Evergreening is any of various legal, business, and technological strategies by which producers (often pharmaceutical companies) extend the lifetime of their patents that are about to expire in order to retain revenues from them. Often the practice includes taking out new patents (for example over associated delivery systems or new pharmaceutical mixtures), or by buying out or frustrating competitors, for longer periods of time than would normally be permissible under the law. Robin Feldman, a law professor at UC Law SF and a leading researcher in intellectual property and patents, defines evergreening as "artificially extending the life of a patent or other exclusivity by obtaining additional protections to extend the monopoly period."
Overview
In the pharmaceutical industry, evergreening may be used by manufacturers of a particular drug to restrict or prevent competition from manufacturers of generic equivalents to that drug. Robin Feldman has documented several types of patent tactics commonly used in the U.S. by pharmaceutical companies, including evergreening, pay-for-delay, gaming the citizen petition process, and the misuse of trade secrets, among others. In one study of the prescription drug market, Feldman found that 78% of new patents associated with prescription drugs were for existing drugs.
In 2002, the US Federal Trade Commission (FTC) found that generic drug manufacturers intending to manufacture new drugs were subjected to legal action by the owner of the original patent up to 75% of the time, resulting in increased drug costs.
Product hopping
Product hopping, or product switching, is an anti-competitive practice in which a patent is extended by patenting a minor variation on the original product. This can prevent competition and harm consumer welfare. Types of product hopping include changes to the form of the drug (capsule, tablet, etc), chemical changes such as adjusting chemical groups (a me-too drug) or a different enantiomeric mixture (a chiral switch), and combinations of drugs that were previously sold separately.
Product hops are distinguished from genuine improvements, such as a new version of a drug with an easier route of administration that leads to meaningful benefits for patients. However, a meaningful improvement may still be considered a product hop if it was introduced as part of an anticompetitive strategy.
The analysis of product hopping under antitrust laws is complex, in part due to the complexity and unique nature of healthcare markets. , the distinction between encouraging innovation and preventing monopolization is unclear. One proposal is to define product hops as 1) modifying the product to prevent substitution by a generic drug and 2) encouraging prescriptions of the new version instead of the original. The switch to the new version can be encouraged by a marketing strategy or forced by discontinuing the original. Another possible factor is whether the switch would have been an economically sound decision for the company if it did not reduce competition by generics.
In one case, product hopping of the multiple sclerosis drug glatiramer acetate (Copaxone) led to a cost to consumers of $4.3 to 6.5 billion dollars over two and a half years, before the new patent was invalidated by the courts. Another example was the Alzheimer's drug memantine (Namenda). The impact of product hops can be less visible to the public than the cost of new drugs, because of a lack of awareness that the prices would have decreased due to generic competition.
Linkage evergreening and international trade law
The process of evergreening may involve specific aspects of patent law and international trade law. Linkage evergreening is the process whereby pharmaceutical safety, quality and efficacy regulators are required to 'link' their normal evaluation with an assessment of whether an impending generic product may infringe an existing patent.
By country
Australia
A requirement for the AUSFTA to come into force was fulfilment of the article 17.10.4 linkage obligation; done by amendments to the Therapeutic Goods Act 1989 (Cth). The amendments inserted a new section 26B which required applicants for marketing approval to certify their product would not infringe a valid patent claim, or that the patent holder had been notified of the application.