Constant patent extension strategy... ‘Evergreening’ ambivalence

Beware of possible conflict with fair trade laws... Directly related to pharmaceutical company profit generation

In the highly competitive global market for pharmaceutical companies, the ‘end’ of patent expiration no longer means losing their game. This is because the ‘Evergreening’ strategy is becoming increasingly popular. This strategy of dominating the 'always green' market by adding patents one by one enables the creation of overwhelming profits beyond simple survival.

Evergreening strategy emerged as a hot topic at the ‘Pharmaceutical and Biotechnology Patent Strategy Seminar’ hosted by Daeryun Law Firm’s Medical Pharmaceutical Group on the 24th. At this seminar, attorney Lee Il-young (Daeryun Law Firm) explained in detail, focusing on cases, how the bug-cleaning strategy is being used to extend the market monopoly period of domestic and foreign pharmaceutical companies.

The evergreening strategy is a strategy to delay the entry of generic drugs into the market by applying for additional new patents or changing indications, dosage forms, crystal forms, etc. before existing patents expire. The drug mentioned as a representative example is Pfizer’s hyperlipidemia treatment ‘Lipitor (atorvastatin)’. This drug has become the number one selling blockbuster worldwide, symbolically demonstrating the success of the pharmaceutical industry's evergreen strategy.

Specifically, Phyto dominated the hyperlipidemia treatment market, monopolizing the market for about 20 years after filing for a substance patent in 1987. However, rather than simply relying on material patents, the company applied for crystal form patents and formulation patents one after another, thereby extending the period of exclusivity as much as possible.

Attorney Lee said, "Pfizer changed the crystal form of Lipitor to prevent existing generic products from being approved, and designed a solid patent portfolio to prevent generic products from easily entering the market even after patent expiration," and emphasized that this strategy goes beyond simple technological superiority and is directly related to the pharmaceutical company's profit generation.

In particular, at this seminar, there was discussion about the possibility that the Evergreening strategy would conflict with the Fair Trade Act. It is pointed out that if a specific pharmaceutical company intentionally abuses its patent rights to prevent generic drugs from entering the market, it may be subject to regulation by the Fair Trade Commission.

In fact, lawsuits frequently occur for this reason in the United States and Europe.

However, there are not many cases of lawsuits like this in Korea yet, and Daeryun explained, "The legal standards for judging patent abuse are not clear, so there are limits to the Fair Trade Commission's intervention."

Unlike foreign pharmaceutical companies that actively utilize the evergreen strategy, as in the case of Lipitor, domestic pharmaceutical companies are relatively unsystematic when it comes to establishing patent strategies.

Attorney Lee advised, “Domestic pharmaceutical companies also need to establish a systematic patent strategy from the early development stage and view this as a long-term investment.”

Meanwhile, generic pharmaceutical companies are strengthening their defense strategies, such as invalidating Evergreen's patents or filing lawsuits for violation of the Fair Trade Act.

For example, some generic companies have succeeded in breaking patent rights through patent invalidation trials, and regulations are also strengthening to reduce cases of reverse payment agreements.

Attorney Lee also said that close cooperation between pharmaceutical companies and legal experts is important to maximize the effectiveness of the evergreen strategy, and emphasized, "Patent strategy is a matter directly related to the survival of a company beyond simple cost. Pharmaceutical companies must build a patent portfolio with market strategy in mind from the research and development stage."

This seminar received attention from related industries as an opportunity to once again remind us of the impact of patent strategy on consumer accessibility and market competitive structure beyond simply corporate profits. In addition, there was a consensus that in order for domestic pharmaceutical companies to overcome the cost burden and become competitive in the global market, they need to maintain a balance with regulations while actively using strategies such as evergreening.

Reporter Lim Tae-gyun (i21@kpanews.co.kr)

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Continuous patent extension strategy... ‘Evergreening’ ambivalence (Shortcut)