Intellectual Property

This article was written for the Management Forum conference on GENERIC MEDICINES:LAW, REGULATION & MARKETPLACE which took place on 28th November 2005

Data Exclusivity 2005 – New Legislation, New Case Law


On October 30th 2005, important new legislation, Directive 2004/27, amending the Community Code, was implemented in Europe.In this article, I consider the impact of the changes in law for the Generic Pharmaceutical industry, and in particular, the impact of the new legislation on Data Exclusivity and how the law might develop in future.

Data Exclusivity – Legislative Background

Directive 87/21 introduced a harmonised procedure for abridged applications for “essentially similar” (generic) products into Europe, and with it, the concept of Data Exclusivity. It came into being at a time when the EEC was expanding, and having to cope with different cultures relating to regulation and Intellectual Property.In 1987, legislation needed to take account of the accession of Spain and Portugal, which did not have a history of patents for pharmaceutical formulations, and also to reflect requirements to protect data on new chemical entities required by TRIPS1 .It was designed to strike a balance between innovative firms, the generics industry and the public, and to take account of public policy reasons for avoiding repetitive tests on humans and animals.The new form of protection it introduced was additive to patent protection and was intended to compensate for the lack of patents in countries which were then joining the EC. In essence, it allowed products which were ‘essentially similar’ to products which had already been marketed for 6/10 years (depending of the election of the Member State concerned, to be registered without the applicant supplying safety and toxicological data : the regulatory authority (not the generic company!) would refer to the originator’s data to determine safety.

There have been various changes in legislation since 87/21, and the law has also been developed by cases referred to the ECJ.The most recent directive, Directive, 2004/27/EC, amending the Community Code, Directive 2001/83, was supposed to be put into effect by all Member States by the 30th October 2005.In practice, its implementation is incomplete.It introduces a harmonised time frame for the protection of regulatory data across all the Member States (the “8+2+1” Provision).Those harmonised time periods apply only in relation to applications for generic products relating to medicinal products authorised in Member States after the 30th October 2005, but the rest of the Directive applies immediately.

Below, I consider the legislation and caselaw which preceded Directive 2004/27 and its relevant to our understanding, of the new regime.

Directive 2001/83

Directive 2001/83, like previous legislation relating to data exclusivity, was based on the concept of “essential similarity”. It allowed an abridged procedure to be used for applications for medicinal products which were “essentially similar” to products which had been on the market forsix or ten years, depending on the election of Member States (ten years for products applied for through the centralised procedure). After that period, regulatory authorities could refer to originators’ safety and efficacy data.. Article 10 of the Directive, stated

“…without prejudice to the law relating to the protection of industrial and commercial property:

  • (a) The applicant shall not be required to provide the results of toxicological and pharmacological tests or the results of clinical trials if he can demonstrate:
  • (iii)..that the medical product is essentially similar to a medicinal product which has been authorised within the Community.. for not less than [six/ten] years and is marketed in the Member State for which the application is made..

    However, where the medicinal product is intended for a different therapeutic use from that of other medicinal products marketed or is to be administered by different routes or in different doses, the results of appropriate toxicological and pharmacological tests and/or of appropriate clinical trials must be provided”.(the ‘Proviso’)

  • Case Law

    There is a body of case law relating to Directive 2001/83 and its precursors.This is summarised below. All of the cases I mention, except for the MSD Fosamax case, were decided by the ECJ.

    Generics2: new indication

    The Generics case concerned the grant of a licence for a product for a new indication for which the innovator’s product had been licensed for less than 10 years.The product had been marketed for more than 10 years for other indications.Could the health authority refer to the data lodged by the innovator on the new indication?

    The ECJ concluded that:

    “a medicinal product is essentially similar to an original medicinal product where it satisfied the criteria of having the same qualitative and quantitative composition in terms of active principles, of having the same pharmaceutical form and of being bio-equivalent, unless it is apparent in the light of scientific knowledge that it differs significantly from the original product as regards safety or efficacy”.


    “A medicinal product that is essentially similar to a product which has been authorised for not less than [6/10] years in the Community and is marketed in the Member State for which the application is made may be authorised, under the abridged procedure…for all therapeutic indications already authorised for that product”.

    Finally, in relation to new dosage forms and the like the ECJ held that:

    “A medicinal product that is essentially similar to a product which ahs been authorised for not less than [6/10] years in the Community and is marketed in the Member State for which the application is made may be authorised, under the abridged procedure…for all dosage forms, doses and dosage schedules already authorised for that product”.

    The Generics case established that regulatory authorities could, for an essentially similar product, refer to an innovator’s data for all of the indications and dosage forms licensed to the innovator as at the date on which the application was submitted.The case is important not only because the court defined what is meant by “essential similarity” but also because it shows how the court reconciled the conflicting interest of innovators and generic companies.In particular, it shows the absence of weight to be given to expenditure and time and costs by innovators in developing their product.

    It also explains the importance of protection afforded to innovators by Intellectual Property Law to which the data protection given by Article 10 is only an addition.

    Therapeutically Equivalent Products:Zimovane cases3

    The Generics case concerned a change to the reference product’s indications. What happens once the reference product has been changed in some way, where the formulation differs from that of the product originally marketed, when the reference product has been withdrawn.?These were the issues in the Zimovane (zopiclone) cases, where the reference product’s formulation had been changed during the period for which it had been marketed, and the original product withdrawn from some countries.

    Zimovane came on to the market in the EU in 1984/5, and in 1994, RPR applied to vary its licence based on an improvement to an excipient.In 1996, the MCA at RPR’s request revoked the existing licences for “old Zimovane” and granted new licences for “new Zimovane”.

    Various generic pharmaceutical companies applied for product licences, seeking to use “old Zimovane”, whichhad been authorized for more than ten years, as the reference product.

    The judge had to consider whether the MCA had been correct in granting a licence .To succeed it had to be demonstrated that:

    1. the form of zopiclone which the generic companies were to sell (old form) was essentially similar to the reference product;
    2. the reference product must have been authorized within the EEC for not less than ten years;and
    3. the reference product was being marketed in the UK.

    There was no question of the MCA being able to exercise a discretion.Unless the generic companies could demonstrate what was necessary, the application could not be granted.

    RPR argued that if the comparator was old Zimovane, which had been authorized for more than ten years, it was no longer being marketed in the UK.If it was new Zimovane, it had not been authorized for the necessary 10 year period.Either way the MCA should not, they argued, have referred to their regulatory data.

    Strictly, the products were different, because they contained a different excipient. The court, however, was clear that a strict approach (as would have been applied under English law in relation to UK legislation) was not appropriate.The directive should be construed purposively. The legislation was concerned with ensuring that the therapeutic effect of the products were the same. The tests and trials referred to in the legislation relate to product safety and efficacy. Changes to the excipient were only relevant if they affected the therapeutic value of the product.Provided that the therapeutic value of the product had not changed, it could be regarded as the same for the purpose of the directive if the therapeutic value and safety and efficacy remain the same, then essential similarity was demonstrated.

    The decision was important.It ensured that innovators could not prevent the use of their regulatory data simply by withdrawing or changing the reference product in the absence of any evidence that the old form of the product was harmful under its normal conditions of use.

    Now, with the benefit of hindsight, following the Novartis case (seebelow), the decision in thezopiclone generic case seems obvious – but it was not so at the time. Contemporaneously with that case, parallel importers of Zimovane preparations lost their case in the English High Court – they wanted to import ‘old Zimovane’ into the UK, and the court decided that it did not satisfy necessary criteria for similarity.I think it is worthwhile remembering this – judgements can turn on fine distinctions, and registrations be stopped on grounds that seems slight.

    Novartis4– the Proviso.

    The decisions in Generics and RPR ‘Zimovane’ cases left open the question of whether an applicant could rely on data supplied by an innovator where the generic product, product C, was not essentially similar to the original product (A) but was essentially similar to a development of that product, product B.Novartis had developed an original product “A”, Sandimmun, into another product, “B”, Neoral, which was not bio-equivalent to Sandimmun.Novartis has carried out clinical trials on Neoral, which was a superior, suppra-available product, with a patented formulation.Sandimmun was a macro-emulsion, and Neoral a micro-emulsion. Neoral had been marketed for less than 10 years.The generic company manufactured a nano-suspension which did not infringe the patent and was essentially similar to Neoral. The ECJ ruled that although bioavailability was not explicitly referred to within the proviso, it was implicit.The generic applicant could provide the results of ‘appropriate tests and trial’ and could rely on the bridging data on which the innovator had relied in relation to Neoral, and the original data in relation to Sandimmun.It was accepted that the products were not essentially similar, and stated that the purpose of the proviso was to allow applicants whose product differed from an existing product in the ways stipulated or implied by the proviso to submit only bridging data.

    APS5– different pharmaceutical form

    APS also related to an application for a product , C, which was not in the pharmaceutical form of the original product A, but in the form of the development, product B. Prozac had been authorised in capsule form for more than ten years, and APS sought to market a liquid form of the drug, fluoxetine, liquid Prozac having been marketed for less than ten years. The court applied the same logic as in Novartis.In other words, it determined that pharmaceutical form, whilst not expressly referred to in the proviso, was implicit within it.

    There was an additional argument in APS.It was argued that the generic applicant must apply under the proviso, since the products differed in form, but the Advocate General and Court stated that this was not necessary.The Advocate General concluded that:

    “There are good reasons against requiring an application in respect of product C to proceed under the proviso.The proviso operates in circumstances where bridging data are required because of a difference between the new product and the earlier product or products to whose data reference is made.Where product C claims essential similarity to product B which is a variant of product A, no additional data are required.There is therefore no need to proceed under the proviso”.

    MSD Fosamax6

    The English MSD Fosamax case is the latest in the long line of cases before national courts and the European Court of Justice in which the balance of interest between innovators and generic pharmaceutical companies, and the meaning of Directive 2001/83/EC and its precursors have been considered.

    Fosamax 5mg was authorised in the EU in 1993, Fosamax 10mg in May 1995 and Fosamax Once Weekly in November 2000. Teva, Generics and Arrow wanted approval for Alendronate 70mg, the once weekly preparation.Could the MHRA grant licenses to them for this form under the abridged procedure, even though it had not been marketed in the UK for ten years? MSD claimed that the matter had not been determined by previous cases and that there should be a reference to the ECJ.

    MSD relied on three distinctions from previous decisions:First, the difference between MSD’s original products (Fosamax 5mg and 10mg “A”) and the development (Fosamax Once Weekly 70mg “B”) was one of posology (dosing schedule), a difference that had not been the subject of previous decisions.Secondly, Fosamax Once Weekly had multiple differences from the reference product A (strength and bioavailability) and finally, MSD had received authorisation for Fosamax Once Weekly following a full “stand alone” application, not an application under the hybrid abridged procedure – it did not rely on bridging data, and hence, so MSD argued, the generic applicants should not be entitled to do so.

    There was a more fundamental argument, namely that there was no statutory rule for allowing registration through the abridged procedure of products which were not essentially similar.In other words, the whole basis of the ECJ’s case law concerning the proviso was wrong.

    The Judge decided that changes in bioavailability were implicit in Novartis.A change in route of administration usually entails different bioavailabilities.Arguably, posology is included in the proviso (“different doses”).However, the Judge felt that even if the word “dose” was given a restricted meaning of strength, a change in posology fell implicitly within the proviso:a change in dose generally entails a change in posology.

    In relation to the second point, the judge concluded that the fact that Fosamax Once Weekly differed in more than one respect from Fosamax 5mg and 10mg did not take it out of the proviso.And, he concluded, it would undermine the purpose of Article 10 to provide a further period of protection merely because the innovator had changed the frequency with which doses should be taken by increasing strength.And it would be wrong if an innovator could acquire a further period of protection, merely because the authority had sanctioned a full, as opposed to a hybrid abridged, application.Generic companies could not influence the manner in which innovators applied for product licenses on their developments.

    The Judge concluded that generic companies could not be required to provide further data under the proviso where their product was essentially similar to the innovator’s product B, (the development).Any other construction would not achieve the objective of the recitals of avoiding unnecessary repetitive tests.The only purpose would be to give a further period of protection to innovators – but they were already protected by Intellectual Property Rights, and by Article 10.

    Finally, the Judge rejected MSD’s submissions that the previous ECJ decisions were wrong, in that the proviso only applied where the generic product is essentially similar to the original product.Such construction would not achieve the primary purpose of the Directive.Rather, it was inconsistent with the Directive.If the generic product was essentially similar to a development, i.e. was no less safe or efficacious than the development, the only purpose to be achieved by giving the further period of protection was to protect the innovator.

    Applying a purposeful approach, it does not matter whether an application is regarded as being under Article 10(1)(a)(iii) or under the proviso.In either case, the matter to be determined was whether further tests have to be carried out, and whether or not the product is essentially similar.That is the construction which is required in order to achieve the objectives of the Directive.In other words, the purpose of the legislator, the philosophy behind the legislation, is to be taken into account in determining meaning.Hence, it does not really matter whether an application is made under the proviso or not:what is important is that the purpose of the legislator as expressed in the recitals is followed.

    Reviewing the case law, the Judge decided that the principles enunciated by the court in Generics, Novartis and APS applied.There was nothing further to be determined by the European Court and a reference was refused.The ECJ had not specifically considered a change in posology before, but it had considered the principles by which the Treaty was to be interpreted, and the domestic court had to apply these.The MSD case raised no new issues of principle.

    Directive 2004/27.

    Provisions for data exclusivity and abridged registration procedures were introduced at a time when the EEC was expanding, and having to cope with different cultures relating to regulation and Intellectual Property.The legislation adopted in 1987 allowed countries to choose the period of protection they afforded data protection – six or ten years, and thus offered some accommodation for different attitudes towards the protection of innovator’s data.Of course, it resulted in regimes applying in different countries.Companies wanting to market generic product might have to consider a whole variety of patents, SPCs, and different data protection periods.Generic products might be available in one country, and not in another, with prescriptions written generically in both, so that a prescription written in a country where there was still data protection could be filled by a parallel import from a country in which the price of the innovator’s product had been eroded by generic competition.

    The 2004 Directive has harmonised time periods for registration., and that is undoubtedly its main achievement.No one can take advantage of that until 2013 – it only applies in relation to reference products which are authorised after 30th October 2005.


    2004/27 amends Article 10 of 2001/83 to read:

    “1…without prejudice to the law relating to the protection of industrial and commercial property, the applicant shall not be required to provide the results of pre-clinical tests and clinical trials if he can demonstrate that the medicinal product is a generic and/or reference to the medicinal product which is or has been authorised .. for not less than eight years in a Member State or in the Community.
    A generic medicinal product authorised pursuant to this provision shall not be placed on the market until ten years have elapsed from the initial authorisation of the reference product…
    The ten year period…shall be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorisation holder obtains an authorisation from one or more new therapeutic indications which, during the scientific evaluation time prior to their authorisation, are held to bring a significant clinical benefit in comparison with existing therapies”.

    So, for the first eight years, the regulatory authority can’t look at the innovator’s safety and toxicological data.If a company wants to apply for a generic product within that time period, it must do its own safety and toxicology work, its own clinical trials (if it can).This is not always possible.There may be ethical reasons against carrying out trials, and of course, costs may be prohibitive for a generic product.After eight years, the regulatory authorities can cross-refer to the innovator’s data on safety and toxicology.Sometimes, critics of the abridged procedure talk as if the generic company itself had access to innovator’s data after expiry of the period of exclusivity.It does not!The innovator’s data remains confidential.However, the regulatory authority can take account of it.

    And, the generic company must wait another two years before it can actually market the product.In other words, the innovator has at least ten years of market protection even if his patent has passed into the public domain.

    If an innovator obtains an authorisation for one or more new therapeutic indications which are held to bring a significant clinical benefit in comparison to existing therapies, he is entitled to another year of protection, taking the total to eleven years.It seems that that extra year applies to all indications, including the indications which were initially permitted. The MHRA has said that in its view “significant clinical benefits” require that no product containing the same active substances has previously been authorised in the relevant indication and/or extended to new categories of patients.I am sure there will be argument here! It seems that if a product is used “off label” then formal application later made for that indication, the innovator should not be entitled to the additional one year, but my guess is that innovators will want that extra year in such a case.We shall have to wait and see. There is also provision for an additional (non-cumulative) year’s data exclusivity for new therapeutic indications which bring a significant clinical benefit made at any time. That extra year applies only to the new indication, and it would stop registration of generic products for that indication, but not off-label prescribing.

    Essentially Similar cf Generic

    Before 2004/27 the abridged procedure was available for “essentially similar” products.In 2004/27, instead of descriptions of essential similarity, the abridged procedure is stated to be available for “a generic of a reference medicinal product…”.A “generic medicinal product” is defined as a product which “has the same qualitative and quantitative composition in active substances and the same pharmaceutical form as the reference medicinal product, that is bio-equivalent with the reference medicinal product and has been demonstrated by appropriate bioavailability studies.The different salts, esters, ethers, isomers, mixtures of isomers, complexes or derivatives of an active substance should be considered to be the same active substance, unless it differs significantly in properties with regard to safety and/or efficacy.In such cases, additional information providing proof of the safety and/or efficacy…must be supplied by the applicant.The various immediate-release oral pharmaceutical forms shall be considered to be one and the same pharmaceutical form. Bioavailability studies need not be required if the applicant can demonstrate that the generic medicinal product meets the relevant criteria as defined in the appropriate detailed guidelines.

    This definition contains some of the products which were deemed to be “essentially similar” by virtue of case law.It would certainly include products with different excipients (zopiclone/Zimovane) and it would include capsules and liquids (APS) and different strengths (alendronate 10mg and alendronate 70mg), but it does not include different non-oral pharmaceutical forms.So, for example, a product of injectable form would not be regarded as a generic allowing reference to safety data on a capsule. In that respect, it differs from the Generics case in which the ECJ decided that:“An [essentially similar product] may be authorised, under the abridged procedure…for all dosage forms..already authorised for that product”.Different non-oral pharmaceutical forms now have to be authorised under the Article 10.3 of the Directive.

    Article 10.3

    Article 10.3 states:

    “In cases where the medicinal product does not fall within the definition of a generic medicinal product…or where bio-equivalence can not be demonstrated through bioavailability studies, or in case of change of the active substance(s), therapeutic indications, strengths of pharmaceutical form or route of administration, vis a vis the reference medicinal product, the results of the appropriate pre-clinical tests or clinical trial must be provided."

    Does it matter that products that have a different indication, strength, form or route of administration have to be dealt with under this section, rather than being treated as a generic?It is certainly different.Under the earlier legislation, products incorporating these differences might have been regarded as ‘essentially similar’, rather than being considered under the proviso, but my view is that it should not matter.European legislation is to be construed purposively.The purpose of the Directive is to avoid repetitive tests without overriding cause and paragraph 3 requires “appropriate –pre-clinical tests or clinical trials”.In some cases, results will simply not be appropriate, and it should not matter whether they are regarded as inappropriate because the product is a generic, essentially similar, or whether it is covered under this section.

    At the same time, it does not fit with the words of the Advocate General in APS, when he said “There are good reasons against requiring an application of a product which was essentially similar to a variant of a reference product to proceed under the Proviso.The Proviso operates under circumstances where bridging data are required because of a difference between the new product and the earlier products, or products to whose data reference is made.Where Product C claims essential similarity to Product B, which is a variant of Product A, no additional data were required.There was therefore no need to proceed under the Proviso”.

    Reference Product.

    2004/27 introduces provision for a European reference product. A generic manufacturer can now apply for a marketing authorisation in any Member State and rely on the dossier of information already submitted from the European Reference Product in another Member State.The other Member State must supply all the relevant documentation requested.

    Currently, some regulatory authorities, including the UK, will not supply confidential information on UK reference products:once the UK has implemented this provision (it has not yet done so) it will be obliged to support generic abridged applications in other Member States.Will that make a difference in practice?I think so, where different forms and perhaps different indications are registered in different countries.There may be more extensive information possessed by the authorities in one country than in the country from which the application is made.It seems to me that a generic company could apply for registration on the basis of the reference product in the country with more extensive information, perhaps enabling it to market a product with different dosages, and broader indications than the innovator’s own product in that country.Essentially, it seems to me that generic companies ought to be able to choose to refer to the most attractive marketing authorisations for their purposes, and to have their registrations reflect the scope of such authorisations.

    Bolar Provision.

    Long after the US adopted its “Bolar” Provision allowing a generic pharmaceutical company to conduct tests on a patentable compound before patent expiry, Directive 2004/27 provides for something similar.Until now, different countries have had different provisions as to the kind of work which might be carried out during patent term.Patent laws contained an “experimental use” exemption, but different countries have different views as to what is permitted under this exemption, and in practice, many companies carried out their clinical trials outside the EC.New Article 10.6 states :

    “Conducting the necessary studies and trials…and the consequence of practical requirements should not be regarded as contrary to patent rights or to SPCs for medicinal products”.

    National patent laws will have to be amended to take account of 2004/27, and there is no definitive list of the kind of studies and trials or “consequential practical requirements” which fall within exemption.There is a risk that each country will interpret this differently.The UK, and several other countries, has decided to adopt the wording of the Directive as it stands into Patent Law.In the UK, Section 60(5) of the Patents Act 1977 is to be amended so that the Bolar Exemption is added to the list of exemptions.The wording of the statute would thus accurately reflect the Directive – and it would be up to case law to determine exactly what this means.

    The MHRA has stated that in its view, the exemption should be interpreted to cover only “abridged” and “hybrid” abridged applications for marketing authorisations in the EEU and these include:

    1. The manufacture and importation of active substances in sufficient quantities to conduct trials and validate the manufacturing process in accordance with regulatory requirements.
    2. The development of the final pharmaceutical form of the actual substance.
    3. The conduct of pre-clinical tests, clinical and bioavailability trials and stability studies.
    4. The manufacture and supply to the regulatory authorities of samples of active substances, precursors, intermediates, impurities and finished product samples.
    5. The compilation and submission of a marketing authorisation application or variation application.

    The MHRA believes that activities undertaken for purposes other than applying for the marketing authorisation will not be exempted, e.g. tests to see whether the generic company can manufacture to suitable quality.It is not clear whether the subjective intention of the manufacturer is to be taken into account.If a company intends to apply for a marketing authorisation, but changes its mind, will its activities infringe patents or not?The MHRA believes that the Bolar Provision encompasses aborted development.

    Where can we expect conflict in future cases?

    Hybrid Abridged Procedure Article 10.3
    I think that there will be arguments as to whether all applicants under the Hybrid Abridged Procedure must supply data, or whether they must supply data only if it is “appropriate” to do so, and if it is appropriate to supply data, exactly what data is appropriate.I think there will be special difficulties where bioequivalence can not be demonstrated.
    Reference Product
    Current periods of data protection and market exclusivity are not harmonised.Where an abridged application is made in one Member State, and relies on a data belonging to another, what period applies?Is it the period of protection in the State for which the application is made, or the Reference State?There is no Europe wide agreement.The MHRA believes that the period of protection applied by the Authorising State is relevant, not that of the Reference State.This seems sensible to me:any contrary interpretation would undermine the ability of the Member State to choose the period of protection.But it is not clear.
    Bolar Provision
    Exactly what is permitted? Are subjective intentions to be taken into account?
    Additional one year period of protection.
    What constitutes “a significant clinical benefit?”

    Perhaps, in a year’s time, we shall have more case law to discuss!

    Anna McKay, December 2005

    • 1  TRIPS 39.3
    • 2  C-368 1996 R v MCA ex parte Generics (UK) Ltd, Squibb intervening
    • 3  Case C94/98 R v MCA ex parte RPR and R v MCA ex parte RPR, Trinity Pharmaceuticals and Norton Healthcare Intervening
    • 4  C-106/01 (on the application of Novartis Pharmaceutical UK Ltd v The Licensing Authority by the Medicines Act 1968
    • 5  C-36/03 Approved Prescription Services Ltd v The Licensing Authority
    • 6  1 - R (on the application of MERCK SHARP AND DOHME LTD) (v THE LICENSING AUTHORITY (ACTING BY THE MHRA) & (1) APS(2) GENERICS (UK) LTD (3) ARROW GENERICS (2005)[2005] EWHC 710 (Admin)
    • For more information on any of the above, contact me at:

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