Government boosts generic drug makers

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Government boosts generic drug makers

A generic drug is a drug in which the patent term relating to the active ingredient has expired. Under the Pharmaceutical Affairs Act, the approval of the Ministry of Health, Labour and Welfare (the MHLW) is required for any manufacture and marketing of drugs, and as a matter of course, the same rule would be applicable to generic drugs. Although the application procedure for the approval of generic drugs is easier than that for the approval of new drugs, generic drugs are subject to certain restrictions.

One special restriction is the rule requiring the indications of generic drugs to be identical to those of the original drugs. Under this rule, when the indications of the original drug are more than one (for instance, indication A and B), the approval of the corresponding generic drug must be applied for in respect of the same indications (indication A and B), and deleting some indications of the original drugs in the application for generic drugs (a carve-out application) is not allowed.

However, when any new indication (indication B) is added to the approved original drug (the indication of which, for instance, is indication A only) and only such new indication is protected by data exclusivity and/or patent, the carve-out application would be necessary on the part of generic drug companies. According to the practice of the MHLW, a carve-out application is allowed only when the new indication is protected by data exclusivity. Accordingly, if the new indication is protected by a patent and not by data exclusivity, then generic drug companies would be unable to apply for the generic drug due to the prohibition against carve-out applications. As a result, it has been said that, if original drug companies purposely add any new but minor indications, thereby extending the patent term regarding such minor indications under the Patent Act, then it follows that the new indication would be protected only by patent, and the original drug company would be entitled to prevent the entire application for the generic drug, despite the extended patent effects solely on the new indication under the Patent Act (data exclusivity is not granted when the added indication is minor.). However, this practice has been criticised since the period of market dominance of the original drug could be unfairly extended.

In response to such criticism, on June 5, 2009, the MHLW issued notices that carve-out applications should also be allowed when an indication is protected by a patent.

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