Generic versus branded: court rules on drug substitution legislation

A recent Maritime and Commercial High Court decision has exposed a potential incompatibility between Danish patent legislation and a medicinal substitution act which was implemented to minimise the costs of medicine for consumers and the government.

The medicinal substitution act, which is administered by pharmacies in Denmark, states that if a doctor prescribes a certain medicine with an active substance the pharmacy is legally bound to offer the consumer the most inexpensive comparable medicine with the same active substance. This means that if there are generic drugs on the market with the equivalent active substance, the pharmacist must offer the consumer the cheapest one.

However, a recent case brought by a branded drug manufacturer has highlighted an apparent flaw in the legislation, resulting in pharmacists being forced by law to infringe valid Danish patent protection.

Facts
The branded drug manufacturer had patented an active substance used to treat specific conditions, but the patent protection for that active substance had lapsed. As a result, a generic drug manufacturer began to produce a generic drug with the same active substance and received a marketing authorisation for the generic drug used to treat the specific condition.

In the meantime, the branded drug manufacturer had obtained valid patent protection in Europe and Denmark for a second medical use for the active substance to treat a further condition, where the patent defined the protection using a 'Swiss-type' claim and the patent rights thus extended beyond the lifetime of the original patent. Such protection is both valid and allowable in Denmark, and therefore the patent's validity has not been challenged before the Danish courts.

The Danish drug substitution legislation states that the substitution principle is based on the active ingredient of the generic drug, thus forcing Danish pharmacists to offer the consumer the generic drug if a doctor has prescribed the original drug for the treatment of the additional condition.

Both the generic drug manufacturer and the branded drug manufacturer were aware of this flaw in the legislation, and notified the Danish Health and Medicines Authority and the pharmacists that substitution of the original drug with the generic drug for the additional condition would infringe the second medical use patent.

However, the Danish Health and Medicines Authority could not suspend the application of the act. This meant that even if all of the parties were aware of possible patent infringement, there was no way to prevent the substitution of the branded drug with the generic drug.

Therefore, the branded drug manufacturer was forced to file a petition for preliminary injunction against all Danish pharmacies in order to try to prevent the generic drug being used as a substitute when a doctor prescribed the branded drug for the treatment of the additional condition.

Decision
The Maritime and Commercial High Court awarded the branded company a preliminary injunction against Danish pharmacies as it was clear that the substitution of the branded drug with the generic drug for the additional treatment infringed a valid patent.

However, the court cleared the generic drug manufacturer of any wrongdoing as it had undertaken all actions possible to try to prevent substitution of the branded drug for the additional condition. Further, Danish legislation provides that a government agency cannot be liable for patent infringement, and therefore the Danish Health and Medicines Authority could not be party in the proceedings. However, as the pharmacists were forced by law to substitute the branded drug with a generic drug, they were the only parties in the chain that could prevent infringement from taking place.

As an aside, the court commented on the incompatibility of the medical substitution legislation and the patent legislation, but stated that it was not competent to comment on whether the medicine substitution legislation was contrary to the Danish Patent Act. The court opined that this question had to be answered in separate proceedings raised by the branded drug manufacturer against the Danish government.