Ownership of knowledge — therole of patentsin
`pharmaceutical R&D
`Carlos Maria Correa!
`
`Abstract Both the public and the private sectors contribute to research and development(R&D)in pharmaceuticals. The public sector
`originates many of the discoveries of new drugs. The private sector, which focuses on development, is heavily reliant on patents.
`Though patents are presumed to reward genuine inventions, lax rules on patentability and shortcomings in procedures permit
`protection to be obtained on a myriad of minor developments. These patents, though weak and possibly invalid in many cases, are
`used to restrain competition and delay the entry of generic competition. Developing countries should design and implementtheir
`patent lawsso as to preventstrategic patenting and promote competition and access to medicines.
`
`KeywordsPatents/legislation; Pharmaceutical preparations; Research; Diffusion of innovation; Drug industry (source: MeSH, NLM).
`Motsclés Brevet/législation; Préparations pharmaceutiques; Recherche;Diffusion des innovations; Industrie pharmaceutique (source:
`MeSH, INSERM).
`Palabras clave Patentes/legislacién; Preparaciones farmacéuticas; Investigacion; Difusion de innovacidn; Industria farmacéutica
`(fuente: DeCS, BIREME).
`SS RN OE32$8) indy shady Bydoles COLIlard Opel Hsp) oleral teLEN) lly ae olyAo heblll CLI
`eaSS gli
`
`Bulletin of the World Health Organization 2004;82:784-790.
`
`Voir page 786le résumé en francais. En la pagina 786 figura un resumen en espafiol.
`
`786 todue § dyply jasdli do ON ow
`
`immunodeficiency syndrome (HIV/AIDS). Publicly funded
`Although governments are responsible fora significant portion
`genomeresearchhas also produced manydrugleads (4). In the
`ofglobal spending onresearch and development (R&D), since
`United States, the federally funded biomedical research sup-
`the 1980sa steep decline in the share of governmentfunds for
`ported by the National Institutes ofHealth (NIH)playsavital
`R&Dis a trend commontoall major industrialized countries
`and many other Organisation for Economic Co-operation and
`role in new drug development,feeding into the R&Dactivities
`of the private pharmaceutical industry that operates under
`Development (OECD)countries. In the largest OECD coun-
`tries (with the exception ofItaly), the private sector performed.
`patentprotection (2). In addition to this direct and important
`between 62% and 70% oftotal national R&D (1).
`contribution, governments ofmany developed countries grant
`tax credits and other incentives for R&cD (J).
`Private and public sources also coexist in pharmaceutical
`R&D.Thedivision oflabour in pharmaceutical R&D between
`However, private industry invests the largest part of
`the two sectorsis related,at least in principle, to the nature of
`global funds for pharmaceutical R&cD. Unlike the public sec-
`the knowledge thatis fostered (2). In mostcases, the discovery
`tor, industry's research agenda is dominated by profit-making
`of important new drugs is made by public institutions, which
`objectives. Most of industry's resources are concentrated on
`later license their development and exploitation to private
`applied R8cD,though funds are also devoted to basic research.
`firms. Some 70% ofdrugs with therapeutic gain were produced
`In 1999,for instance, 24.5% of R&D spending was on basic
`with governmentinvolvement(3). Basic research thatled to the
`research in the United Kingdom, 36% in the United States, and
`18.4% in Canada (5).
`discovery ofpotential “drug leads” has almost always been pub-
`licly funded at universities, in-house governmentfacilities, or
`Given the objectives and nature of industry's activities,
`research institutes in Europe, North America, and Japan. Since
`they rely heavily on the acquisition and enforcementofpatents
`the beginning ofthe 20th century, publicly funded research has
`worldwide. A commonbelief is that patents are normally ac-
`led to major drug lead discoveries in, for example, tuberculosis,
`quired to protect mew drugs, and thereby recover the substantial
`other infectious diseases and cancer. Morerecently, publicly
`R&Dinvestments made for increasing the range of available
`funded research has led to the discovery of antiretrovirals for
`therapies; but the number of patents annually obtained to
`the treatment of human immunodeficiency virus/acquired.
`protect genuinely new pharmaceutical products is very small
`
`" Director, Centre of Interdisciplinary Studies of Industrial and Economic Law, University of BuenosAires, Av. Figueroa Alcorta 2263, 1st floor, 1425 BuenosAires,
`Argentina (email: ceidie@derecho.uba.ar).
`Ref. No. 03-010801
`(Submitted: 18 December 2003 — Final revised version received: 23 June 2004 — Accepted: 24 June 2004)
`
`Mylan Ex.1071 - Page 1 of 7
`Mylanv. Sanofi - IPR2018-01675
`
`Mylan Ex.1071 - Page 1 of 7
`Mylan v. Sanofi - IPR2018-01675
`
`

`

`Carlos Maria Correa
`
`Special Theme — Bridging the Know—Do Gapin Global Health
`Patents in pharmaceutical R&D
`
`Patenting cumulative innovations
`and declining, whereas thousands of patents are applied for
`or granted concerning pharmaceutical-related inventions. The
`The cumulative nature of innovation has importantrepercus-
`numberofpatents acquired in relation to “upstream” inven-
`sions on the patent system. Though theoretically conceived to
`tions, thatis, scientific discoveries rather than specific technical
`reward inventions marked by considerable originality, the patent
`solutions, is increasing. This kind of patenting detracts from
`system is plagued with grants covering incremental, minor — in
`public domain knowledge that could be used “downstream” by
`somecases trivial — developments. They are not the product
`manyresearchersto explore multiple inventive opportunities;
`ofinventive efforts, but rather the outcomeof “taking a speedy
`it deprives society of the benefits that the widespread use and
`path downatrail that was obvious to many”(8, p. 128). In
`dissemination ofbasic scientific ideas could generate (2). The
`2001, the United States Patent and Trademark Office granted
`problemsraised by this form of privatization of science have
`over 171 000 patents, almost twice the number granted ten
`been explored by an extensiveliterature (6, 7). Patents, on the
`years earlier, This increase cannot simply be attributed to an
`other hand,are ordinarily acquired for a myriad offollow-on,
`increase in R&D productivity, but to the flexibility of the
`merely incremental, or minor developments.
`patent system to permit the protection offollow-on and other
`developments(13, pp. 1933-4).
`Moreover, there is increasing evidence about poor pat-
`ent quality. (A poor-quality patentis one thatis likely to be
`invalid or contains claims thatare likely to be overly broad
`(14).) “Non-obviousness” or “inventive step” (one of the key
`patentability requirements) is assessed against a standard that
`many follow-on and routine innovations donotfind difficult
`to meet, based on thefiction ofwhat“a person with ordinary
`skill in the art” would have been able to derive from priorart.
`Weaknesses in patent procedures, in addition, favour the grant-
`ing of patents over trivial or minor developments (14, 15),
`despite the significant resources invested in developed countries
`to fund patentoffices (6).
`Large firms have rapidly learned how to exploit lax
`patentability standards and the shortcomings in the patent
`examination process. They apply different strategies to use
`patents offensively as means to encumberor block potential
`competitors. Thus, “blanketing”strategies aim at mining every
`step in a manufacturing process with patents claiming minor
`modifications; “fencing” refers to a situation where a series of
`patents blocks certain lines or directions ofR&cD; “surrounding”
`takes place “when an important central patent can be fenced
`in or surrounded by otherpatents, which are individually less
`importantbutcollectively block the effective commercial use of
`the central patent, even after its expiration” (17); and “flooding”
`is based on the acquisition of many patents on minoror incre-
`mental variations on technology developed by another com-
`pany (18, 19). For other anti-competitive practices, see (20).
`As noted by the NIHCM,“drug manufacturers patent a
`widerange ofinventions connected with incremental modifica-
`tions of their products, including minorfeatures such as inert
`ingredients and the form,color, and scoring oftablets. In many
`cases, these patents discourage generic companies from trying
`to develop a competitive product” (12). Moreover, backed by
`substantial budgets for patent acquisition andlitigation, phar-
`maceutical companies have been able to delay substantially the
`entry ofgeneric competition by “evergreening” manyoftheir
`patents (2/—23). According to United States lawmaker Waxman
`(oneof the authorsof the United States Drug Price Competi-
`tion and Patent Restoration Act of 1984, commonly known
`as the “Waxman—Hatch Act”) brand-name companies “have
`used creative lawyering to try and extendthe period oftheir
`monopolies long past the time intended by Congress” (24).
`Poor-quality patents acquired to encumberordelay ge-
`neric competition are generally aggressively used against com-
`petitors. They arelikely to be invalidated totally or partially,
`however,ifsubject to a moreserious scrutiny by judicial courts
`
`Innovation in pharmaceuticals
`Innovation in pharmaceuticals relies increasingly on the knowl-
`edge gleaned from preceding innovations and on generally
`available techniques (8, 9). As in other sectors, innovation “has
`shifted away from models based on absolute novelty andfirst
`improvement towards a model in which innovation is no lon-
`ger driven by technological breakthroughs but by the routine
`exploitation ofexisting technologies” (70). Innovationin this
`sector follows, therefore, an essentially “cumulative” model of
`innovation, as opposed to the “discrete” model, where the pros-
`pects ofvariations and improvements ofinventions are substan-
`tially bounded.
`Manyof the new chemical entities of pharmaceutical
`use do notentail a genuine therapeutic progress; they are “me
`too” drugs, developed as a result of the great deal of emula-
`tion of successful drugs undertaken byrival companies (J 2).
`Pharmaceutical innovation also includes a large number of
`improvements or minor changes to existing drugs, and the
`identification of new uses of known products. Incremental in-
`novation is often motivated by the objective of extending the
`commercial benefits derived from existing products, particu-
`larly when original patents expire and new patents maybe used
`to prolong market exclusivity.
`Accordingto a report ofthe National Institute for Health
`Care Management (NIHCM) in the UnitedStates, from 1989
`to 2000 the United States Food and Drug Administration
`(FDA)approved 1035 new drugapplications. Ofthese, a third
`(35%)were products with new active ingredients, or new mo-
`lecular entities (NMEs). The other 65% used active ingredients
`that were already available in a marketed product. Overhalf
`(54%) were incrementally modified drugs, or new versions of
`medicines whose active ingredients were already available in an
`approved product. The rest (11%) contained the sameactive
`ingredient as identical marketed products (12).
`Priority NMEs, the most innovative type of new drugs,
`wererare in the 12-year period 1989—2000:just 153 (15%) of
`all new drug approvals were medicines that used new active in-
`gredients and provided significantclinical improvement. Drugs
`providing moderate innovation comprised another 28% of
`approvals. The other 57% ofapprovals were for drugs showing
`only modest innovation,at best: 46% made some modification
`to an older product containing the same active ingredient,
`while the remaining 11% wereidentical to marketed products.
`Asa result, the NIHCMreports, priority NMEs — the most
`innovative drugs — contributedlittle to the increase in new
`products, and most growth came from products that did not
`provide significantclinical improvement, especially modified
`versions ofolder drugs (12).
`
`Mylan Ex.1071 - Page 2 of 7
`Mylanv. Sanofi - IPR2018-01675
`
`Mylan Ex.1071 - Page 2 of 7
`Mylan v. Sanofi - IPR2018-01675
`
`

`

`Special Theme — Bridging the Know—DoGapin Global Health
`Patents in pharmaceutical R&D
`
`Carlos Marfa Correa
`
`than the examination made at the patent office, as shown ina
`study by the United States Federal Trade Commission on drug
`entry and patent expiration (25).
`
`Conclusions
`
`Patents have becomea key factor in the R&¢Dprocess in phar-
`maceuticals. Although, in certain contexts, they provide the
`incentives to develop new pharmaceutical products from which
`society may benefit, by their very nature they limit the diffusion
`of the innovations that they are intended to promote. When
`the innovation process is cumulative, strong protection for the
`first-generation producerlimits the scope ofsecond-generation
`producers, and slows down follow-on innovation.
`Patents often establish barriers to entry that are unjusti-
`fied in terms of the technical contribution effectively made.
`Lowstandards ofpatentability have allowed a significant expan-
`
`sion of patent coverage. Strategic patenting diverts resources
`intolitigation and restrains legitimate competition. While this
`is taking place in both developed and developing countries
`alike, it is particularly worryingin the latter since competition
`laws are in many cases non-existent or poorly implemented,
`and domestic firms are generally too small to bear the costs and
`risks oflitigation. Developing countries have struggled in the
`past few yeats to confirm their rights to use the flexibilities
`allowed by the Agreementon Trade-related Aspects ofIntellec-
`tual Property Rights (TRIPS), particularly in relation to parallel
`imports and compulsory licences.” Without abandoning these
`efforts, they should pay more attention to the way in which
`patents are examined and granted, in order to avoid abuses
`and the negative effects on access to medicines that patents on
`noninventive developments entail. I
`
`Conflicts of interest: none declared.
`
`Résumé
`
`Propriété intellectuelle - Le réle des brevets dans la R & D en pharmacie
`Le secteur privé, comme le secteur publique, contribuent aux
`progrés mineurs. Ces brevets, quoique faibles et éventuellement
`activités de recherche et développement (R & D) dansle domaine
`invalides dans de nombreux cas, sont utilisés pour restreindre la
`pharmaceutique, Le secteur public est a l'origine de la découverte
`concurrence et retarder I'entrée en compétition des génériques.
`d'un grand nombre de nouveaux médicaments. Le secteurprivé, qui
`ll convient que les pays en développement concoivent et mettent
`axesesefforts sur le développement, dépend fortementdesbrevets.
`en ceuvreleur législation sur les brevets de maniére a prévenirla
`Bien que ceux-ci soient supposés récompenser de véritables
`prise de brevets stratégique et a promouvoir la concurrence et
`I'accés aux médicaments.
`inventions,le laxisme deslois sur la brevetabilité et les défauts de
`procédure permettent d’obtenir la protection d'une multitude de
`
`Resumen
`
`Propiedad de los conocimientos- Funcién de las patentes en la 1+D farmacéutica
`desarrollos de poca importancia. Estas patentes, aunque poco
`Tanto el sector pUblico comoel sector privado contribuyen a la
`investigaciony el desarrollo (I+-D) de preparaciones farmacéuticas.
`consistentes y posiblemente carentes de validez en muchoscasos,
`Muchosdelos descubrimientos de medicamentos nuevostienen
`se usan para restringir la competencia y retrasarla introduccién de
`lugar en el sector publico. El sector privado, que se centra en el
`medicamentos genéricos. Los paises en desarrollo deben disefiar
`desarrollo, depende en gran medida de las patentes. Aunque se
`y aplicar sus leyes en la materia de manera que prevengan las
`supone que éstas recompensanauténticasinvenciones,la laxitud
`patentes estratégicas y promuevan la competencia y el acceso a
`los medicamentos,
`de las
`_normas acerca de la patentabilidad y los fallos de los
`procedimientos permiten obtener proteccién para innumerables
`
`ars
`ANpAStpoemyay Segt BogeeStelyy99 1Bylall Soka!
`Spel pay Se Selly old! lela) waLL soll
`3 beseDe pe Jel cielSh ode Gime or obJy Alas ale
`dye wll, ill oA pedal peltetend WY wey opt deel
`¢laa ul, Beeb! 3 oe tall Send ela Naa Lal 5hyal
`al) Glali le ee a cfg AeSLA Gale at! yo)
`ley le Nn S lalacel dead cygel de aalacal Sy coll ¢ elt
`lelVY lel dl aa YE ead of oe pdb ogeM
`a wollos es cele’ ely oe. Adler) Golk! Lguilgs Aady altel
`le Spall Goky allah pialy gonad ulate cell
`gpa eo ghy cote Sl pee, aleESA pb dela of YI teat!
`:
`449M
`whe gl pley obl, bbs Sl abdh acadl Obes colle!
`
`4 See World Health Assembly Resolution WHA56.27 (2003) which recommends MemberStates “to useto thefull theflexibilities” contained in the TRIPS Agreement.
`
`Mylan Ex.1071 - Page 3 of 7
`Mylanv. Sanofi - IPR2018-01675
`
`Mylan Ex.1071 - Page 3 of 7
`Mylan v. Sanofi - IPR2018-01675
`
`

`

`Carlos Maria Correa
`
`Special Theme — Bridging the Know—Do Gapin Global Health
`Patents in pharmaceutical R&D
`
`13. Barton J. Reforming the patent system. Science 2000;287:1933-4.
`14. To promote innovation: the proper balance of competition and patent law
`and policy. Washington (DC): Federal Trade Commission; 2003.Available
`from: htpp:/Awww.ftc.gov
`15. Keeping science open:the effects ofintellectual property policy on the
`conduct ofscience, London: The Royal Society; 2003.Policy document 02/03.
`16. Intellectual property: information on the US Patent and Trademark Office’s
`past and future operations. Washington (DC): General Accounting Office;
`2002. Report to Congressional Requesters.
`17. Granstrand 0. The economics and managementofintellectual property.
`Towards intellectual capitalism. Northampton: Edward Elgar; 1996.
`18. Sankaran SK,Patent flooding in the United States and Japan. The Journal of
`LawandTechnology 2000; 1:393-428.
`19. Glasgow L. Stretching the limitsof intellectual propertyrights: has the
`pharmaceutical industry gone too far? The Journal of Law and Technology
`2001;2:227-58.
`20. Sampath PG. Designing national regimes that promote public health
`objectives, Maastricht: UNU/INTECH; 2003. INTECH Discussion Paper.
`2
`. Drug patents underthe spotlight sharing practical knowledge about
`pharmaceutical patents. Geneva: Médecins Sans Frontiéres; 2003.
`22. Correa C. frends in drug patenting. BuenosAires: Corregidor; 2001.
`23. Hutchins M. Extending the monopoly: how “secondary” patents can be
`used to delay or prevent generic competition upon expiry of the basic
`product patent. Journal of Generic Medicine 2003;1:57-71.
`24, Seltzer J. Changes to aid generic drugmakers afootin Congress. Reuters, 30
`October 2003.
`25. Generic drug entry prior to patent expiration. Washington: FederalTrade
`Commission; 2002. Available from: htpp://www.ftc.gov
`
`References
`. National Science Board. Science and engineering indicators 2002. Arlington
`(VA): National Science Foundation; 2002.
`. Macroeconomics and health: investing in health for economic development.
`Report of the Commission on Macroeconomics and Health. Geneva: World
`Health Organization; 2001. Available from: htpp:/Awww.who.int
`. United Nations Development Programme. Human developmentreport. New
`York: Oxford University Press; 1999,
`. Fatal imbalance. Thecrisis in research and developmentfordrugs for
`neglected diseases, Geneva: Médecins Sans Fronti@res; 2001.
`. A comparison ofpharmaceutical research and developmentspending in
`Canada and selected countries. Ottawa: Patented Medicine Prices Review
`Board; 2002.
`. Barton JH. Research-toolpatents:issues for health in the developing world.
`Bulletin of the World Health Organization 2002;80:121-5.
`. Eisenberg RS. Bargaining overthe transfer of proprietary research tools:is
`this marketfailing or emerging? In: Dreyfuss R, ZimmermanD,First H,
`editors. Expanding the boundariesofintellectual property. Oxford: Oxford
`University Press; 2001.
`. MergesR, Nelson R. Onlimiting or encouragingrivalry in technical progress:
`the effect of patent-scope decisions.In: Nelson R, editor. The sources of
`economic growth. Cambridge and London: Harvard University Press; 1996.
`. Long C. Patents and cumulative innovation. Washington University Journal
`of Law andPolicy 2000;2:229-46.
`10. Foray D. Production and distribution of knowledgein the new systemsof
`innovation:the role ofintellectual property rights. Science, Technology
`Industry Review 1992;16:119-52.
`11. Casadio Tarabusi C, Vickery G. Globalization in the pharmaceutical industry.
`International Journal of Health Services 1998;1:67-105.
`12. NationalInstitute for Health Care Management. Changing patterns of
`pharmaceutical innovation. Washington (DC): NIHCM Foundation; 2002.
`Available from: http:/Awww.nihcm.org
`
`oo
`
`wo
`
`nN
`
`w > w
`
`i a ~
`
`RoundTable Discussion
`
`Pharmaceutical R&D needs new financial
`paradigms
`John H. Barton’
`
`I endorse Professor Cortea’s sound recommendations on patent
`law. The patent system is at its most successful whenit covers a
`significantdiscrete product or process. It is at its least successful
`when it covers something much broader or much narrower.
`Patents on broad scientific principles are generally bad, because
`in the words of the United States Supreme Court, they “may
`confer power to block offwhole areas ofscientific development,
`without compensating benefit to the public”(1). At the other
`end of the continuum,patents on very minor improvements
`create a monopolyoutofproportion to the technological benefit
`of the improvement. Moreover, such patents may impose exten-
`sive and costly legal negotiations on those whowish to have the
`freedom to launch a new product. Thus, national patentoffices
`should apply appropriate doctrines ofutility or ofthe scope of
`patentable subject matter to avoid the problem ofoverly broad.
`patents, and appropriate doctrines of inventive step to avoid
`the problem ofoverly incremental patents.
`I want to emphasize that the patent law provisions that
`Correa describes are only part of a much larger body ofissues
`
`affecting the balance between drug developmentincentives and
`drug access. In the United States, the 1984 Waxman-—Hatch
`Act explicitly extends a drug’s regulatory monopoly (with some
`very technical provisions that have been used to obtain longer
`exclusivity than was probably intended by Congress and have
`recently been revised). Relevant to middle-income countries
`with the ability to build a generic industry, the TRIPS Agree-
`mentand some othertrade agreementsrestrict the right to use
`an original applicant's clinical trial data to obtain approval for
`a generic product. Far more important, however,is the issue of
`cost. For the poor and those in poorer nations, access to drugs
`at even generic prices is inadequate, as shown by the estimate of
`WHO's 3 by5 initiative to make antiretroviral drugs available
`to 3 million people by 2005: at present only one person out
`of 15 people needing antiretrovirals in the developing world
`is actually receiving them. Solving thelegal problemsdoes not
`solve the more difficult financial problems.
`Finally, the industry is facing an additional problem that
`Correa does notraise: the numberof genuinely new pharma-
`ceutical products being approvedisfalling even as the level of
`research investment by the pharmaceutical industry is growing
`rapidly. The reasons are not clear. One may be a decline in
`basic scientific opportunities, at least for the kinds of disease
`that are of most economicinterest to the industry. Others may
`include highercosts ofclinical trials or higher effective regula-
`tory standards. Encouragingly, the area where the number of
`new products is increasing is that in which products derive from
`biotechnology. This overall declining pay-off ofresearch is very
`
`1 Emeritus Professor, Stanford Law School, Crown Quad 237, Stanford University, Stanford, CA 94305-8610, USA (email: jbarton@stanford.edu).
`
`Mylan Ex.1071 - Page 4 of 7
`Mylanv. Sanofi - IPR2018-01675
`
`Mylan Ex.1071 - Page 4 of 7
`Mylan v. Sanofi - IPR2018-01675
`
`

`

`Special Theme — Bridging the Know—DoGapin Global Health
`RoundTable Discussion
`
`important, and the industry may have to find new research para-
`digms. This is a concernfor the world as a whole. In addition,if
`the industry is to develop products especially for the developing
`world,it will need new financial paradigmsas well.
`
`Conflicts of interest: none declared.
`
`1. Brenner v. Manson, 383 US 519. United States Federal Supreme Court, 1966.
`
`Patents do not strangle innovation, but
`their quality must be improved
`Amir Attaran'
`
`everyone: competitors who must spend heavily to overturn
`wrongly granted patents; consumers who pay a premium while
`those patents remain in force; and even companies and their
`shareholders, as happened whenan invalid Prozac patent was
`finally overturned, wiping US$ 35billion offEli Lilly's market
`capitalization (7).
`Ironically, among the least affected are the low- and
`middle-income countries. This is simply because the patenting
`of medicines there is rare — no more than a few percentage
`points for the WHO Model List ofEssential Medicines (2). If
`Professor Correais truly correct in the opinion that most new
`medicines “did not provide significantclinical improvement”,
`then even a majorpush co patentall new medicines in develop-
`ing countries would only modestly affect public health. There
`will always be a minority of cases where patents cause trouble
`— or maybe even harm — but as the hierarchy ofconcernsfor
`developing countries goes, patents should nottop thelist.
`
`Conflicts of interest: none declared.
`
`1. Maiello M. Prozac hangover. Forbes 10 May 2004.
`2. Attaran A. How do patents and economic policies affect access to essential
`Medicinesin developing countries? Health Affairs 2004;23: 155-66.
`
`Pharmaceutical innovation is evolutionary
`andincentive-driven
`Harvey E. Bale? & Boris Azais?
`
`There is no doubt that the patenting of inventions — any
`inventions, not just medicines — is rising unprecedentedly.
`As Professor Correa writes, the resulting thicket of patents
`could “deprive society of the benefits [of] ... widespread use
`and dissemination of basic scientific ideas”.
`Possibilities and facts are not the samething, however, and
`there is surprisingly little empirical data to show that the patent
`thicket is subtracting from the rate of innovation or society's
`benefit from it. Maybe thatis happening without anyonenotic-
`ing, but the available evidence suggests otherwise.
`Correacites extensively from the NIHCManalysis of
`new medicines, 1989-2000.As he correctly points out, only
`15% of the medicines approvedin that period contained new
`active ingredients and were exceptionally medically useful.
`Fully 65% of medicines contained active ingredients that had
`Professor Correa alleges that “lax rules on patentability and
`been commercialized earlier, and 54% were “incrementally
`shortcomings in procedures” encourage non-inventive or
`modified drugs” that bear great resemblanceto already existing
`medicines.
`“minor, incremental” drug developments and “strategic” pat-
`enting activities. He thus suggests that patents should not be
`Buthow dothesestatistics prove that innovationis being
`granted on medicinesthat “do notentail a genuine therapeutic
`strangled to death?In fact they provejust the opposite: that in-
`progress”. This is to misread the nature and value of pharma-
`novationis alive and well. Ifan inventor’s rational expectation
`ceutical innovation — as inall scientific sectors, the processis
`is that, morelikely than not, the difference between the new
`one ofevolution andreflects the principle that “Nature does
`medicine andthosebefore it will not constitute a great leap,
`not make jumps”.” Correa’s policy prescription, based on an
`butonly an “incremental” improvement, and the inventorstill
`inaccurate diagnosis of the problem anda seriously flawed key
`ploughs money andtime intoits research and development,
`study, would lead to contradictory and anti-innovationresults
`then innovation certainly does not seem strangled. Actually, it
`for critically needed therapeutic innovation in major global
`seems irrepressible.
`disease threats.
`This is not to say that Correa'’s hypothesis about patent
`Correa notes that public sector research provides impor-
`thickets harming pharmaceutical innovation is necessarily
`tant building blocks for private research and development, and
`wrong. Obviously, the more patents, the more inventors must
`that pharmaceutical companies invest “the largest part ofglobal
`spend on patent management,licensing andlitigation. At some
`funds for pharmaceutical R&D”. In modern drug develop-
`point, the mounting costs must dissuade inventors with shal-
`ment, equipped with an armamentarium ofscientific and
`low pockets more than those with deep ones, so that research
`technical skills, the private sector manages the discovery and
`and developmentaccretes in major pharmaceutical companies,
`developmentprocesses in a competitive market that presents
`ahead of small biotechnology firms. The extent to which that
`high risks of failure. The United States National Institutes of
`accretion is happening, andif it leads to a net decreasein in-
`Health (NIH) reported in 2001 that of the 47 prescription
`novation,is under-researched and notclearly known.
`drugs for which sales exceeded US$ 500 million per year, the
`Correa is correct that the quality ofpatent examinationis
`NIH had contributed to the discovery or developmentof only
`scandalous. Even in Europe or North America, many dubious
`four (7).
`patents are issued. The resulting lack of legal certainty harms
`
`
`1 Professor, Institute of Population Health and Faculty of Law, University of Ottawa, Canada. Address for correspondence:RoyalInstitute of InternationalAffairs,
`Chatham House, 10 St James's Square, London SW1Y 4LE, England (email: aattaran@riia.org).
`2 Director General, International Federation of Pharmaceutical Manufacturers Associations (IFPMA), 30 rue de St Jean, PO Box 758, 1211 Geneva 18, Switzerland
`(email: h.bale@ifpma.org). Correspondence maybesentto either author.
`3 IFPMAFellow from Merck & Co.Inc., International Federation of Pharmaceutical Manufacturers Associations (email: b.azais@ifpma.org).
`4 See Geoffrey Fishburn. ‘Natura non facit saltum’ in Charles Darwin andAlfred Marshall. Available from: http://www.qut.edu.au/arts/human/ethics/ieps/absfish.htm
`
`Mylan Ex.1071 - Page 5 of 7
`Mylanv. Sanofi - IPR2018-01675
`
`Mylan Ex.1071 - Page 5 of 7
`Mylan v. Sanofi - IPR2018-01675
`
`

`

`Special Theme — Bridging the Know—Do Gapin Global Health
`RoundTable Discussion
`
`Problems with patent examination in the
`developing world
`Christopher Garrison’
`
`Professor Correa illustrates clearly some of the concerns as-
`sociated with contemporary R&D models and the patterns of
`patenting activity in developed countries that support them.
`Hedraws the proper conclusion that developing countries need
`to pay moreattention to their patent examination and granting
`procedures if they are to avoid similar problems.
`To develop this theme further, two steps must be con-
`sidered. Firstly, developing countries must decide upon or
`review their rules on patentability, bearing in mind the degree
`of flexibility still available under the TRIPS Agreement;least
`developed countries need neither grant nor enforce patents for
`pharmaceutical products until 2016 (1). Ifa developing country
`wished to minimize the numberofpharmaceutical patents that
`it must grant,it could adopt morerestrictive (butstill perfectly
`legitimate) interpretationsofits TRIPSobligations than those
`adopted by Europe, Japan or the United States, and might thus
`avoid someofthe problematic patents cited by Correa. Secondly,
`to make this work, developing countries must put in place a
`robust system to ensure that the rules they have chosen are
`observed.This is nota trivial task.
`To examinerigorously a patent application requires a high
`degree of expertise: for example, the European Patent Office
`employs some 2500 trilingual patent examiners, many with
`postgraduate qualifications. A few developing country patent
`offices do haveeffective examination capabilities, ifnot on such
`a scale, but they are the exception rather than therule (2).
`Patentoffices in many developing countriesrely to a great
`extent on the work ofthe European,Japanese and UnitedStates
`Patent Offices. Through the Substantive Patent LawTreaty nego-
`tiations hosted by the World Intellectual Property Organization,
`these three Patent Offices are pushingfora further international
`harmonization ofcertain fundamental patentabilityrequirements,
`largely alongthelines oftheir ownrules (3). Although adopting
`further harmonized international rules may mean that developing
`countries have to devote fewer resources to patent examination,
`by the sametoken they will furtherlose the policy freedom avail-
`able under TRIPSto chooserules better suited to their needs. A
`regional approach might