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Energy Boardroom

A legal perspective on the Mexican pharma market

11.02.2014 / Alejandro Luna Fandiño, Partner, Olivares & Cia, for PharmaBoardroom.com

alejandro-luna-fandi-o.pngPartner of leading Mexican law firm Alejandro Luna offers his legal perspectives on the current market situation for pharmaceutical companies in Mexico, covering topics from pricing and reimbursement to intellectual property and patent law.

 

I.               Pricing & Reimbursement.

Price control in the private sector is based on a scheme of self-regulated maximum retail price (MRP) covering patented products, as overseen by the Ministry of Economy. Pharmaceutical companies’ participation is voluntary. Under the price control each product’s MRP must not exceed an international reference price, estimated as the average price in six major markets, plus a market factor. There are no established sanctions for violations of the MRP.

In 2008, the government created the Committee for the Negotiation of Drug Prices (CNDP) to:

– Support public acquisitions through a process of negotiation transparency between public insurers and pharmaceutical companies.

– Determine the cost-benefits ratio of new medicines and therapies in relation to their prices and those of other products in the market

Public sector purchases are made through public tender processes. The CNDP analyzes the effectiveness of drugs and relevant therapeutic alternatives, and the feasibility and implications of an eventual substitution with equivalent medicines.

In the private sector, the majority of payments are made on an out-of-pocket basis.

The CNDP also conducts an economic evaluation of the cost-effectiveness of patented medicines compared with potential substitutes. Drug payments by the government (mainly in the IMSS) derive from the obligatory fees paid by both employees and employers. However, federal government subsidies are necessary in all segments of the public health system at the federal and state levels.

In the private sector, the majority of payments are made on an out-of-pocket basis. Private insurers are currently improving the level of pharmaceutical coverage as the private market in medi¬cines has grown considerably in the last six years.

II.             Patents

Conditions and legislation

Patent applications are regulated by the Intellectual Property Law (IPL) and its regulations. Patentable inventions must (Article 16, IPL):

– Be novel.

– Result from an inventive step.

– Be industrially applicable.

The Mexican Institute of Industrial Property (IMPI) now grants patents protecting the compounds, formulations, uses and manufacturing processes of medicines. Article 19 of the IPL excludes medical procedures from being the subject matter of an invention. However, a patent can be obtained for a therapeutic method by drafting the claims in the Swiss-style format, that is, claiming the medical use of the compound for the treatment of a specified illness.

Process and timing

The average time for obtaining a Mexican patent varies depending on the field of technology. Generally, it takes from four to six years to obtain a patent. A patent is obtained by filing a patent application with the IMPI.

Duration and renewal

The term of a Mexican patent is 20 years from the effective filing date of the patent application. For Paris Convention and non-Paris Convention applications, the effective filing date is the filing date in Mexico. For Patent Cooperation Treaty 1970 applications, the effective filing date is the date of filing of the international patent application. The patent cannot be renewed.

Data Package Exclusivity 

Arguably in conflict with international law (which contains provisions concerning industrial secrets and the protection of data package exclusivity rights (DPE)), Mexico does not have any domestic legislation which expressly establishes and protects DPE.

Extending protection

There are no provisions for exclusivity term extensions or supplementary protection certificates in domestic law.

In theory, the life term of a patent could be extended under certain international treaties (for example, NAFTA) where the Health Authority has delayed the process to obtain a marketing authorization for a patented product. However, in practice no one has yet attempted to do this.

There are no provisions for exclusivity term extensions or supplementary protection certificates in domestic law.

Patent infringement

The IPL grants patentees the right to the exclusive exploitation of the patented invention. Therefore, a patent grants the right to exclude others from making, using, offering for sale or importing the patented invention. In a patent infringement action, the claimant must prove the following:

Ownership or recorded license over a granted, valid and fully in force patent. Generally, a certified copy of the “file wrapper” of the patent prosecution is enough to prove these requirements. Validity of the patent can be challenged by the defendant.

That someone is using, making, offering to sell or importing the patented invention. The IPL establishes direct infringement over the manufacturer. Infringement against sellers requires evidence of prior notice of the alleged infringement. When a claimant claims infringement of a patented process, the defendant has the burden of proving the use of a different process other than the patented process. There are no grounds in the IPL to apply the contributory infringement doctrine.

Use of the patented invention. Under the IPL, only literal infringement is recognized. No doctrine of equivalence applies.

The burden of proving authorization is on the defendant. The doctrine of implied license has never been tested before the Mexican courts.

Proving patent infringement in Mexico is a difficult task, since the jurisdiction follows a strict civil law system which has formalistic rules for both evidence and proceedings.

The patent infringement claim must be submitted before the IMPI. The claim is served on the alleged infringer, who then

has ten working days to respond and, if applicable, bring a counterclaim. That response is then served on the claimant for the claimant to refute it. All the evidence is analyzed, and finally a decision is issued. That decision can be challenged before the Federal Courts.

The IMPI is an administrative authority. There is no judge or jury participation in patent infringement actions.

To read more articles and interviews from Mexico, and to download PharmaBoardroom’s latest free report on the country, click here.

 


olivares-logo.pngOlivares & Cia

Pedro Luis Ogazon 17,
Col. San Angel,
01000,
Mexico, D.F
T: (5255) 53 22 30 00
F: (5255) 53 22 30 01
http://www.olivares.com.mx

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