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28 September 2017
Patents are essential for incentivising innovation and the development of new and improved pharmaceutical products. They give innovative laboratories exclusive exploitation rights over their pharmaceutical products for 20 years, after which other laboratories can develop their own generic version to compete with the original product.
On August 9 2017 the Federal Economic Competition Commission (FECC) released a study on the free market and competition in the expired patent drug market. The study analysed the level of competition in various drug markets following the expiry of an original drug's patent.
The FECC used different measures to conduct its analysis, such as:
In total, the FECC considered 167 'molecule patent' drugs.(1)
Through this analysis, the FECC concluded that:
More specifically, the study showed that for four out of 10 drugs analysed, no generic versions existed on the market, even though the original drug's patent was already in the public domain.
This delay in the entry of generic drugs to the market shows that the so-called 'Bolar' clause is not being used. This clause allows laboratories that want to manufacture generic drugs to start experimenting and requesting the paperwork to acquire sanitary registration three years before the original product's patent expires.
According to the FECC, the foregoing is a result of several obstacles to competition relating to industry regulations and the behaviour of the innovative laboratories which develop original drugs and hold the associated patents. These obstacles – which ultimately discourage possible new competitors from developing generic versions of the drugs and entering the market – may be summarised as follows:
The FECC issued a series of recommendations which aim to increase the number of generic drugs competing in the market and facilitate and accelerate their market entry:
Further, the immediate entry of generic drug products to the market should be promoted. In order to incentivise the entry of generic products to the market, the FECC emphasised the importance of the Bolar clause and recommended the establishment of a periodically updated list of drugs whose patents will expire in the next three years.
The FECC study is an important effort to understand the regulatory obstacles to fair competition in the Mexican expired patent drug markets. However, because the sample used to generate the study was limited, the FECC must perform a deeper analysis of specific cases and continue to study these markets, considering all of the different links in the supply, distribution and marketing chain.
As a result of the study, the FECC may identify evidence of monopolistic practices that are affecting the markets and thus open investigations to unveil such conducts and the parties behind them.
For further information on this topic please contact Lucía Ojeda Cárdenas or Felipe García Cuevas at SAI Consultores SC by telephone (+52 55 59 85 6618) or email (firstname.lastname@example.org or email@example.com). The SAI Consultores website can be accessed at www.sai.com.mx.
(1) The FECC has defined a 'molecule patent' drug as a combination of the drug's active ingredient and the patent number that covers it. The criteria used to identify such active ingredients is expired patents.
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