The contradiction of generic exclusivity

21 companies sold at same time

Even after obtaining the right, 4 out of 10 products have not been released.

Average ₩400 million for 9 months per item

Let's imagine!

 

This is the case when the rule for '1st place' in a marathon is set to be '14 seconds after the first goal scored'.

 

Competition will become meaningless, and only fights will increase.

 

The achievements of legitimate efforts that the first place should receive will be shared by numerous 'joint first prizes'.

 

The controversy over the generic exclusivity system is similar.

 

Due to the regulation that suppresses discrimination, the 'contradiction of common first place' is prevalent.

 

It is often observed that up to 45 items receive the right at the same time, and the product is not released even after receiving the right.

 

As the circumstances look like this, the profits from obtaining generic exclusivity are very small.

 

It is calculated that each item is limited to ₩400 million for 9 months.

 

This is the reason why criticism is constantly raised for promoting free rides over the current system.

 

It is also the reason why the pharmaceutical industry is regretting about the government's revised right.

 

◆5 years of introduction of the rights, benefits average ₩400 million for 9 months The generic exclusivity system was introduced in earnest in 2015.

 

The purpose of the introduction was to provide benefits for the efforts of active pharmaceutical companies in the development of generics and patent challenges.

 

However, as of five years later, most pharmaceutical companies with the generic exclusivity do not benefit.

 

Dailypharm surveyed the prescriptions of products with generic exclusivity since 2015.

 

The average prescription amount for 9 months during the sales period was only about ₩400 million.

 

According to the MFDS, as of the end of August 2020, 140 generics were launched on the market within the generic exclusivity period.

 

The prescription performance of these items during the period was ₩59.3 billion.

 

It is calculated that the average prescription amount per item (₩59.3 billion ÷ 140 items) is only ₩420 million for 9 months.

 

Although there is a difference in the size of the market and the loyalty of the original for each item, criticism has been raised that it is not effective given the nature of the generic exclusivity.

 

In particular, as the number of pharmaceutical companies that jointly acquire the generic exclusivty, the benefits to each pharmaceutical company decrease.

 

This is why pharmaceutical companies, which have led the patent challenge, are complaining that it is 'free ride'.

 

In the case of generics for Amosartan (Amlodipine+Losartan), 21 companies received the right of the generic exclusivity with 45 items.

 

Of these, only 12 (57%) launched products during the period.

 

12 pharmaceutical companies only produced a total of ₩1,160 million during the period (May 9, 2015 to April 1, 2016).

 

This is less than ₩100 million per pharmaceutical company.

 

If the rights were monopolized by one pharmaceutical company rather than 21 pharmaceutical companies, it is expected that the results would not have reached ₩100 million.

 

The rest of the products are similar.

 

In the case of generics for Layla, out of the 14 companies that received the right, only 10 launched the product within the period, and they only recorded an average of ₩430 million during this period.

 

13 companies for generics for Viread received the right, but only 11 companies released the product within the period.

 

The company that launched the product produced an average of ₩370 million per company.

 

Nine companies challenged generics for Feburic, but only 8 released products, and they only achieved an average of ₩79 million won per company.

 

On the other hand, items with fewer competitors tended to have more profits from generic companies.

 

Hanmi alone challenged the patent for Patanol eye drop (Olopatadine)' and received the right of the generic exclusivity as a generic called Olotadine.

 

During the period, Hanmi recorded ₩1.35 billion in prescriptions.

 

Dong-A ST challenged the patent for Dilatrend (Carvedilol) and received the right as a generic called Vasotrol.

 

During the period, Dong-A ST produced a prescription record of ₩990 million.

 

◆Generic for Amosartan, In addition, the mess of the generic exclusivity is observed in many products.

 

As of the end of August 2020, there are 387 items that have acquired the right of copyright.

 

Excluding items with different capacity in the same lineup, it is calculated that 244 products have received the right.

 

There are 42 original drug patents that these 244 products have overcome.

 

It means that one original product has an average of 5.8 generics and received the right.

 

This trend is observed to be more frequent in larger items.

 

In the case of Amosartan, 21 pharmaceutical companies received the right for 45 items.

 

It means that only 21 people are tied for first place.

 

Other products are also very similar.

 

Most recently, on the 25th of last month, 13 pharmaceutical companies received rights with 21 items on Forxiga (Dapagliflozin).

 

In 2016, Januvia (Sitagliptin) acquired 22 items from 10 companies, and Janumet (Sitagliptin + Metformin) acquired 33 items of 11 companies.

 

14 companies and 10 companies, respectively, succeeded in acquiring the right for natural drugs, Stillen 2X and Layla.

 

◆Even after winning the right, half of them were not released within the period.

 

Why? Although many pharmaceutical companies flocked to acquire the right of the generic exclusivity, it is also confirmed that not many pharmaceutical companies actually launched the product.

 

As of the end of August of this year, there are a total of 255 items that have reached the right sales period or are currently in use, of which only 140 items have actually released products to the market within the right sales period.

 

Only 5 out of 10 products (54.9%) that received the right copyright have put products on the market.

 

There are many reasons for not releasing a product even after obtaining the right through patent disputes.

 

The reason is that it won the right, but failed to prove bioequivalence for the release of generics, felt a burden as the patent dispute with the original company passed to the second or third trial, or judged that it was not marketable.

 

However, it is easy to obtain the right of the generic exclusivity as the number of requests for trial increases.

 

◆Initial request for trial '14 days' It was introduced in 2015.

 

With the conclusion of the Korea-US FTA, the licensed patent linkage system was introduced in 2012, and the system that grants monopoly rights to patent challenge generics through step-by-step enforcement procedures was also revealed.

 

All three requirements must be met in order to obtain the right of copyright.

 

First, it is necessary to first request a trial (confirmation of invalid or passive scope of rights) for the original patent.

 

Second, it must win the patent trial raised in this way.

 

Third, it is necessary to first apply for approval for generics.

 

Acquiring the right seems tricky because all three conditions must be completed, but it is not.

 

This is because the clues are attached to the first requirement, the request for an initial trial.

 

Under the current law, it stipulates that 'company that makes a claim within 14 days after the initial request for a judgment is also recognized'.

 

This regulation causes the contradiction of the joint first place.

 

After winning the referee, the day after the end of the PMS (reexamination), a bunch of applications for permission continued.

 

It was common for dozens of companies to be bound by consignment and got the right at the same time.

 

The first request for judgment became a ticket for the sale of generics.

 

It is not known exactly why the '14 days' rule in question was included when making the law.

 

Some say that this is because the time it took to be published in the patent gazette after a request for a trial was filed for about 14 days.

 

However, it is said that Korea is the only case in the world that regulates 14 days.

 

A patent expert in the pharmaceutical industry said, "The generic exclusivity in Korea has been reduced to a system that has little practical benefit.

 

Due to the scattered initial request for trial, only pharmaceutical companies that challenged patents have been changed to a structure that is relatively damaged."