Kassilgov & Partners and Legalmax Law Firm successfully defended in court the rights of the original medicine manufacturer applying the “data exclusivity” institute

Problem description

One of the current problems the pharmaceutical companies (right holders and original medicine manufacturers) face in the Kazakhstan market is a violation of their rights by individual generic drug manufacturers expressed in using by them the confidential data from the original medicine registration dossier in order to obtain marketing authorization for their own generic drugs.

This issue is particularly relevant for pharmaceutical industry leaders, manufacturers of new medicines, which have no patent protection in Kazakhstan or have the expired patents.

Our lawyers have represented in courts of first, appeal and cassation levels, a leading American biotechnology company (“Plaintiff”) focused on development and sale of medicines for cancer and inflammatory diseases, on the issues of the Plaintiff’s right defense through applying the legislative novel (amendments to the legislation were made as a part of Kazakhstan accession to the WTO) - the data exclusivity institute. Our previous article “Data Exclusivity Institute in Kazakhstan and Its Influence on Activity of Pharmaceutical Companies” demonstrates in more detail the specifics of the legal regulation of the data exclusivity.

The essence of the dispute was as follows: in 2016 the Plaintiff registered in Kazakhstan the original medicine with Azacytidine as an active substance, and imported and marketed it in the country. However, in 2017, the Indian generic company (“Defendant”) obtained in Kazakhstan a Registration Certificate for a generic drug (“generic”) with the international non-proprietary name "Azacytidine" and introduced it into a stream of commerce along with the original medicine. Since according to the Plaintiff that due to the rules on data exclusivity, registration of a generic for original medicine during the data exclusivity six-year period is illegal, in September 2017, the Plaintiff filed a claim to the Specialized Interdistrict Economic Court of Almaty, to:

1)      recognize the generic registration in the Republic of Kazakhstan as illegal;

2)      recognize the opinion of the Center for Expertise with regard to generic as illegal;

3)      bind upon the Pharmacy Committee to revoke the Registration Certificate for generic.

The co-defendants in the case were Defendant, the Center for Expertise and the Pharmacy Committee. The litigation lasted a year and a half and was resolved in March 2019.

Findings of the courts of first and appeal levels

In the previous publication we indicated that Article 71 (cl.19) of the Code of the Republic of Kazakhstan “On People's Health and Health System (The RK Code on Health) provides for a six-year period of data exclusivity in Kazakhstan from the original medicine registration date. It should be noted that the Plaintiff does not have a patent for the active substance, therefore, in this case, the violation of data exclusivity period for the original medicine was the only ground for legal action. The Plaintiff’s position was based on the following interpretation of the rules on “data exclusivity” as applied to the dispute in question: examination and registration of a generic without consent from the Original Medicine Registration Certificate Holder for six years from the date of the original medicine registration are illegal, since the procedures for examination and registration of the generic inevitably involve the commercial use of confidential information contained in the original medicine registration dossier.

For the lack of judicial practice on a similar issue, the case was not easy, and the Plaintiff lost this case in the courts of first and appeal levels. The refusal to satisfy the claim was motivated by the following:

1)    the original medicine registration application does not contain a data exclusivity mark;

2)    the Plaintiff does not possess a patent or copyright certificate for the medicine;

3)    the Plaintiff did not provide evidence confirming the disclosure and commercial use of confidential information in the process of generic registration;

4)    the Plaintiff failed to prove that the examination of the generic and its registration without the Plaintiff’s consent prior to expiration of the data exclusivity six-year period means a violation of Article 71 (cl.17) of the RK Code on Health.

Disagreeing with the rulings issued by the local courts, which were based on the misinterpretation of the rules on “data exclusivity”, the Plaintiff filed a petition to the Supreme Court of the Republic of Kazakhstan to review the court acts under cassation procedure.

Findings of the Supreme Court and retrial

The Supreme Court of the Republic of Kazakhstan annulled the judicial order issued by the court of appeals and sent back the case for review to a differently constituted court of appeals. The highest court found that the local court had come to the wrong conclusions due to misinterpretation of the rule on the data exclusivity period (Article 71 (cl.19) of the RK Code on Health), and the fact of generic registration under the original medicine during the data exclusivity period is a violation of the Plaintiff’s rights. As a result of the retrial, the Plaintiff’s claims were satisfied in full.

Key findings of the court in the case:

1)    neither the legislation of the Republic of Kazakhstan, nor rules contained in international treaties, provide for the requirement to have a data exclusivity mark in the medicine registration application;

2)    information about the medicine filed for the state registration is confidential;

3)    Article 71 (cl.19 and cl. 20) of the RK Code on Health is intended to protect the original medicine registration certificate holders from direct or indirect use for commercial purposes of information provided by them for registration of a medicine without their consent by other persons for registration of other medicines;

4)    due to the peculiarities of the generic examination procedure, which includes the comparative studies with the original medicine (aimed at extrapolation for the generic of the results of non-clinical trials and clinical studies conducted on the original referenced medicine), as well as examination of the package leaflet of a generic for compliance with the package leaflet of original medicine, it is impossible to register a generic without the commercial use of confidential information on the original medicine that is subjected to protection from use if no consent obtained from the applicant;

5)    the medicine data exclusivity is an independent way to protect the data in the original medicine registration dossier, and can be used independently of other methods for exclusive right protection (including cases when the patent is absent);

6)    generic examination for the original medicine and generic registration without the Plaintiff’s consent during the data exclusivity period is a violation of the Plaintiff’s rights, since the generic examination and registration process inevitably includes the commercial use of confidential information from the state registration application, examination materials, as well as the original medicine registration dossier.

Thus, the strategy developed by lawyers contributed to creating a judicial precedent according to which the generic drug registration for six years after the original medicine registration is illegal if the applicant does not have consent received from the Original Medicine Registration Certificate Holder to use the data from the original medicine registration dossier.

Importance for business

The application of the data exclusivity principle allows the holder of patent for original medicine, which expires in the near future, to obtain an additional protection period, e.g. in cases where a medicine is filed for registration at the end of patent protection (due to lengthy clinical trials, marketing policy, etc.) or for any other reasons.

After registration of the original medicine when the patent is expired or even in the absence of patent, the registration dossier data is still subjected to protection, therefore, during the six-year protection period from unfair commercial use, no one other than the person providing secret information and test data on the original medicine shall, without the express consent of the person providing such secret information and test data, refer, directly or indirectly, to such data supporting an application for generic access to the market in Kazakhstan. During this six-year period, any subsequent generic registration application should not be accepted, unless the applicant provides the consent from the Original Medicine Registration Certificate Holder to use the original medicine data; and generics registered without such consent must be removed from the market until the elimination of violations.

We hope that the successful resolution of this dispute in favor of the Plaintiff will lay the foundation for a positive law enforcement practice that meets international standards, principles and rules of international law. This will create the conditions for more effective protection and enforcement of pharmaceutical companies’ intellectual property rights in Kazakhstan, which will undoubtedly have an effect on the investment attractiveness of Kazakhstan.

The Client's interests in the courts were represented by Zhanna Abylkhanova, Partner, Legalmax Law Firm and Ravil Kassilgov, Managing Partner, Kassilgov & Partners

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