Proposed “patent linkage” amendments to the Pharmaceutical Affairs Act (藥事法) would drive up National Health Insurance (NHI) costs by disadvantaging generic drug companies, representatives of a consortium of non-governmental organizations and a pharmaceutical manufacturers’ association said yesterday, adding that the amendments go beyond Trans-Pacific Partnership (TPP) requirements.
“Taiwan has a perfectly fine intellectual property courts system, but it does not allow for brand-name drug companies to engage in ‘rent-seeking,’ so they are seeking to use executive power to create a system which benefits them unjustly,” Economic Democracy Union spokesman Hsu Po-jen (許博任) said at a Legislative Yuan news conference.
The amendments would require the government to automatically halt approval of new generic drugs for 15 months if brand-name producers file patent lawsuits.
They were officially proposed by the Executive Yuan last month as part of a broader package of changes aimed at preparing the nation for TPP accession negotiations.
“This would serve to unjustly extend the monopolies enjoyed by patented drugs by delaying cheaper drugs’ entry into the market,” Hsu said, adding that the new rules would “bankrupt” the NHI system by encouraging frivolous lawsuits aimed solely at delaying generic drugs’ approval.
“The core concept of ‘patent linkage’ is tying together two unrelated laws: the Pharmaceutical Affairs Act and the Patent Act (專利法). Drugs are unique among patented goods in that they always require government approval before hitting the market — and that approval serves as a de facto market barrier. The sole objective of brand-name producers is to use this market barrier to extend their monopoly,” Taiwan Pharmaceutical Manufacturer’s Association executive director Lee Fang-chuan (李芳全) said, adding that the association opposes the amendments as they unfairly disadvantage generic producers.
The tougher provisions would not encourage domestic innovation, because Taiwan’s relatively small domestic market forces drug developers to focus on exports, he said.
“Statistically speaking, generic drug producers already win more than 75 percent of lawsuits filed against them, so there is no reason to presume they are violating patents just because a brand name producer files a suit,” said Weng Ya-hsin (翁雅欣), a legal consultant for the national Chinese Pharmaceutical Manufacture and Development Association.
Hsu said the proposed “patent linkage” amendments were also stricter than related TPP provisions.
“If the TPP only requires us to take off our pants, the government is giving away our underwear too,” he said.
The TPP allows parties to avoid implementing strict “patent linkage” so long as they notify drug patent holders of pending generic approvals and allow them “adequate time and opportunity” to seek judicial remedy, such as preliminary injunctions prior to generics’ marketing.
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