Reforming proposals for the existing patent-approval linkage system

Abstract

In order to implement the Korea-US FTA, the drug approval-patent linking system was introduced in the Pharmaceutical Affairs Act on March 15, 2015. Five-years implementation experience has provoked discussion for reforming the linkage system, and the government-led discussion focuses on procedural reform and the problems revealed in the operation of the system. However, since it was revealed that the sales prohibition of generic medicines, which is a key element of the linkage system, is rarely used, failing to achieve its purposes and intention, more structural and fundamental reform should be sought if the possibility of the FTA violation can be avoided.

Two fundamental reform proposals are presented here. First, it is proposed to converts the existing automatic stay through administrative measures of KFDA to judicial procedures. When considering several facts that from the five-years of experience in implementing the linkage system, the generic sales prohibition has not worked as originally intended, we already have judicial mechanism for early resolution of patent disputes between the originators and generic producers, international treaties including the U.S. as a contracting party are evolving to allow more flexible ways in implementing the generic prohibition clause, as shown by the Australian way of implementing AUSFTA, there is no reason not to adopt the reform proposal which more closely aligns with the principle of separating the drug approval process from the patent issue as much as possible while avoiding treaty violations.

Second, granting a first generic exclusivity (more accurately, duopoly advantage) when the generic wins in patent challenge is defective both in theory and practice, giving unjustifiable and excessive reward to the generic. For institutional incentive to encourage patent challenges, it is preferred to provide incentive through drug pricing system or tax revenue which can consider the quantity and quality of cost and contribution of patent challenges case by case. Alternatively, the problems of weak patent may be addressed through an ad hoc public body having a statutory authority to examine the validity of registered patent and to initiate patent invalidation trials.

The article was published in Bubjo Vol. 69, No. 2 (March 2020) is downloadable (Full text is in Korean)