The devil’s in the detail

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Commercial success of pharmaceutical products is subject to several risks, like reliance on third parties, regulatory compliance, failure to gain market and patient acceptance, ability to provide adequate supply, competitive challenges, legal and regulatory requirements, and intellectual property and regulatory challenges.

The commercial success depends, in part, on company’s ability to obtain patents and/or maintain adequate protection for its technologies and products in the countries of interest. Company would be able to protect its proprietary rights from unauthorized use by third parties only to the extent that its proprietary technologies and products are covered by valid and enforceable patents or are effectively maintained as trade secrets.

However, the degree of patent protection afforded to its products and processes in the key markets remains uncertain and depends, in part, upon decisions of the patent offices, courts, administrative bodies and lawmakers in these countries. One may fail to successfully obtain or preserve patent protection for the technologies incorporated into its products and processes, or the protection obtained may not be sufficient to protect the commercial interests in all countries where company conduct business.

Companies also rely on regulatory exclusivity for protection of its products. Implementation and enforcement of regulatory exclusivity varies widely from country to country. Failure to qualify for regulatory exclusivity, or failure to obtain or maintain the extent or duration of such protections due to challenges, changes, or interpretations in the law or otherwise, could affect revenues for the products.

Company may also face challenges to its patent and regulatory protections covering its products by third parties, including manufacturers of generics and biosimilars that may choose to launch or attempt to launch their products before the expiration of patent or regulatory exclusivity. Litigation, interference, oppositions, inter partes reviews, administrative challenges or other similar types of proceedings are unpredictable and are often lengthy and expensive. Negative outcomes of such proceedings may adversely affect the validity and scope of the patent or other proprietary rights.

Settlements of such litigations may result in reducing the period of patent protection, accelerating reduction in revenue from affected products.

Furthermore, company’s products may be determined to infringe patents or other intellectual property rights held by third parties. Adverse outcomes in these litigations could hinder company’s ability to manufacture and market its products and may require it to seek a license for the infringed product/technology.

The actual protection afforded by a patent varies on a product-by-product basis, from country to country and depends on many factors, including the type of patent, the scope of its coverage, the availability of regulatory related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patents. A clear Intellectual property strategy & proper due diligence can help to ward off financial, business, or reputational risks.

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