Striking a fair balance between indication patents and skinny-labelled drugs

When a patent for a medically active compound expires, it’s not uncommon for other patents protecting various uses of the active compound to remain in force for significant periods of time. This leads to a situation where generic pharma companies are free to market the compound for indication A, while only the originator is allowed to market the compound for indication B. In order not to infringe the indication patent, generics often launch ‘skinny label’ versions of the drug. In practice, this means the generics apply for marketing authorisations excluding indication B and they make sure that labels, summaries of product characteristics (SmPCs) and leaflets do not mention use of the product for treating indication B.

Unfortunately, the use of indication patents and skinny-labelled generic drugs come into conflict with regulations and practice on the Swedish market for pharmaceuticals in several different ways. First, clinicians are not bound by the indications included in the marketing authorisations for skinny-labelled drugs, but may prescribe these drugs ‘off label’ for use in the treatment of indication B. Second, the Swedish system of substitution between essentially similar drugs is based on assessments of similarity between substances. Normally, the Swedish Medical Products Agency will decide that two products containing the same active substance are essentially similar and therefore substitutable, irrespective of whether or not the products are authorised for the same indications. Hence, even if the clinician prescribed the originator product for treating indication B, pharmacies may be obliged to switch to a generic product not authorised for indication B.

Originators and generics are currently trying to figure out how to deal with the conflicts between the patent and regulatory systems. While there have been court cases addressing the subject, virtually no practically useful guidance has yet emerged from the courts. In the current legal framework, it seems almost inevitable that the courts will have to either shut the door on skinny-labelled drugs or decide that indication patents are more or less useless, as it is difficult to imagine a solution that would strike a reasonable balance between these positions. Therefore, the legislature should intervene and change the legal framework. One option would be to require the Medical Products Agency to pay more attention to differences in indications when determining which substances should be categorised as substitutable. In other words, only substances authorised for the same indications should be substitutable. Another, and arguably better, option would be to reform the substitution system so that it is based on indications rather than substances. This would enable substitution by the generic product if the originator product were prescribed for indication A, but prevent substitution if the prescription were for indication B.

For products that are not substitutable, the problems related to differences in indications should be less palpable. There will be no automatic substitution of the originator products by the generic products, but pharmacies will only dispense the generic products if they have been explicitly prescribed by clinicians. Hence, use for non-authorised (and possibly patent-protected) indications will require off-label prescriptions. Still, it has been submitted that it may not be sufficient for generics to use skinny labels, but that they must also undertake various active measures to make sure that their skinny-labelled products are not being prescribed and used off label. While it seems unlikely the courts would agree with this position, at least on the assumption that there is a real market for the authorised and unprotected indication, we have not yet seen any case law. As biosimilars will not be subject to mandatory substitution at the pharmacies, and as more and more biosimilars enter the market, it seems likely the courts will have to take a stand in the next few years.

Similar problems also arise on the hospital markets. Traditionally, hospitals have procured medicinal products by calling for tenders based on specifications of substances. A generic company tendering a skinny-labelled product will face the risk of having its tender rejected (because the product is not authorised for all indications and therefore will not fulfil the hospital’s needs) as well as the risk of infringing the indication patent (because the generic company actively offers the skinny-labelled product without restrictions on the authorised indications). Recently, however, there have been signs that hospitals have realised this and started to adapt to the new market realities.

In a recent procurement, the hospital region of Uppsala called for tenders for the substance rituximab. Rituximab is authorised for several different indications, including non-Hodgkin’s lymphoma, chronic lymphocytic leukaemia, rheumatoid arthritis and granulomatosis with polyangiitis. Upon realising that some of these indications were protected by indication patents and that the only available biosimilars were sold under skinny labels, the hospital region decided to split the tender category into four categories and invite companies to submit separate tenders for each indication. The hospital region thus opened to competition with respect to the unprotected indications without encouraging tenderers to infringe any indication patents. Unfortunately, the procurement was challenged and ultimately cancelled for other reasons, so we won’t be able to study how the hospital region would monitor and ensure that the products were not prescribed and used for other indications than those for which they were tendered.

We will continue to monitor developments regarding indication patents and skinny-labelled drugs and expect to report on interesting developments in the case law and regulatory framework over the coming years.