions against patent infringers: civil action and criminal action. A civil action may be filed with the court against any person making, using, offering for sale, selling or importing a patented product or a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorization of the patentee. A criminal action can be filed with the court for repetition of the infringement by the infringer or by anyone in connivance with him after the finality of the judgment of the court against the infringer. This criminal action prescribes in three (3) years from the date of the commission of the crime. The Philippines has a focus on generic products. As a matter of fact, under the Generics Act of 2008, the government mandates that every drug manufacturing company operating in the Philippines is required to produce, distribute and make available to the general public the medicine it produces, in the form of generic drug.

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