Intellectual property rights are legally recognized rights to contribute to technological development and to encourage private sector participation in certain areas. Given the costly and time-consuming process of drug development, which requires large investments over many years, IP protection (patents and others) on pharmaceuticals should be strong so that such investments can pay off for companies and researchers, and so that new studies on new medicines can be carried out for public health. In other words, while IPRs are important for every industry, in the pharmaceutical industry they are vital for promoting innovation and bringing innovative medicines to market.
There are 3 main applications used to protect intellectual property in pharmaceuticals:
Patent:
Pharmaceuticals are subject to patent as an invention and the intellectual rights of the patent right holder need to be protected. By protecting the intellectual rights, it will be possible to encourage invention and to keep the secrets of the inventor. However, today, in the face of the existence of regulations on pharmaceutical patents, a balance is tried to be created between the patent right and the right to health, considering the priority of the right to health, and special regulations are made for this purpose in pharmaceutical patents.
Patents in pharmaceuticals are possible as per Article 27 of TRIPS, provided that they are "new, involve an inventive step and are applicable to industry". Pharmaceutical patents can be obtained under 7 different headings: product patent, salt-hydrate and polymorph patent, formulation patent, combination patent, use-indication patent, method patent, dosage patent. Patent rights in the pharmaceutical industry provide protection for 20 years from the discovery of the molecule (TRIPS Article 33). However, considering that it takes approximately 12-15 years for pharmaceutical companies to transform a patented molecule into a marketable drug, the period of active use of patent protection is reduced by 5-8 years.
Data Exclusivity:
Pharmaceuticals are heavily regulated at clinical trials, licensing, pricing and reimbursement stages. From the discovery of the active substance, it is mandatory to file a patent application in order to meet the patentability criteria, especially the novelty criterion. Since the drug has not yet been licensed at this stage (since an unlicensed patented drug cannot be placed on the market), the effective patent term is shortened. With the idea of compensating for this shortened period, patent term extension and data exclusivity have come to the agenda.
In order for a medicine to be placed on the market, it must be approved, i.e. licensed. For this, the efficacy and safety of the medicine must be proven by research data. Data exclusivity covers the protection of all research data submitted by the investigator pharmaceutical company to the Ministry of Health during the marketing authorization process. Today, in developed countries, data submitted to the competent authorities are protected for a certain period of time to prevent unfair competition, to prevent other companies from referencing and disclosing the data. This practice, which is based on Article 39 of the TRIPs agreement, is called "data exclusivity" in international law.
Brand:
INN (International Nonproprietary Names) INN names are internationally accepted names accepted by the World Health Organization ("WHO") to identify the active ingredient or pharmaceutical ingredients in medicines. These names are in the public domain and cannot be used as product trademarks. Companies also cannot use the brand name of another company.
IPR Protection for Pharmaceuticals in Türkiye:
Until 1995, when the Decree Law No. 551 on the Protection of Patent Rights entered into force in Türkiye, the Patent Law of 1879 did not allow pharmaceuticals to be the subject of patents in Türkiye.
With the ratification of the WTO Establishment Agreement on April 15, 1994, and the ratification of the Agreement by the Turkish Parliament on January 26, 1995, the TRIPS agreement on intellectual property rights, which is an annex to the Agreement, entered into force for Türkiye. Article 70, paragraph 8 of TRIPS stipulates that pharmaceuticals shall also be subject to patent rights. Türkiye adapted the patent protection to its national legislation; did not use the transitional period right arising from the TRIPS Agreement (according to TRIPS, Türkiye had the right to postpone this application first until 2000 and then until 2005) and provided patent protection as of January 1, 1999 for applications accepted since 1995. In other words, this law only covers molecules for which patent applications were filed after 1995. It does not protect original medicines whose patent rights were registered before 1995.
Data Exclusivity:
Under the data protection obligation arising from TRIPS, Türkiye introduced a 6-year data exclusivity scheme in January 2005, which will provide market exemption for innovator companies producing originator medicines. However, the duration of the data exclusivity is envisaged to be 6 years starting from the date of first marketing authorization in the Customs Union area; however, starting this period from the date of first marketing authorization in the Customs Union area does not provide adequate protection and considering the long marketing authorization processes in Türkiye, it is seen that the 6-year protection granted in the regulation is not provided in practice in Türkiye.
In this context, AIFD expects that the data exclusivity period should be revised to start from the date of the first license in Türkiye. In addition, the duration of data exclusivity should be revised to 8 years in line with the EU acquis (2001/83/EC). In the same context, it is also important to provide 2 years of market exclusivity for products benefiting from data exclusivity.
On the other hand, another practice that is unfair and contradicts the logic of data exclusivity is the acceptance of essentially shortened applications within the 6-year data exclusivity period and the continuation of the licensing procedures within this period. The 8+2+1 rule in the data exclusivity in the EU legislation includes an 8-year data concession during which no abbreviated application is allowed and then a plus 2-year market exclusivity during which the abbreviated application is accepted but not allowed to be placed on the market. The protection introduced in the Regulation on Marketing Authorization is data exclusivity and no reference should be made within the 6-year period to original product data and no abbreviated applications should be accepted by TITCK.
WTO Compliant Compulsory Licensing:
Compulsory licensing is when a state allows someone else to produce the patented product or process without the consent of the patent holder. In the current discussion, this is usually associated with pharmaceuticals, but can apply to patents in any field.
TRIPS allows compulsory licensing as part of the agreement's attempt to strike a balance between promoting access to existing medicines and encouraging research and development into new medicines. However, the term "compulsory licensing" does not appear in the TRIPS Agreement. Instead, the title of Article 31 includes the phrase " Other Use Without Authorization of the Right Holder", of which compulsory licensing is only a part, since "other use" includes use by states for their own purposes.
Compulsory licensing of a patent without the consent of the owner and its use by the state can only be done under a number of conditions aimed at protecting the legitimate interests of the patent owner. The person or company applying for a license must have first sought to obtain a voluntary license from the right holder on reasonable commercial terms (Article 31b) and, if a compulsory license is granted, adequate remuneration must be paid to the patentee (Article 31h).
However, for "national emergencies", "other circumstances of extreme urgency" or "public non-commercial use" (or "government use") or anti-competitive practices, there is no voluntary license requirement.(Article 31b)
Compulsory licensing is also required to meet certain additional requirements. It cannot be granted exclusively only to licensees (e.g., the patent holder can continue to manufacture) and must generally be granted mainly to supply the domestic market.
In this context, regarding the implementation of the compulsory license provision regulated under Article 132 of the Industrial Property Law in our country, first of all, it is necessary to notify the patent owner and to clarify whether " the use of the invention to meet the public interest sufficiently can be realized by the patent owner " as stipulated in the law, to regulate how and how long these steps will be completed, and to clarify the processes regarding the license fee to be paid to the patent owner in case of a compulsory license mechanism.
Key Global Developments on Pharmaceutical IPR:
At the WTO's TRIPS Council in October 2020 in the aftermath of the COVID-19 pandemic, India and South Africa proposed that the WTO waive the application of certain provisions of the TRIPS Agreement for the duration of the pandemic in order to facilitate broader access to technologies necessary for the production of vaccines and medicines. In May 2021, the course of negotiations changed when the United States, which had initially opposed such a waiver, announced its support for a waiver limited to COVID-19 vaccines. While negotiations gained momentum following the US announcement, WTO members remained divided on key details and negotiations stalled again in late 2021.
In order to overcome the impasse, the WTO Director-General initiated small group consultations in December 2021, which resulted in a proposed TRIPS waiver text that was circulated to WTO Members on May 3, 2022. After the waiver text was leaked to the press, Members' review and mutual negotiation processes intensified, culminating in the WTO Ministerial Conference on June 17, 2022, which adopted the "Ministerial Decision on the TRIPS Agreement: TRIPS Waiver" was published.
According to the text, eligible WTO Members are permitted to waive certain intellectual property protections to facilitate the production and supply of COVID-19 vaccines, the contents of which are summarized below:
Finally, the General Council meeting of 20 December 2022 postponed the 6-month deadline for consideration of extending the scope of the waiver to include diagnostics and therapeutics and decided to decide on the matter at its meeting on 2-3 March 2023.
WTO Process on Localization:
Another issue that was followed up by AIFD in 2022 within the scope of the WTO and during which members were regularly informed was the process that started in 2019 when the EU brought the measures taken by Türkiye to localize the production of a significant portion of the medicines sold to the WTO's Dispute Settlement Understanding (DSU) mechanism .
On March 22, 2022, EU and Türkiye announced their decision to proceed to arbitration under Article 25 of the DSU. On April 25, 2022, Türkiye filed a Notice of Appeal (Notice of Appeal) to arbitration under Article 25 in accordance with the agreed modalities. This notification also included the panel's report to the parties, and as such, the panel report became public.
In the Panel Report, the EU objected to three Turkish measures: the "localization obligation", the "import ban on localized products" and the "prioritization measure". The report is summarized below:
a) Regarding the localization obligation: The Panel rejected Türkiye's argument that the localization requirement was a public procurement by the state within the meaning of Article III:8(a) and held that it was inconsistent with the principle of national treatment under Article III:4, as argued by the EU. The Panel also rejected Türkiye's argument that the localization requirement was an exceptional measure under Article XX: (b) of the GATT 1994 for the protection of human, animal or plant life or health. The Panel also rejected Türkiye's argument that the requirement was a necessary measure under Article XX: (d) (Compliance with Domestic Legislation) of the GATT 1994 to ensure compliance with certain laws and regulations requiring Türkiye to provide accessible, effective, and financially sustainable health care in accordance with the provisions of the GATT 1994.
b) Regarding the import ban on localized products: In light of the findings on the localization requirement, the Panel did not need to make a decision on this allegation.
c) Regarding the Prioritization Measure: The Panel finds that the prioritization measure violates Article III, paragraph 4 (National Treatment) of the GATT 1994: 4 of the GATT 1994 (the National Treatment principle).
Subsequently, on July 25, 2022, the arbitration announced its final award. The award is final and binding. According to the arbitral award:
- Localization is not a government procurement and therefore cannot benefit from the exception of Article III.8(a),
- Since the localization obligation is not covered by the public procurement exception, it is subject to the national treatment obligation in Article III, Article 4 of the GATT 1994, and Article 2.1 of the TRIMs Agreement: 4 of the GATT 1994 and Article 2.1 of the TRIMs Agreement,
- It rejected Türkiye's argument that "the decentralization obligation falls within the scope of policies to protect human life and health covered by the general exception in Article XX(b) of the GATT 1994",
- Similarly, it rejected Türkiye's argument that the localization obligation under Article XX(d) of the GATT 1994 was also exceptional in terms of ensuring compliance with its own laws and regulations in accordance with the provisions of the GATT 1994 in order to maintain affordable universal health care services.
Based on these findings, the Arbitration recommended that "Pursuant to Article 19.1 of the DSU, we recommend that Türkiye bring its measures found to be inconsistent in this Award and in the Panel Report as modified by this Award into conformity with its obligations under the GATT 1994."
