Strategies for Branded Drug Lifecycle Management: Part 2 – Prevention

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This is part two of a six-part series on drug lifecycle management: Four Strategic ChoicesPrevention Innovation Extraction Adaptation Summary and Conclusion

This article is adapted from Song CH, Han J-W. Patent cliff and strategic switch: exploring strategic design possibilities in the pharmaceutical industry. SpringerPlus. 2016;5(1):692. doi:110.1186/s40064-016-2323-1 under a Creative Commons Attribution 4.0 International License. It has been edited for length and style.

Prevention Strategy

Patent protection can be used to temporarily prevent or limit competition. The basic principle of the ‘prevention strategy’ is therefore to exploit possibilities for extension of market exclusivity.

Strategic patenting

One commonly applied strategy is through strategic patenting. The pharmaceutical industry has adopted a strategy of filing multiple patents to protect branded drugs. This practice of forming a network surrounding the base patent is called creating “patent clusters” or “patent fencing”. The acquisition of secondary patents, obtaining features other than the main active drug ingredient (such as crystalline forms of the original compound, methods of use, formulationss, etc.), can create a robust portfolio covering different aspects of the drug. For instance, if the manufacturing process is optimized after filing a patent application the related process patent, such as enhancing of purity level, can be filed at a later stage of the product lifecycle.

Additionally, the primary patent may be split into several patents. One patent may seek protection for a broad claims encompassing various compounds, while another patent may have claims related to a specific compound. In some cases, if one isomer is found to be more active than the other or offers substantial and previously unpredicted therapeutic advantages, it may provide a basis for a separate patenting. Accordingly, secondary patents encompass inventions directed to the incremental improvement of the primary patent and can permit the innovator to maintain the market share even if the generic producers try to enter the market by contesting the validity of the primary patent.

The Sector Inquiry by European Commission has revealed that there is a trend for companies to continuously file patent applications as the expiry date of the primary patent approaches at the ratio of primary to secondary patents of 1:7. This kind of strategic patenting builds portfolios of patents for a defensive rather than for inventive purposes, placing the innovator in a more favorable position for patent-related disputes. Glasgow (2001) concludes: “[…] intellectual property protection is not being used to promote an incentive to create and innovate. Rather, intellectual property rights are being used to gain and maintain an exclusive market share for the most profitable, not necessarily the most beneficial, drug”. Consequently, the term “evergreening” indicates the strategic maneuver to intentionally extend the market monopoly beyond the known patent life through secondary patenting. The consequent patent maze from secondary patents can result in difficulties for generic suppliers to determine when relevant patents will expire and when it is safe to enter the market without inadvertently infringing on patents. Even if the generic suppliers have success in maintaining a clear view through the multiple layers of patent protection, they may still be prohibited from producing the compound by the most economical route or using the most stable forms of the drug (Hutchins 2003). However, more recently, patent-related legal challenges from generic suppliers have been more successful and the lead time for the market launch of generic products has become much shorter (European Commission 2009). The secondary patents may not cover the proposed generic product properly and are contestable (Glass 2004).

SPCs and Patent term restoration

Another possibility to extend the market exclusivity by pursuing legal avenues is provided through obtaining of supplementary protection certificates (SPCs). SPCs are an additional protective mechanism introduced by EU to serve as an extension to patents. For the pharmaceutical sector, SPCs are intended compensate the efforts put into research and development and the elapsed period between filing patents and obtaining market authorization. SPCs extend the effective protection of products already on the market by a maximum of 5 years following patent expiry. However, the protection granted through SPC can be legally challenged. A similar practice named “patent term restoration” exists in the United States and Japan. In the US, innovators can apply for up to five additional years of patent protection for a new drug to make up for time lost while the product was subject to the FDA’s regulatory review (Title II of the Hatch–Waxman Act).

30-month stay provision

Another aspect of Hatch-Waxman legislation, permits brand owners to file a patent infringement suit after an ANDA with a paragraph IV certification (a patent challenge) is filed by a generic manufacturer. The infringement triggers a 30 month period in which the FDA cannot approve the ANDA without a court decision invalidating the patent.

Orphan drug status

Another way of extending the market exclusivity is to apply for orphan drug status. In EU, orphan drug status extends 10 years of market exclusivity for drugs treating rare diseases affecting not more than 5 in 10,000 people for which there is currently no adequate or possible treatment. The United States has similar legislation providing 7 years of market exclusivity. The rationale for this market exclusivity is to make attractive opportunities which might not otherwise attract sufficient interest. However orphan drug status cannot completely prevent generic competition, because if a generic company can gain approval for an indication other than the orphan-protected one, prescribers may be free to adbminister the generic drug for “off-label” use.

Pediatric exclusivity

In the US there is also the opportunity for a 6-month patent term extension for responding to an FDA request to submit pediatric clinical trials for a drug.

Patent settlement agreements

Another option for branded firms is to settle out of court, paying generic companies to abandon their patent challenge. These out-of-court agreements have been under increasing scrutiny from regulators and risk being declared anticompetitive.

Overview of prevention strategies

Strategic optionDescriptionExclusivity period
Strategic patenting (later-issued patents)Obtaining patent protection on different aspects around the base compound patent20 years from the date of filing
Patent term restorationGranting of additional market exclusivity for the time lost due to FDA approval process (Title II of Hatch–Waxman Act)Maximum of 5 years
SPCProtective mechanism serving as an extension to patent rightMaximum of 5 years
30-month stay provisionFiling a patent infringement suit to fight ANDA30 months from the date of notice or till court decision
Orphan drugApplying for orphan drug status for an already authorized drug7 years of market exclusivity in US, 10 years in EU
Pediatric exclusivitySubmission of pediatric clinical trials on the FDA’s request6 months of market exclusivity
Patent settlement agreementsInvolving in settlements with generic manufacturers to delay the market entryDuration of the agreement

Next: Part 3 – Innovation

This is part two of a six-part series on drug lifecycle management: Four Strategic ChoicesPrevention Innovation Extraction Adaptation Summary and Conclusion


  1. European Commission (2009) Pharmaceutical sector inquiry final report. Accessed 02 Oct 2015
  2. Glasgow LJ (2001) Stretching the limits of intellectual property rights: has the pharmaceutical industry gone too far? IDEA J Law Technol 41:227–258 Google Scholar
  3. Glass G (2004) Pharmaceutical patent challenges—time for reassessment? Nat Rev Drug Discov 3:1057–1062 View Article Google Scholar
  4. Hutchins M (2003) Extending the monopoly—how ‘secondary patents’ can be used to delay or prevent generic competition upon expiry of the basic product patent. J Med Mark 1:57–71 Google Scholar

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