CHUN-YU LIN*

Background

The patent linkage system was implemented in Taiwan on August 20, 2019 for the holders of new drug permits to submit relevant patent information within 45 days from the day next to the receipt of the permits or within 45 days from the day next to the publication of relevant granted patents. However, these 45-day restrictions on submission did not apply during the three-month transitional phase after the implementation of patent linkage (that is, from August 20 to November 20, 2019) as long as the relevant patents were still in force. During the transitional phase, patent information was listed for more than 500 drug permits. However, after thoroughly checking the permits, the Ministry of Health and Welfare (MHW) deemed that among the permits for which patent information was submitted, 87 permits did not meet the requirements. After inviting the permit holders to file arguments, the MHW removed the patent information listed for the permits of drugs which were not drugs having a new chemical entity, a new indication or combination or a new administration and thus were not deemed eligible “new drugs.” Several pharmaceutical companies challenged the MHW’s opinions about the definition of “new drugs” and filed petitions with the Executive Yuan against the MHW’s removal of their patent information. After all the petitions were rejected by the Executive Yuan, five of the petitioners were not satisfied with the rejection decisions rendered by the Executive Yuan and filed administrative litigations. Judgments for the litigations filed by two of the five pharmaceutical companies were rendered by the Taipei High Administrative Court in May 2022¹.

The main issues

The two main issues of the litigations were:

I. whether the new drugs for patent linkage are limited to drugs having a new chemical entity, a new indication or combination or a new administration; or drugs having a new dosage form, a new dosage or a new strength should also be eligible new drugs for patent linkage, and

II. whether the MHW has the authority to remove listed information from the patent linkage system.

Issue I. Eligible types of new drugs

The plaintiffs pleaded for the eligibility of drugs having a new dosage form, a new dosage or a new strength as new drugs for patent linkage. The main points raised by the plaintiffs include:

a. Local practices commonly refer to drugs having a new dosage form, a new dosage or a new strength as new drugs.

Particularly, according to the introduction to the registration of new drugs by the Center for Drug Evaluation², the types of new drugs for registration include “new drugs stipulated in Article 7 of the Pharmaceutical Affairs Act (PAA)³: new chemical entities, new administrations, new combinations or new indications” and “other new drugs: new dosage forms, new dosages and new strengths.” Besides, in accordance with Article 39, Paragraphs 1 and 2 of the Regulations for Registration of Medicinal Products (RRMP)^4,5, drugs with a new dosage form, a new dosage or a new strength should be deemed new drugs. Furthermore, in the application form for registration from the website of the MHW, new dosage forms, new dosages and new strengths are categorized as new drugs. Such classification can also be found in statistics published by the MHW.

b.The MHW previously proposed an amendment to the PAA to specify drugs having a dosage form, strength or dosage different from that of approved drugs as new drugs.

In response to the plaintiffs’ arguments, the MHW referred to Article 7 of the PAA³, Article 16, Paragraph 1 of the Regulations for the Patent Linkage of Drugs (RPLD)⁶ and Article 4, Subparagraph 1 of the RRMP⁷ with respect to the definition of new drugs. The MHW also referred to the legislative grounds for the provisions of the patent linkage system:

“For the drugs referred to as new drugs in the PAA, patent information should be submitted within the stipulated periods …”; and

“New drugs are as defined in Article 7 of the PAA and refer to new drug having a new chemical entity, a new indication or combination or a new administration. Therefore, the new drug not having a new chemical entity here refers to new drugs having a new indication or combination or a new administration.”

The court ruled for the agency and determined that since patent linkage connects the registration of new drugs with the disclosure of patent information and the registration of generics with possible infringement of patent rights, the definition of new drugs is extremely important. Particularly, the patent linkage system involves submission of patent information for new drugs, but the definition of new drugs in Article 7 of the PAA³ was not amended when the PAA was amended to introduce the patent linkage system. Moreover, the proposed amendment to the definition of new drugs in Article 7 of the PAA³ has not been passed by the Legislative Yuan and thus has not become effective. Therefore, the definition of new drugs should be based on the provision currently in force, and Article 7 of the PAA currently in force³ authorizes the agency to examine and determine whether a drug meets the definition of new drugs including drugs having a new chemical entity, a new indication or combination or a new administration. This provision has not been changed since the amendments to the PAA to introduce the patent linkage system. Contrary to the plaintiffs’ opinions, the proposed amendment to the definition of new drugs actually proves that drugs with a new dosage or a new strength do not belong to new drugs designated under Article 7 of the PAA currently in force³.

Besides, the RRMP were established based on the authorization of the PAA and thus should not go beyond the power conferred by the PAA. In fact, the definition of new drugs in the RRMP (especially Article 4, Subparagraph 1 of the RRMP⁷) is consistent with that in the PAA. Moreover, Article 39, Paragraph 2 of the RRMP⁵ stipulates that regulations for new drugs are applicable mutatis mutandis, rather than directly, to preparations with a new dosage form, a new dosage or a new strength. In the provisions, preparations with a new dosage form, a new dosage or a new strength are listed separately from new drugs. It can thus be seen that the RRMP do not go beyond the power conferred by the PAA and do not define new drugs in a different manner.

Issue II. Role of the MHW in the Patent Linkage System

The plaintiffs argued that it should be within the permit holders’ discretion to submit patent information. The MHW should only establish a system to list and publish the patent information submitted, amended or deleted by the permit holders, which shall not include “examination of the patent information submitted by the holders of new drug permits.” In other words, the MHW is not authorized to remove listed patent information and thus the removal does not comply with the principle of legal reservation and legitimate expectation.

In response, the MHW pleaded for its authority to remove patent information listed for ineligible drugs mainly on the following grounds.

a.The provisions in Article 7 of the PAA³, Article 16, Paragraph 1 of the RPLD⁶ and Article 4, Subparagraph 1 of the RRMP⁷ all define new drugs as drugs having a new chemical entity, a new indication or combination or a new administration but not drugs having a new dosage form, a new dosage or a new strength.

b. Article 48-8, Paragraph 1 of the PAA⁸ not only authorizes the MHW to establish a system for patent linkage, but also authorizes the MHW to list and publish patent information. It is the duty of the MHW to establish a patent linkage system, and the MHW has the power to maintain the system. Besides, only patent information submitted by eligible new drug permit holders can be listed.

c. Accordingly, the MHW has the authority to examine whether a drug is a new drug designated under the PAA (Article 7 of the PAA³) and shall only allow holders of new drug permits to submit patent information (Article 48-8, Paragraph 1 of the PAA⁸). The MHW indeed has the power to examine whether permit holders are qualified to submit patent information to the patent linkage system. If a drug is not a new drug designated under the relevant provisions, the act of submitting patent information for such drug permit in the patent linkage system does not comply with the PAA, and the MHW should reject the patent information. Even if patent information has been listed for an ineligible drug permit, the MHW still has the authority to remove illegally listed patent information.

The court deferred to the MHW’s view that the agency has the authority to examine whether a drug is a new drug designated under the PAA and further determined that the agency has the obligation and authority to list and publish patent information submitted by the holders of new drug permits and any amendments and deletion of the information. Holders of new drug permits may voluntarily submit patent information in accordance with the format requirements set by the agency. The patent linkage system regularly lists and publishes submitted patent information. Accordingly, the agency has the authority to control and manage the patent linkage system. In the cases in question, the plaintiffs submitted incorrect information, which led to the agency’s illegal administrative act of listing and publishing such information. It would therefore be lawful for the agency to revoke the previous illegal administrative act.

Furthermore, the legislative grounds for the patent linkage system describe that holders of new drug permits should submit information of patents relevant to the drugs within the statutory period as promulgated by the agency and the agency is authorized to establish relevant regulations. Based on the legislative grounds and Article 48-8, Paragraph 1 and Article 48-22 of the PAA^8,9, the PAA indeed authorizes the agency to establish the patent linkage system and to list and publish patent information submitted by holders of new drug permits. Since the listing and publication of incorrect patent information is an illegal administrative act in the first place, the agency certainly can remove illegally listed patent information ex officio.

Conclusion

The court ruled that the eligible types of new drugs for the patent linkage system are limited to drugs having a new chemical entity, a new indication or combination or a new administration and do not include drugs having a new dosage form, a new dosage or a new strength. Besides, the MHW has the authority to remove patent information listed for ineligible drugs in the patent linkage system. In fact, under current practices, the MHW grants access to the patent linkage system for “new drugs” when pharmaceutical companies receive permits of drugs having a new chemical entity, a new indication or combination or a new administration, while access to the patent linkage system is not available for drugs having a new dosage form, a new dosage or a new strength. Therefore, patent information listed for ineligible drugs should not be found in the patent linkage system in the future.

*Section Chief of International Patent Division at Tai E International Patent & Law Office

⁹ Article 48-22 of the PAA: The details of the following should be promulgated by the MHW: the method and content of submission of the patent information, the amendment and deletion thereof, the listing and publication of the patent information …; and other matters that shall be abided by.