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Patent boundary blurred

Rules governing the way pharma companies discover and develop new medicines could be fundamentally changed this week.

Rules governing the way pharma companies discover and develop new medicines could be fundamentally changed this week in a landmark case at the US Supreme Court.

In the lawsuit, German firm Merck KGaA is accused of infringing a small set of patents covering chemical compounds and ways of using them to manipulate cell growth owned by small medical technology company Integra Life Sciences.

In its defence, Merck claims it is protected by a well-established Food and Drug Administration (FDA) exemption which allows companies to circumvent patents if their experiments are aimed at getting the US regulator's approval for new drugs.

The clause, written into the Hatch-Waxman Act of 1984 originally allowed a generic company to manufacture and test a drug while the patent on the original was still valid, in preparation for market entry. However, previous court decisions have established that the exemption does not specifically apply to generic drugs.

ìIn my opinion, this is one of the most financially important cases the court hears, at least this term, if not for several terms,î said lawyer Jeffrey Lewis at Patterson Bellknap Webb and Tyler.

The case has struck a raw nerve in the pharmaceutical sector, with drug companies on one side and makers of so-called ìresearch toolsî on the other both warning of negative consequences if they lose.

Pharma heavyweights such as Eli Lilly, Wyeth and Pfizer have sent ìfriendlyî briefs to the court, urging it to side with Merck and give early-stage researchers enough leeway to conduct experiments. Otherwise R&D will become overburdened with extra costs and development time, which could result in companies having to move their operations abroad, they said.

ìWe became alarmed by some of these drug company briefs,î said Michael Duff, president of the Analytical and Life Sciences Systems Association (ALSSA), representing producers of equipment and processes aiding drug discovery. He added that the FDA exemption should not apply to their products and that the pharma industry was attempting to over-run valid patent statutes.

A US District Court jury awarded Integra $15m in damages in 2000, which was later reduced to $6.4m. In June 2003, an appeals court upheld that decision, declaring that Merck was using the exemption to search more broadly for drugs.

30th September 2008

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