First generic release isn't related to original price cuts

Supreme Court of South Korea, Zyprexa-related lawsuit, concluded after 10 years

Hanmi·Myungin won the final victory, expecting to maintain the strategy for early generic release

The Supreme Court of South Korea finally ruled that the company that launched First Generic due to the success of its patent strategy had no reason to be responsible for lowering the drug price of the original drug.

 

The results of the Zyprexa (Olanzapine) lawsuit came out after 10 years.

 

The result of this lawsuit received great attention from domestic companies in that the strategy for early release of generics was decided.

 

On the 26th, the Supreme Court's Civil Affairs Division dismissed Lilly's appeal in a lawsuit against Hanmi for drug price cuts.

 

The Supreme Court's Civil Part 3, which was held at the same time, also took the side of Myungin in a lawsuit for damages that Myungin filed against Lilly Korea.

 

This complicated lawsuit, which has lasted more than 10 years, began in 2008 when a trial was filed for invalidation of the patent for Lilly's schizophrenia treatment Zyprexa.

 

At that time, Hanmi claimed Zyprexa's patent invalidation trial and won the second trial, and then released Olanza, generic for Zyprexa in 2011.

 

Myungin, which confirmed this judgment result, later released Neurozapine, generic for Zyprexa, too.

 

However, the Supreme Court overturned the second trial, and Lilly filed damages to both companies (Hanmi and Myungin) on the basis of this.

 

It was intended to compensate for the profits obtained from selling generics.

 

However, Lilly also filed a lawsuit against Hanmi and Myungin to compensate for damages as the drug price of Zyprex was lowered due to the release of the generic.

 

It was the first in Korea to claim damages for the price cut of the original drug.

 

The cost of the lawsuit was ₩1.5 billion to Hanmi and ₩47 million to Myungin.

 

In this case, Hanmi won both the first and second trials, but Myungin lost both.

 

Regarding Hanmi, the court ruled in favor of both the first and second trials, saying, "Hanmi released the generics through a legitimate patent challenge, and the drug price cut is due to exercise of the discretion of the MOHW and no causal relationship is formed.

 

On the other hand, for Myungin, the court ruled against defeat with the effect of "since it released generics after recognizing the drug price cut of Zyprexa, it must compensate for the damages caused by the drug price cut." In 2016, Lilly appealed to Hanmi and Myungin appealed to Lilly.

 

The Supreme Court's ruling on this day is the final result of a lawsuit that has been going on for the past 10 years.

 

It is the first lawsuit in Korea to dispute whether or not to compensate for the price cut of the original drug, and as a result of this, the first-generic strategy of generic pharmaceutical companies itself could collapse, which attracted great attention from the industry.

 

In fact, if domestic companies lose, they could suffer from cost cuts of the original product, which could amount to tens of billions of billions of won.

 

However, the final decision of the Supreme Court provided an opportunity for domestic pharmaceutical companies to actively pursue patent challenges for the early release of generics.

 

Kim Yoon-ho, chairman of The KPPI (Korea Pharmaceutical Patent Institution), said, "We have completely escaped from a situation where domestic companies' patent challenges for the launch of first generics may be reduced." In particular, he said, "It is a meaningful decision that not only establishes an active patent strategy, but also reduces the burden of health insurance finances and drug costs for patients."