Generics Group Predicts Patent Extensions in Brazil Will Cost Consumers US$104 mil. in 2007/08

The predictions made by Pro Genericos, which were reported in the Folha de São Paulo, were "worst case" scenarios based on the assumption that all research-based drug companies would be successful in their legal challenges against Brazil's intellectual property office, the INPI. According to Pro Genericos, products that could be affected by patent extensions include drugs used for treating heart problems and cancer, as well as other common ailments.

Pro Genericos arrived at its long-term predictions by considering the sales volume of all drugs that are currently undergoing patent litigation and predicting their consumption up until 2013. Pro Genericos took into account sales growth over the past two years, but did not take account of inflation and variations in the exchange rate. It then multiplied the average unit price and applied a discount of 35%, which is the legal minimum discount.

Lilly and Novartis Lose Patent Appeals

Innovator companies have been robustly defending their patents despite recently suffering a number of losses in the courts. According to the Folha de São Paulo, two innovator drug manufacturers were defeated in the Federal Regional Court (TRF-2) on 12 February. One of these was U.S. company Eli Lilly, which had applied for recognition of a foreign patent for its chronic pain reliever tezampanel.

The judge acknowledged that Eli Lilly had applied for patent protection in 1993, but also considered the fact that drug patent protection did not come into force in Brazil until the country signed the World Trade Organization's (WTO) Trade-Related Intellectual Property Rights (TRIPS) agreement in 1995. In declining the patent request, the judge ruled that Eli Lilly had failed to subsequently register tezampanel through the country's pipeline system, which was introduced by Brazil's 1996 Industrial Property Law.

The other failed patent protection case concerned Swiss firm Novartis's eczema drug Elidel (pimecrolimus), with the Swiss company applying to have the drug's patent extended by five years to 2014. However, according to TRF-2, this would be illegal because it would have meant a total patent period of 25 years.

Outlook and Implications

The rebuttals for Novartis and Lilly follow close on the heels of a high-profile defeat for Sanofi-Aventis (France) in its attempts to extend the patent on its anti-thrombotic drug Plavix (clopidogrel). In common with many other cases, Sanofi-Aventis lost its appeal after it was ruled that its product's patent runs from when it is first registered abroad, rather than from its registration in Brazil (see Brazil: 23 January 2008: Plavix Denied Patent Extension in Brazil). Nevertheless, some courts are reported to still be favouring innovator companies in cases such as this, and there appears to be a lack of legal consensus.

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