1 May 2011AmericasOtto Licks and Anderson Nascimento

The Brazilian pharmaceutical sector: a year in review

Brazil had no patent protection for pharmaceutical inventions until 1994. The TRIPs Agreement, incorporated in 1995 and the Patent Law, approved in 1996, provide patent protection for pharmaceutical inventions.

Despite this positive background and a strenuous patent examining procedure, the Brazilian Patent and Trademark Office (INPI) has a backlog of approximately 11 years, and there is uncertainty concerning INPI and the Brazilian Food and Drug Administration’s (ANVISA) roles in the prosecution of pharmaceutical patents. While the situation at INPI deteriorates, the courts have provided a means to obtain effective patent protection.

The courts are getting less intolerant and more welcoming to assess IP demands, and patent owners should seize the opportunity to look forward to future decisions applying the rule of law.

Non-obviousness

On October 26, 2010, the Federal Court of Appeals for the 2nd Circuit upheld a lower court decision, which nullified INPI’s decision reconsidering the grant of a patent alleging its obviousness and declared the patent valid.

The core of the litigation was whether the simple reduction of the molecule in question would impair non-obviousness (since merely reducing the size of the molecule would be a procedure that is known in the state of art) and whether the judges would have to rely on the court-appointed expert’s opinion or could challenge it.

The panel established by majority that the nonobviousness was not related to the reduction of the molecule per se, but to its unexpected result. One of the appellate judges said that although the molecule was known and successfully marketed, there was a technical problem to be addressed concerning the adverse reactions of some patients. This problem, then, made the company seek to improve its safety and efficacy, which was achieved by an unpredictable reduction of the molecule.

Furthermore, Judge Roriz said that, in her opinion, INPI should not reconsider its own opinion on the non-obviousness requirement in light of the same set of prior art documents. According to her, unless there is new evidence or a clear error, the administrative authority should not have to change its opinion.

ANVISA prior approval

For the last 12 years, a controversy has developed concerning the role of ANVISA in the patent examining procedure of pharmaceutical products. Back in 1999, ANVISA’ s prior approval requirement was established for patent applications claiming “drugs of any kind, and the respective process for obtaining or modifying them”.

Since then, there have been controversies about: (i) for which kinds of patent applications (ordinary, pipeline or both) prior approval is mandatory; (ii) from when it is mandatory; (iii) the objective standards that should guide ANVISA’s examination; (iv) possible overlaps between ANVISA’s and INPI’s examination; (v) the procedure to be adopted when those agencies’ opinions conflict; and (vi) whether ANVISA’s role should be limited to public health concerns, among others.

In the past 12 months, relevant case law has clarified a few points. On April 27, 2010, the Federal Court of Appeals for the 2nd Circuit rendered a landmark ruling on an appeal challenging ANVISA’s opinion analysing patent requirements. In that decision, the panel decided that despite ANVISA’s mandatory participation in pharmaceutical patent examination, it would be unreasonable or inefficient to believe that the legislator would have established that ANVISA should assess the existence of patent requirements already examined by INPI, as set forth in the IP law.

It also states that the reasonable interpretation of the provision suggests that ANVISA should render its opinion concerning public health concerns. Nonetheless, according to the decision, ANVISA should be able to provide INPI with relevant information related to the patent requirements of an application. In general, the decision concluded that the agencies’ roles are complementary, since they must focus on different aspects.

On June 21, 2010, the Federal Court of Appeals for the 1st Circuit issued a decision on this matter. At the lower level, the federal judge denied the injunction requested against ANVISA’s opinion analysing patent requirements, which prevented the granting of the patent in spite of INPI’s favourable decision. In its decision, the court panel ordered ANVISA to re-examine the application, restricted to its legal responsibilities, i.e. public health concerns.

It is also worth mentioning three favourable rulings of federal courts in Brasilia concerning the issue. The first, issued on August 26, 2010, ordered ANVISA to grant its prior approval to a patent application if it has no public health concerns to raise on that case.

The second, issued on January 12, 2011, went further and declared the unconstitutionality of the prior approval provision, since it establishes an unnecessary re-examination of pharmaceutical patent applications, breaching Article 4 of the Paris Convention. The third, related to the first, declared ANVISA in contempt of court and established a fine of approximately $125,000.

Data package exclusivity (DPE) enforcement

Brazil explicitly infringes DPE rights, in spite of the legal framework providing protection by Article 195, XIV of the IP Law and Article 39.3 of the TRIPs Agreement. Although the first provision established that the disclosure, use and exploitation of a human drugs data package presented to ANVISA by the originator company by unauthorised third parties is an act of unfair competition, it does not indicate a term for such an exclusivity.

“THE REGULATION MAY LEAD TO DPE INFRINGEMENT AND VIOLATION OF THE CONSUMER LAW , AS THE CONSUMER IS NOW VULNERABLE TO PRODUCTS THAT HAVE NO UNEQUIVOCAL PROOF OF EFFICACY AND SAFETY FOR ALL THE APPROVED THERAPEUTIC INDICATIONS.”

Law 10,603/2002 limits protection afforded by the statutes approved in the 1990s that established a term of data package protection for veterinarian drugs and agrochemicals of 10 years for active ingredients never approved before the authorities and five years for data packages of active ingredients previously approved in Brazil entailing data concerning new therapeutic indications. The same law established compulsory licences and antitrust defences.

On May 9, 2011, Brazil had its first final decision on the merits in a litigation seeking the enforcement of DPE rights concerning an originator’s drug for human use. In this decision, the Federal Court recognised that in the marketing approval proceeding based on bioequivalence and other comparative tests, there was an undisputable reliance on the originator’s data package.

However, considering the lack of a specific provision fixing a term for DPE for human drugs, the federal judge observed that it would be unreasonable to establish the exclusivity for good. Therefore, he decided by analogy, that the term applicable to veterinarian drugs should be applicable to the current case and granted 10 years of DPE for the originator company.

The relevant parts of the decision reads as follows: “ANVISA denies, above all, the breach of confidentiality of the [non-disclosure agreements’] data package and the utilization of such data, stating that such information is not necessary to grant the generic drugs’ marketing approvals, because the bioequivalence and bioavailability tests would be sufficient to that end, as the security, efficacy and quality of the substances contained in the generic and similar drugs have been already proved by the reference drug.”

It must be stressed that what is discussed here is not the simple prohibition of physical access or consultation by third parties to the data package submitted by the plaintiffs and under ANVISA’s responsibility, and therefore the use of such information to produce and obtain a marketing approval for the generic version of the reference drug produced by the plaintiffs.

Initially, it is necessary to underline that the right to protection of trials and data submitted to the governmental agencies to obtain marketing approval is set forth in Section 7, Article 39 of the TRIPS Agreement.

ANVISA argues in its defence that it “did use the data package provided by the owner of the reference drug, be it in [an] analytic, comparative, interpretative or exploratory meaning. At most, there was a presumption (based on logical inference) that it would be unnecessary and unjustifiable to require such data to be submitted once again”.

This argument, however, does not withstand a logical analysis.

If the owner of the marketing approval to the reference drug had not submitted its tests, there would be no possibility to exempt the producers of generic and similar drugs from the presentation of their own tests to evidence the safety, effectiveness and quality of the drug.

Thus, the data package of the reference drug is an indivisible part of the causal chain that allows the waiving of tests by the producers of generic and similar drugs.

The semantic analysis of the verb ‘to use’ also rejects the conclusion made by ANVISA. This word has the following meanings: employ, usefully take, enjoy, exploit, be useful or helpful, take advantage.

All of these meanings converge with ANVISA’s conduct, because it is undeniable that ANVISA used, employed and exploited the results of the tests previously presented in order to grant generic and similar marketing approvals. The law only authorises disclosure by the government of this confidential information “when necessary to protect the public”.

In this case, the use of the results of the tests presented to grant marketing approval for the reference drug is not intended to protect the public, but only exempt laboratories that want to register generic and similar drugs from presenting tests that would demonstrate the safety, effectiveness and quality normally required for everybody who wants the marketing approval for a new drug. Therefore, there is no doubt that ANVISA used the results of the tests performed by the plaintiffs to grant the marketing approvals to the defendants.

The necessary tests to have a marketing approval granted for a reference drug are the result of considerable effort and investment of economic resources, besides years of research, to ensure compliance with the requirements for marketing approval of the reference drug—effort that is not required from the laboratories that want generic or similar marketing approval.

Rules for marketing approval of biosimilar medicines in Brazil next to reach courts

On December 17, 2010, ANVISA issued regulation no. 55/2010, establishing the requirements for granting marketing approval to new biological products and existing biological products, opening a new chapter regarding Brazil’s lack of enforcement of DPE.

A request for marketing approval of biological products (not new) can be made in two different ways: individual development and development by comparability. When applicants opt to develop by comparability, they must submit a comparative dossier containing non-clinical and clinical studies used to demonstrate comparability between the biological product to be approved and the biological product used as a comparator.

The regulation may lead to DPE infringement and violation of the consumer law, as the consumer is now vulnerable to products that have no unequivocal proof of efficacy and safety for all the approved therapeutic indications.

Bearing in mind all the recent developments cited above, one can see that Brazil’s deficient IP rights enforcement is on the verge of change. IPR owners who consider investing in Brazil should realise that its future will be set by these decisions and should not hesitate to seek enforcement.

Otto Licks is a partner at Momsen, Leonardos & Cia. He can be contacted at: oblicks@leonardos.com.br

Anderson Nascimento was recently an associate at Momsen, Leonardos & Cia. He can be contacted at: arnvancouver@gmail.com