Specialist Chapter: Key Developments on Regulatory Data Protection and Patent Linkage in Mexico

In summary

This article will analyse two hot topics in the pharmaceutical and biotechnology industries in Mexico: regulatory data protection and the linkage system.

Discussion points

• Regulatory data protection in Mexico
• Mexican linkage system

Referenced in this article

• North America Free Trade Agreement
• Agreement on Trade-Related Aspects of Intellectual Property Rights
• United States–Mexico–Canada Agreement
• Federal Law for the Protection of Industrial Property
• Industrial Property Law
• Health Supplies Regulations

Introduction

Mexico is a relevant marketplace for many industries. It is the second-largest pharmaceutical market in Latin America. Thanks to its strategic geographic location, large population and highly qualified human capital at competitive costs, many companies consider it a very appealing investment focus and are nearshoring to Mexico.

Moreover, the Mexican intellectual property (IP) regime has been modernised since the ratification of the North America Free Trade Agreement (NAFTA) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 1994, bringing it almost in line with international standards. This benefited the biopharmaceutical industry as innovative activities depend on robust and enforceable IP rights.

More recently, the Mexican legal framework was further strengthened when the United States–Mexico–Canada Agreement (USMCA) substituted NAFTA on 1 July 2020. Consequently, the Federal Law for the Protection of Industrial Property (FLPIP) entered into force that same year to harmonise and re-adapt the Mexican IP system to the obligations now undertaken under this new trade agreement.

Thus, the Mexican IP system can generally secure the interests of pharmaceutical investors and companies. However, the system still faces some implementation hurdles and regulatory gaps since some of USMCA’s provisions remain to be fulfilled, and the specific regulations of the FLPIP have not been issued.

This article will analyse two hot topics in the pharmaceutical and biotechnology industries in Mexico: regulatory data protection and the linkage system.

Regulatory data protection in Mexico

Regulatory data protection refers to the exclusive use over a period of clinical or test information submitted to regulatory or health authorities to obtain market approval of a pharmaceutical product by its owner or licensee. Clinical data for evaluating a pharmaceutical product’s quality, safety and efficacy is generated by the company requesting marketing authorisation after a great effort in capital and time.

Thus, regulatory data protection for a reasonable period serves as an incentive for investment by pioneering companies in the development and commercialisation of new pharmaceutical products, especially biologics, that are complex molecular medicines derived from living organisms (eg, Humira for treating rheumatoid arthritis or Herceptin for treating cancer).

Biosimilars (‘biocomparables’ in Mexico) are functional equivalents to a reference innovative biologic product, and are analogous to the relationship between generics (chemically synthesised small molecules) and reference innovative medicines. However, while generics are therapeutically equivalent and molecularly identical to their reference, biosimilars are comparable but not identical to their reference biologics owing to their intrinsic complexity and the great sensitivity of the final product to changes in the manufacturing process (eg, in the case of Heparin).

Hence, regulatory data protection for biologics may also serve as a time to adequately implement pharmacovigilance over the commercialisation of an innovative biologic and correctly assess its effects without interference owing to the concurrent and even crossed administration of biosimilars to patients.

Nevertheless, to date, no specific law in Mexico has regulated protection against unfair commercial use of data submitted before the Federal Commission for Protection against Sanitary Risks (COFEPRIS) for the approval of the sale of drugs.

Before the USMCA, the legal framework for regulatory data protection was provided mainly by articles 82 and 86 bis of the Industrial Property Law (IPL), now abrogated, article 167 of the Health Supplies Regulations (HSR), as well as in paragraphs 5 to 7 of article 1711 of the also abrogated NAFTA and article 39.3 of the TRIPS Agreement. In addition, some ‘Guidelines for the protection of confidential information of medicines containing pharmochemicals as a new chemical entity’ were published in 2012 by COFEPRIS as an internal document.

According to article 39.3 of the TRIPS Agreement, Mexico as any other WTO member is required to give legal protection to test data directed to the marketing approval of a pharmaceutical product that utilises new chemical entities, provided that the test data is undisclosed and that its origination involved a considerable effort. The test data must be protected against unfair commercial use and disclosure, except where necessary to protect the public or unless steps are taken to ensure that the data are protected against unfair commercial use.

Paragraphs 5 to 7 of article 1711 of NAFTA included similar language protection to those in the TRIPS Agreement. Still, NAFTA was more evident when it required the parties to provide a ‘reasonable period’ of data exclusivity for pharmaceutical products that utilise new chemical entities. NAFTA was considered a more specific standard for protecting clinical data than TRIPS, as it provided a minimum standard of five years of protection from the date market authorisation was granted.

The USMCA is the result of the renegotiations of NAFTA between 2017 and 2018. In the treaty initially approved on 19 June 2019, the strengthening of regulatory data protection was contemplated with:

• at least three years of protection for new clinical information submitted in support of the marketing authorisation of a further indication, new formulation or new method of administration;
• at least five years of protection for new pharmaceutical products that contain a chemical entity that has not been previously authorised; and
• at least 10 years of protection for new pharmaceutical products containing a biological effect.

However, on 10 December 2019, in Mexico City, the Protocol of Amendment to the USMCA was signed, which includes modifications agreed by the three countries, including the issue of regulatory data protection. The Protocol completely removed the text related to the protection of clinical data of biologicals, new indications, new formulations or new administration methods, leaving only one provision (article 20.48) for the protection of at least five years for new pharmaceutical products.

In addition, article 163 of the FLPIP (previously article 82 of the IPL) states that submitting information before COFEPRIS is not considered a disclosure of that information. On the other hand, article 168 of the same law (before article 86 bis of the IPL) establishes that any information required for determining the safety and efficacy of pharmaceutical and agrochemical products using novel chemical compounds will be protected under the terms of the international treaties to which Mexico is party. This article expressly points out the obligation of the Mexican government to adhere to the provisions of international treaties regarding regulatory data protection.

Article 167 of the HSR in turn describes the requirement to submit safety and efficacy data derived from clinical trials for innovative medicines. It states that, in the case of generics, it is only necessary to provide bioequivalence tests without the need for full clinical trials. In this way, it is accepted that the marketing authorisation holder of the reference has already demonstrated the safety and efficacy of the generic.

Therefore, the Mexican government has the obligation to provide regulatory data protection and therefore not to grant marketing authorisations to generics or biosimilars within at least five years of the date of marketing approval of the innovative reference product in Mexico.

Based on the above rationale, even though there is no standard procedure, obtaining at least five years of regulatory data protection through judicial procedures in Mexico has been possible. For some biologics, even more than five years.

Nevertheless, no specific regulation in Mexico provides clinical data protection to balance the market conditions between innovators and generics. There remains an urgent need to create or modify the corresponding legal provisions to clarify and organise the terms, effects and purposes of the protection of clinical data in Mexico, especially for biologics and other types of pharmaceutical products (orphans, new formulations, new indications or use pediatric), promoting fair and loyal competition in the pharmaceutical market. This issue seemed to be going to be corrected with the USMCA, but as previously mentioned, it was left aside at the last moment.

Mexican linkage system

The linkage system was enacted more than 20 years ago by the Mexican government to improve the communication between COFEPRIS and IMPI to prevent the granting of health registration approvals for generic versions from pharmaceutical drugs covered by granted patents.

Under the linkage system, the IMPI issues the Gazette for Medicines (GM), which contains a list of granted patents organised by international non-proprietary name (INN) of active principle. The GM is published every six months (in February and August), and each gazette substitutes entirely the former. If required, IMPI can issue an extraordinary publication before the indicated period.

Notably, a patent not listed will be equally enforceable through a standard infringement procedure, but it could not be considered when assessing a marketing authorisation.

Patent listings are not related to a particular pharmaceutical product and are not owned by a specific company. Thus, more than one patent could be listed for the same active principle, and a patent could be listed more than once to the extent that it covers more than one active principle.

There are two known ways of listing a patent: a formal petition and a bona fide proceeding, which are not mutually exclusive. The formal petition requires submitting a written request containing some information about the patent before the IMPI, which could be filed at any time after granting a patent. On the other hand, the bona fide proceeding comprises submitting a request for inclusion through the National Chamber of Pharmaceutical Industry (CANIFARMA). The submissions are collected and reconciled by CANIFARMA, who integrates a complete list and submits it to IMPI. Recently, both proceedings can be made using IMPI’s digital platform.

If IMPI rejects a patent listing, it is possible to file an appeal before the Federal District Court (FDC). The FDC’s decision, in turn, can be appealed in a final stage before a Federal Circuit Court by the affected party. Several patents have been listed following this judicial procedure.

Regarding eligibility, process patents are expressly excluded by statute. Nevertheless, erroneously, IMPI only easily includes active principle and formulation patents. Several appeals have been successful for listing patents referring to products, and numerous second-use patents have been successfully listed by judicial order (around 25 use patents are currently listed). As to biopharmaceutical patents, these patents are eligible for publication in the GM, but it is preferred that the characterisation of the active molecule must be made clear to match the description of the INN. Various biotechnology drug patents have been listed in the GM (more than 100).

Until recently, the system was established by two statutory provisions, one in the Industrial Property Law Regulations (article 47 bis) and the other in the HSR (article 167 bis). The new FLPIP raised the linkage system to law level by including article 162. According to article 162, there could be room in the GM for any pharmaceutical patent, as this article refers to ‘a list of patents related to inventions that can be used in allopathic medicines’. It is expected that in the following months, the regulations of the new FLPIP will be issued, and hopefully, they will provide more clarity about the interpretation of article 162. However, the regulations of the former IPL will remain in force until new regulations are in place.

Since the enactment of the system, along with the dossier that is filed before COFEPRIS for obtaining a marketing authorisation, it has been mandatory to file a statement under oath that patents are not infringed by the product, either because the applicant is the assignee of record in Mexico or an authorised licensee of the relevant patents, or because the applicant is not aware of any patents covering the product. Any name change, license, or assignment must be recorded before IMPI to be able to file the statement.

The guidelines issued by the IMPI for the publication of patents in the GM include a process for consultation triggered by COFEPRIS upon the statement of a marketing authorisation applicant. If a relevant patent is detected through IMPI or the GM, COFEPRIS should not grant unauthorised third-party marketing authorisation. However, this burden of work has been an unexpected overload of analysis for examiners at IMPI.

From this regulatory perspective of the system, it is essential to mention that recently, as a follow-up to the implementation of the USMCA in Mexican practice, COFEPRIS attempted to comply with the USMCA notice obligation.

In this regard, article 20.50 of the USMCA establishes that if a party permits, as a condition of approving the marketing of a pharmaceutical product, persons other than the person initially submitting the safety and efficacy information to rely on evidence or information concerning the safety and efficacy of a product that was previously approved, such as evidence of prior marketing approval by the party or in another territory, that party must provide:

1. a system to provide notice to a patent holder (that may include the patent licensee or the authorised holder of marketing approval) or to allow for a patent holder to be notified before the marketing of such a pharmaceutical product that such other person is seeking to market that product during the term of an applicable patent claiming the approved product or its approved method of use;
2. adequate time and sufficient opportunity for such a patent holder to seek, before the marketing of an allegedly infringing product, available remedies in subparagraph (c); and
3. procedures, such as judicial or administrative proceedings, and expeditious remedies, such as preliminary injunctions or equivalent effective provisional measures, for the timely resolution of disputes concerning the validity or infringement of an applicable patent claiming an approved pharmaceutical product or its approved method of use.

Significantly, this provision of the USMCA refers to the ‘approved method of use’, further supporting the inclusion of second medical uses in the GM. Moreover, it obliges Mexico to establish a notice obligation to the patent holder as part of the linkage system.

Related to the above, COFEPRIS announced directly on its website (which is not the official mean) an opposition form, which must be filled out and submitted before COFEPRIS for any person (patent holder, patent licensee or patent sublicensee) that is affected by the granting of the marketing authorisation of a generic or biocomparable. The opposition form must be submitted directly at COFEPRIS facilities.

COFEPRIS will also publish a weekly updated list of generic and biocomparable marketing authorisation applications and will provide a time frame of only 10 working days from its publication to submit the opposition form against an application. The information provided in the form will be used for the intragovernmental consultation that COFEPRIS makes to IMPI as part of its process for the authorisation of marketing authorisation.

The opposition form implemented by COFEPRIS does not comply with the USMCA notice obligation at all, as it does not consist of a proper notification to the patent holder of a relevant patent before the marketing of such a pharmaceutical product, and it does not provide adequate time and sufficient opportunity for such a patent holder to seek available remedies. The opposition form puts all the burden on the patent holder, who must monitor the weekly updated lists and then notify COFEPRIS about a possible affectation. Moreover, the update lists do not provide enough information to properly assess if the pharmaceutical product could fall within the scope of a granted patent.

It is well known that policymakers promoting healthcare qualify linkage systems as undesirable and are condemned as contrary to the promotion of public health. However, it is not well understood that the role of linkage systems is not to enforce patents per se or to make the availability of generics harder since the effect of patents will not change if they are listed or not. The true aim of linkage systems is to provide information and certainty.

There is still significant uncertainty surrounding the interactions of pharmaceutical patents with health regulations in Mexico. For example, the linkage system is unavailable for medical devices or veterinary products. Regarding biologics, the role of process patents will increasingly have to be discussed, given the high impact of processes on the quality of the final product.

A well-implemented and fair linkage system will promote fair market competition and make it possible for sanitary and patent authorities to take all measures available to them to maximise the impact of healthcare innovation.

Conclusions

Strengthening and clarifying the rules regarding regulatory data exclusivity and the linkage system would cause significant gains for Mexico. Both regimes must evolve towards a scheme providing higher legal certainty to all interested parties, promoting fair market competition, and allowing the government to take measures to increase the positive impact of healthcare innovation for the benefit of society at large.

The Mexican legal framework must offer sufficient incentives to achieve the optimal balance between the short- and long-term interests of different sectors of society about health issues – that is, on the one hand, access to future innovations through investment in research and development in a safe way for the patient and, on the other hand, access to existing medicines at lower prices.

Nevertheless, the Mexican IP system provides tools for protecting pharmaceutical and biotechnological innovations and the interests of investors and companies in this industry. Still, careful and detailed assessment on a case-by-case basis must be performed to succeed and maximise the value of these technologies.