The pharmaceutical patent linkage system established by the Ministry of Health and Welfare (hereinafter referred to as the MOHW) provides a connection between the marketing of “new drugs” and the disclosure of patent information. Specifically, brand pharmaceutical companies can proactively disclose patent information related to new drugs in the system after obtaining a certificate of marketing approval. The system facilitates the linkage between the market approval process for generic drugs and the status of any patent infringement of new drugs, providing pharmaceutical companies with a certain period to clarify patent disputes. Consequently, the MOHW can use the information obtained from the system as a basis for approving or rejecting the market entry of generic drugs, and to, in turn, resolve patent infringement disputes before the launch of generic drugs, thereby avoiding impacts on drug usage and public health.
As our firm reported in April 2023, the court judges have held divided viewpoints on two significant issues existing in the pharmaceutical patent linkage system: (1) What constitutes the applicable scope of “new drugs”? and (2) Regarding the action of the certificate holder of a new drug proactively disclosing patent information in the patent linkage system, should this be characterized as an “expression of intent under the administrative law” or as an “administrative decision” taken by the MOHW?
In essence, the Taipei High Administrative Court, in its two Judgments rendered in mid-2023, adopted a viewpoint unfavorable to brand pharmaceutical companies. It determined that new drugs eligible for patent information submission are limited to those defined under Article 7 of the Pharmaceutical Affairs Law, namely, preparations with “new chemical entities, new indication/combination, or new routes of administration,” and should not expand to preparations with “new dosage forms, new administration dose, or new unit strength” not covered by the provision. Furthermore, the court characterized the administrative act of the MOHW in registering and disclosing patent information submitted by the certificate holders of new drugs as an “administrative decision,” thereby ruling that the MOHW has the authority to revoke a former administrative decision that registered and disclosed patent information of drugs that were ineligible for publication.
Conversely, the same court, in its another two Judgments rendered in end-2022, put forward a viewpoint favorable to brand pharmaceutical companies. It acknowledged that the scope of “new drugs” eligible for patent information submission also includes preparations with “new dosage forms, new administration dose, or new unit strength.” Additionally, it ruled that the act of registering drug patent information in the patent linkage system should be characterized as “the certificate holder’s own action”, rather than an “administrative decision” by the MOHW. Hence, the MOHW does not have the authority to delete any patent information already registered in the patent linkage system.
Regarding the aforementioned four Judgments, the losing party in each case appealed to the Supreme Administrative Court. In November and December of 2023, the Supreme Administrative Court rendered its respective Judgments. For the two issues discussed above, the Court adopted one and the same stance unfavorable to brand pharmaceutical companies.
Regarding the 1st issue, the Supreme Administrative Court noted that when the Pharmaceutical Affairs Law added Chapter 4-1, Articles 48-3 to 48-22 concerning the patent linkage system for pharmaceuticals, there were not set out any special provisions defining “new drugs.” Therefore, “new drugs” applicable under the patent linkage system for pharmaceuticals should conform to the definition provided in Chapter 1, General Provisions, Article 7 of the Pharmaceutical Affairs Law. This definition includes preparations that are recognized by the MOHW as having new chemical entities, new indication/combination, or new routes of administration but not new dosage forms, new administration dose, or new unit strength. The Supreme Administrative Court further elaborated that the Pharmaceutical Affairs Law and the implementing regulations for the patent linkage system for pharmaceuticals have explicitly specified who and which are applicable under the patent linkage system, i.e., only the certificate holders of new drugs can submit patent information, and the submitted drugs must meet the “new drug” criteria defined in Article 7 of the Pharmaceutical Affairs Law. This actually constitutes a legislative choice, not a legal loophole. Whether to amend and expand the definition of new drugs or change the scope of subject matters applicable under the patent linkage system for pharmaceuticals involves the principle of legal reservation under the constitution and should be decided by the legislature only.
Regarding the 2nd issue, the Supreme Administrative Court believed that the MOHW has the obligation and authority to establish the patent linkage system for pharmaceuticals. Furthermore, the administrative act of the MOHW in registering and disclosing patent information submitted by the certificate holders of new drugs constitutes a unilateral administrative action by the MOHW. This action is a decision made by the MOHW on a specific public law matter that directly produces legal effects under the provisions of Chapter 4-1 of the Pharmaceutical Affairs Law and therefore should be regarded as an administrative decision. Consequently, the MOHW has the authority to review and confirm whether the patent information on new drugs registered in the system complies with the provisions in Pharmaceutical Affairs Law. It also has the authority to delete any patent information that does not meet the regulations, thereby maintaining the legality and accuracy of the information in the system from time to time. This authority is unaffected by the mechanism for public inspection set forth in Article 48-7 of the Pharmaceutical Affairs Law.
The Supreme Administrative Court further pointed out that, in accordance with Articles 117 and Article 119.2 of the Administrative Procedure Act, if a beneficiary of an administrative decision provides incorrect information or incomplete statements on a significant matter, so that the administrative authority makes an unlawful administrative decision, such reliance is not worthy of protection. For the purpose of preserving the public interest, the original disposition authority or its superior authority may, even after the statutory period for relief has lapsed, revoke all or part of the unlawful administrative decision ex officio. Therefore, when the MOHW discovers that a certificate of new drug held by the brand drug manufacturer does not actually meet the definition of a “new drug” set out in Article 7 of the Pharmaceutical Affairs Law, and thus the information should not have been registered in the patent linkage system for pharmaceuticals in the first place, it is not unjustified for the MOHW to delete the unlawfully submitted information. This action restores the legal order to its proper state, prevents subsequent unlawful outcomes, and embodies the legislative intent of the Pharmaceutical Affairs Law concerning the patent linkage system for pharmaceuticals. Such approach by the MOHW is not inconsistent with the law.
From the aforementioned judgments, it is evident that under the current regulations of the patent linkage system for pharmaceuticals, only preparations with “new chemical entities, new indication/combination, or new routes of administration" are eligible for submission. In the case of an expansion of the scope of “new drugs” in the future, legislative amendments may be required. Our firm will continue to monitor this issue and report updates in a timely manner.