Room for improvement: enforcing data exclusivity provisions in Mexico

Data exclusivity is usually discussed in academic circles, mainly due to enforcement complexities and when cases are brought against the Federal Commission for the Protection against Sanitary Risks, the government branch in charge of issuing of marketing authorisations for drugs and agrichemicals.

However, data exclusivity protection is a crucial element for securing marketing exclusivity for both the pharmaceutical and agrichemical sectors, especially for orphan drugs and also for molecules the patent protection of which may be compromised in some manner, or simply unavailable.

For that reason, data exclusivity is a topic which appears regularly in the negotiation of bilateral and multilateral international treaties,including IP clauses, to which Mexico is a party.

Since the entry into force of the North American Free Trade Agreement (NAFTA) agreement, data exclusivity protection has been part of the Mexican legal framework, since international treaties are considered as law of the land (lex terrae) by Constitutional decree.

Moreover, taking into consideration that ‘most favoured nation’ clauses are commonly included in most multilateral and bilateral IP agreements, data exclusivity has been available in Mexico to companies and enterprises from almost every country.

Furthermore, modifications to the Health Supplies Rules and the Industrial Property Law have brought the protection to the Federal level, theoretically outlining what COFEPRIS should do to protect and enforce such an important exclusivity right.

However, due to the amplitude and vagueness of the law, data exclusivity was extremely complicated to enforce, mainly because of the confidentiality surrounding the dossier and also since only the authorities and its owner have access to it. Additionally, protection was only granted for new chemical entities, leaving aside formulations, orphan drugs and particularly biotech drugs, which due to their very nature rely heavily on data exclusivity protection for dividends.

For the better part of a decade, the pharmaceutical and the agrichemical industries have expected modifications to the Mexican legal framework in favour of better protection for their products and for obtaining valuable market exclusivity.

However, the Mexican authorities have been focused on different issues and data exclusivity protection has been largely unnoticed. As a consequence, both industries have approached the issue by implementing different strategies, hoping to find a viable solution.

Mexico’s inclusion in the negotiations for the Trans-Pacific Partnership Agreement (TPP) in 2012 prompted great expectations for enhanced IP protection, particularly within the pharmaceutical industry. In fact, several modifications regarding the Mexican IP framework had to be negotiated and implemented in order for Mexico to gain membership status as a negotiating partner of the TPP.

"Very much like the drugs for which we seek protection, a legal strategy suitable for one molecule may have to be tailored to fit another one."

Some improvements or modifications came last year, when COFEPRIS issued internal guidelines for the treatment of new drug applications (NDAs) claiming data exclusivity protection.

Due the cumbersomeness of the guidelines as well as their limited scope of application and narrowness of subject matter, however, it is highly unlikely that they will improve the legal landscape in Mexico. In fact, the guidelines will only cause lengthy trials and more uncertainty among the industry.

Navigating the current legal framework

Given the current state of regulatory matters, pharmaceutical companies have explored different strategies in order to secure exclusivity for their products within current legal boundaries. Among such options, obtaining preliminary injunctions through litigation to block the issuance of marketing authorisations for abbreviated new drug application (ANDAs) by COFEPRIS appears to be the most successful road.

Evidently, the goal should be the development of a legal strategy aimed at obtaining a result, not plain litigation against faulty guidelines. Special care should be taken when considering the moment to set the strategy in motion, since preliminary injunctions may be lifted as the process moves forward.

Therefore, information about the ANDA process is required to calculate a date of approval and publication, which in turn should take into consideration private and/or government bids in order to reap the most from the strategy.

Expert knowledge of the applicable legal framework and related precedents is required, since careless or inappropriate injunction requests could inadvertently cause civil damages that may render the whole strategy useless.

Evidently, there is much more information and special legal circumstances that have to be taken into account. Very much like the drugs for which we seek protection, a legal strategy suitable for one molecule may have to be tailored to fit another one.

This firm has handled cases with different variations of the above-mentioned strategy and the overall results have been satisfactory, if not definitive, since litigation is still ongoing. The combination of IP and regulatory litigation strategies when the case allows it offers other courses of action which in turn could legally block the effects of the granting of an ANDA, allowing the innovator product to obtain market exclusivity for a term which may range from one to six months.

As mentioned earlier, it is very important to carefully calculate the timing and also, the grounds to file and request an injunction and the merits of the case, due to the fact that the window may close earlier than expected if those variables and the particularities of the case are not adequately accounted for. Special care should be taken regarding the damages that may be inflicted upon third parties and also, the risks of further civil litigation.

The current state of Mexican legislation undoubtedly allows for data exclusivity protection. Modifications to the corresponding legal dispositions in order to enhance, clarify and organise the terms, effect and purpose of data exclusivity protection are highly desirable and Mexico may have them in the near future due to the TPP and other multilateral IP agreements.

Last year’s guidelines for the implementation of data exclusivity protection are not a viable option for adequate protection of pharmaceutical and agrichemical products and may very well cause more litigation and headaches than the legal framework before their publication.

However, the guidelines are the result of lobbying and international pressure over the Mexican government to develop a suitable legal regime for the protection of IP assets. The TPP negotiations may soon bring to the Mexican legal system new developments regarding data exclusivity, patent term restoration and adjustment, and such changes may foster the development of new products for the Mexican market.

In the meantime, the pharmaceutical and agrichemical industries may find that innovative strategies and expert legal advice will definitively assist them in the protection of their assets in Mexico.

Jose R. Trigueros is a partner at Leyva, Montenegro, Trigueros Abogados SC. He can be contacted at: jtrigueros@lmt.mx