We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
10 March 2021
Over the next few years, some of the best-known biologic medicines will lose patent protection, paving the way for biosimilar medicines to enter the UK market. This article discusses some innovative IP strategies which may be available in the United Kingdom to successfully compete and overcome barriers to market entry.
'Biosimilars' are medicines that seek to compete with, and are similar to, originator biologic products. Biologics contain active substances that are derived from biological sources and are often large, complex molecules such as antibodies.
Biologics are some of the most profitable and widely prescribed medicines. As an example, Adalimumab (Humira), which is used to treat various conditions including rheumatoid arthritis and Crohn's disease, is currently the world's best-selling prescription drug. It is therefore unsurprising that the biosimilars market is highly competitive and is expected to experience substantial growth in the coming years.
By the end of 2021, it is estimated that the National Health Service (NHS) will be able to achieve cost savings of up to £300 million each year using biosimilars,(1) which is particularly attractive in light of the financial pressure faced by the government as a result of the COVID-19 pandemic. Biosimilar manufacturers may also find it easier to gain authorisation to market their products in the United Kingdom under plans put forward by the Medicines and Healthcare products Regulatory Agency(2) to partly diverge from EU regulations following Brexit. Therefore, the potential rewards of the UK biosimilars market are huge.
Innovators will naturally seek to protect their substantial investment in successful products through patent protection. Consequently, the path to biosimilar market entry often contains many patent barriers. Patents that protect the originator product itself present the primary barrier. Experience so far suggests that biosimilar manufacturers tend to delay launch until after the expiry of the primary product patent or the corresponding supplementary protection certificate (SPC).
While the primary rights are still in force, biosimilar manufacturers may take advantage of certain exemptions to patent infringement to best position themselves to enter this valuable market shortly after the primary patent expires.
One exemption is the 'Bolar exemption' or 'Bolar-type' exemption. The Patents Act 1977(3) enables biosimilar companies to manufacture medicines in the United Kingdom that are covered by patent protection without infringing an innovator's patents if the steps taken are for the purposes of obtaining regulatory approval in any jurisdiction or complying with any associated regulatory requirement, whether in the United Kingdom or elsewhere.
Often, biosimilar manufacturers must produce test batches of their product at full commercial scale as part of the regulatory approval process, resulting in the production of a significant quantity of product. Whether such product could be used for commercial purposes after the expiry of the basic patent or SPC raises a number of legal considerations and remains untested in the UK courts.
SPC manufacturing waiver
Another exemption that biosimilar manufacturers can rely on is the SPC manufacturing waiver. This was part of an EU regulation that has been adopted in the United Kingdom in an amended form. The UK waiver enables generic and biosimilar companies to manufacture SPC-protected medicines in the United Kingdom:
While the European Union is included for the purposes of the UK manufacturing waiver, the United Kingdom is a third country for the purposes of the EU waiver.
The waiver came into force in July 2019 and it seems that uptake so far has been relatively low, perhaps because of the requirement to provide advanced notice of manufacture to the SPC holder and the Intellectual Property Office, thereby revealing future commercial plans. The waiver's application has yet to be considered by either the UK courts or the European Court of Justice (ECJ). Following Brexit, the UK courts can no longer refer questions of EU law to the ECJ, raising the possibility of achieving clarity on matters relating to the application of the SPC manufacturing waiver more quickly in the United Kingdom than in the European Union, where a referral to the ECJ would likely be necessary.
As more originator products come 'off patent' (ie, the patent which protects the product itself expires), biosimilar manufacturers that seek to launch products in the first wave after product patent expiry may look to clear the path of any secondary patents, which often protect dosing regimes, formulations, second medical uses and methods for delivering the medicine. Such secondary patent portfolios may include multiple families of divisional patents.
While it is unsurprising that originators would look to secondary patents to help maintain their market monopoly and leverage a return on their investment, for biosimilar manufacturers, such patent filing strategies can create an uncertain and changing legal landscape. Bespoke strategies are often necessary to navigate secondary patent families successfully and avoid being issued with injunctions, which can affect the timing of launch, reputation in the market and, ultimately, the commercial success of the product.
Biosimilar manufacturers may deploy Arrow declarations to address the uncertainty created by pending patent applications, particularly divisionals, the validity of which cannot be challenged before grant. An 'Arrow declaration', named after Arrow v Merck ( EWHC 1900 (Pat)), the first case in which such a declaration was sought, is a form of court order that declares that a particular product or process was not new or was obvious at a specific point in time. This can be of use to companies that manufacture a product or process which may otherwise be said to infringe a patent by providing a 'Gillette defence' to patent infringement (ie, the biosimilar manufacturer is performing only acts that were either known or were obvious before the first filing of the patent).
Therefore, Arrow declarations provide biosimilar manufacturers with a level of commercial certainty that they can launch in the knowledge that they will not be subsequently pursued for patent infringement if pending secondary patent applications are granted. As Arrow declarations are a discretionary relief in the United Kingdom, there must be a domestic useful purpose for the court to order the relief sought. Some biosimilar manufacturers have already sought, with varying success, Arrow declarations in the UK courts.(4)
The UK Court of Appeal(5) has recently extended the potential scope of Arrow declarations. The court confirmed that:
The court further stated that an applicant must establish that it would be useful for specified product features, which the party wishes to sell, to be declared obvious. This broadens the utility of Arrow declarations from a single product to multiple products using the component part or process under the declaration. Equally, if a patent rights holder is seeking to protect a broad inventive concept through the portfolio of patents it owns, the declaration could be useful to counter that concept.
Therefore, Arrow declarations could have a new utility: to limit patentees from seeking patent protection broader than the inventive contribution. Having this declaration in hand could be useful for biosimilar manufacturers to prohibit patent holders from arguing a broad scope to catch infringements.
Arrow declarations granted in the UK might also assist in defending claims for interim injunctions or infringement proceedings in other European countries, although the weight that those national courts would attach to such a declaration is largely untested.
One of the most common forms of follow-on patents relate to further medical uses of known pharmaceutical products.
The use of products in treating disease is not patentable,(6) and double-patenting is prohibited. The Swiss-type patent claim format became established practice to circumvent these problems. Swiss-type claims recognised the fact that further uses of medicinal products also deserve patent protection and may be granted when a new use for a known pharmaceutical has been discovered and that discovery was inventive.
In 2007, to address the lack of legislative protection for new uses of known products, a different claim format was introduced: the European Patent Convention (EPC) 2000 claim.(7) This has superseded Swiss-type claims, which ceased to be granted by the European Patent Office (EPO) in 2011.(8) The EPC legislature's intention was that the two claim formats were equivalent. However, as has been subsequently acknowledged, the two formats are recognised as having a different scope of protection, at least in the United Kingdom. The Swiss-type claim is a purpose-limited process claim, whereas the EPC 2000 claim is a purpose-limited product claim. This has meant that the claims provide different levels of protection, with EPC 2000 claims seen as offering more robust protection than Swiss-type claims.
Interpretation and infringement of Swiss-type claims in relation to 'skinny label' products (ie, those with indications protected by the second medical use patent carved out) in the United Kingdom was addressed by the Supreme Court in Warner Lambert v Generics (UK) ( UKSC 56), albeit the comments were in passing. Further, the question as to whether EPC 2000 claims would be interpreted in the same way was not considered. These issues remain open and are likely to return to the UK courts in the future, particularly in relation to skinny label products and how indirect infringement of EPC 2000 claims should be assessed.
Similar to generics, biosimilar manufacturers are thought to be primarily involved in challenging patents or on the receiving end of patent assertion by patent holders.
However, many biosimilar manufacturers are now taking proactive steps to protect their own intellectual property and even enforce their own patents. This is primarily due to the nature of the industry: biosimilars are complex molecules, which are similar but not identical to the reference biologic, and variations in the manufacturing process may result in patentable inventions. New formulations, dosage regimes and medical devices (eg, auto-injector pens) may also be patentable.
There are signs that biosimilar-on-biosimilar litigation may be increasing, with several cases being filed across Europe in relation to adalimumab formulations, for example. However, the extent to which biosimilar companies will develop and maintain their own patent portfolios remains to be seen.
Biologics offer innovative treatments for many debilitating illnesses. Biosimilar medicines offer more affordable alternatives. As many biologics come 'off patent', biosimilar manufacturers are likely to develop novel patent and litigation strategies to overcome secondary patents, as seen with the Arrow declaration. In the United Kingdom, this is likely to result in an increase in the number of patent disputes as manufacturers attempt to gain the first-mover advantage. Patent expiries and the prospect of biosimilar competition also maintain pressure on biopharmaceutical companies to continue to innovate and develop new medicines.
For further information on this topic please contact David Lancaster, Tracey Roberts or Sarah Taylor at Pinsent Masons by telephone (+44 20 7418 8250) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The Pinsent Masons website can be accessed at www.pinsentmasons.com.
(1) For further information please see the NHS website.
(2) For further information please see the government's website.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.