Existence of “Evergreening”?:

evidence from a study on patents

associated with high-cost drugs in

Australia

Professor Andrew F. Christie

Chair of Intellectual Property

Melbourne Law School

What is “Evergreening”?

myriad ways in which

pharmaceutical patent

owners utilise the law and

related regulatory processes

to extend their high rent-

earning intellectual

monopoly privileges (Faunce &

Lexchin 2007)

extend patent protection

around their branded

medicines beyond 25 years(Moir & Palombi 2013)

lawful patenting and

business strategies that

pharmaceutical companies

use to maintain their

dominant share of a drug

market (Pharma. Pat. Rev. 2013)

extending the protection of

products, rather than

extending the life of a given

patent (Prod. Comm. 2016)

2

Methodology

Phase I (primary and secondary patents)

• Identify all granted patents associated will top

selling drugs in Australia (1990-2000)

• Identify types of innovations for which patents

granted

• Identify owners (patentees) to whom patents

granted

Phase II (secondary patents)

• Identify duration of granted patents

• Identify timing of applications for granted patents

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Drugs in Study (Phase I)

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Types of Patents

Primary patent (patent over drug’s API)

Secondary patent (an integer of claim 1 “reads onto”

drug’s API)

•Intermediate or different form of API

•Combination with API

•Delivery mechanism or formulation of API

•Process for making or formulating API

•Method of treatment using API – same ATC

•Method of treatment using API – different ATC

5

Types of Patentees

Patentees of primary patents

• API originator

Patentees of secondary patents

• API originator

• Other originator

- patentee of some other top-50 drug (1990-2000)

• Non-originator

- neither API originator or Other originator

Generic

(12%)

Research-based

(8%)

Misc.

(58%)

Pharmaceutical

(78%)

Public Sector

(14%)

Other

(8%)

Non-pharmaceutical

(22%)

Non-originator

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Patents (all) – by Drug

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Patents (all) – by Types of Patents and Patentees

8

Observations

“One drug, one patent” a fallacy

• many more patents (approx. 50) per drug than

previously found or expected

“Patent thickets” not a fallacy

• but most of thicket not due to API originator

- 50% of patents owned by non-originator

- 25% of patents owned by other originator

•Lots of follow-on innovation in relation to high-

cost drugs

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Observations

Foci of follow-on innovation differs depending on

type of innovator

• API originator:

- Delivery mechanism or formulation of API

- Process of making or formulating API

• Other originator:

- Combination of other drug with API

- Delivery mechanism or formulation of API

• Non-originator:

- Delivery mechanism or formulation of API

- Method of treatment using API – different ATC

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Drugs in Study (Phase II)

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2ndry Patent Application Filings v API Patent Expiration

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2ndry Patent Application Filings v API TGA Registration

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Observations

Timing of follow-on innovation differs depending

on type of innovator

• API originator:

- begins earliest

- ceases earliest

• Other originator and Non-originator:

- occurs before as well as after expiration of API patent

- (almost) all occurs only after TGA registration of API

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Duration of Patents

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2ndry Patent Duration Differences – Factors

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Observations

Private value of follow-on innovation differs

depending on type of innovation and innovator

• type of innovation:

- secondary patents for delivery mechanism or

formulation of API more valuable

(these are the patents most commonly held by API

originator)

• type of innovator:

- secondary patents owned by API originator more

valuable

(whatever is the type of secondary patent)

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Evidence of Evergreening?

Being the API originator provides some benefit re

follow-on innovation around a high-cost drug:

• a commercial benefit (follow-on innovation has

greater private value)

- consistent with “first mover” advantage and

information asymmetries

• but not a legal benefit (no monopoly over follow-

on innovation)

- consistent with an “experimental use” exception to

patent infringement

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Suggestions for Policy Action?

To maximise amount of follow-on innovation

around high-cost drugs:

• expedite granting of TGA registration for those

drugs

To optimise social benefit of follow-on innovation

around high-cost drugs:

• ensure that patentability standards (especially

inventive step and utility) are rigorously applied to

innovations concerning delivery mechanisms or

formulations for those drugs

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