Cesare Galli October 17 2022 Patent linkage in Italy: a reform that changes nothing? IP Law Galli | Intellectual Property - Italy Cesare Galli Intellectual Property IntroductionPatent linkage mechanismPotential solutionsCommentIntroductionThe Italian lawmaker has once again intervened in the relationship between supplementary protection certificates (SPCs) and generic drugs. In particular, article 17(1) of Law No. 118 of 5 August 2022 repealed paragraph 1 bis of article 11 of Decree-Law No. 158 of 13 September 2012, as converted by Law No. 189 of 8 November 2012 (better known as the "Balduzzi decree" from the name of the minister of health at the time), which established that:medicines deemed equivalent under the law cannot be classified as medicines paid for by the National Health Service with effect prior to the date of expiry of the patent or supplementary protection certificate, published by the Ministry of Economic Development pursuant to the provisions of the law in force. However, at the same time, paragraph 3 of the same article 17 of Law No. 118/2022 introduced a new provision of almost identical content – namely:Bioequivalent medicines referred to in paragraph 2 may be reimbursed at the expense of the National Health Service as from the date of expiry of the patent or supplementary protection certificate on the active ingredient, published by the Ministry of Economic Development pursuant to the provisions of law in force. For these drugs, paragraph 2 of the same provision expressly provides that:Manufacturers of bioequivalent drugs pursuant to the provisions in force may submit to the Italian Medicines Agency (AIFA) an application for the issue of the marketing authorisation (AIC), as well as an application for the determination of the price and classification for the purposes of the reimbursability of the drug, prior to the expiry of the patent or supplementary protection certificate.However, such an application is unable to lead to the actual "reimbursability" of generic drugs prior to the expiry of the patent or SPC.Patent linkage mechanismDespite the criticism it has received, the so-called "patent linkage mechanism" (or rather, the "reimbursement patent linkage" mechanism) has been maintained. It is called as such due to the fact that the date from which it is possible for a generic medicine to be recognised as reimbursable by the National Health Service (SSN) is determined by linkage with respect to the date of expiry of the existing patent/SPC rights concerning the corresponding medicines produced and marketed by the originator.However, since its introduction, case law has considerably limited the scope of such linkage – in fact, both the Council of State and numerous regional administrative courts have ruled that article 11 of the Balduzzi decree should be applied only where the patent or complementary coverage relates to the active ingredient itself and not to the invention of method and invention of use.Beyond the debatable nature of these case law interventions, not only the strengths but also the weaknesses of this mechanism are evident. The case law itself reflects a substantial misunderstanding of the functioning of the patent system, which gives rise to exclusive rights being enforceable against the production and marketing of the bioequivalent medicine both in the case of a patent on the active ingredient and in the case of a method or use patent. It does not take into account the fact that, as is also codified in article 117 of the Italian Code of Industrial Property, "[r]egistration and patenting do not affect the exercise of actions regarding the validity and ownership of industrial property rights". Therefore, the mere fact that an active ingredient is covered by a patent granted or by the relevant SPC does not imply that the exclusivity is valid and indeed not even that the corresponding bioequivalent medicine falls within its scope of protection, since bioequivalence in itself is not synonymous with infringement.(1)Potential solutionsThe abolition as a whole of the reimbursement patent link – which was considered, at least in relation to the protection of the SPC – could amount to a breach by the Italian government of Italy's international obligations, and in any event of those provided for by EU law, to effectively protect IP rights. However, the maintenance of the rule (or, as happened, its replacement with another of substantially the same content, which there is no reason to interpret differently) is clearly not an acceptable solution either.It had been suggested that, before it becomes effective (in advance of the expiry of the relevant patent/SPC) for the equivalent medicine to become reimbursable and for the SSN to set the reimbursement price, alternatively:the generic pharmaceutical company shall provide the Italian Medicines Agency (AIFA) with proof that it has obtained from the competent judicial authority a ruling, including a preliminary ruling, of a negative finding of infringement, which has not been revoked prior to the measure of admission for reimbursement; orAIFA notifies the patent or SPC holder of the request for the marketing authorisation for the equivalent medicine, including the applicant's identification data, and orders the admission to the "reimbursability" of the equivalent medicine only if:notwithstanding such notification the proprietor of the patent or SPC has not brought an action before the competent judicial authority for a preliminary injunction against the infringement; orhaving done so, that action has been concluded, either at the first preliminary injunction stage or at the appeal preliminary injunction stage, with the rejection of the application for an injunction.In fact, this second solution was the subject of a project presented by the American Chamber of Commerce in Italy before the adoption of the Balduzzi decree, as it was considered appropriate to effectively balance the different interests at stake – namely, those of the patent/SPC holders, generic manufacturers and the SSN.CommentThis failure to amend the Italian legislation on this matter represents a lost opportunity to reconcile and coordinate the regulatory aspects in an appropriate and effective manner that is more respectful of the interests of all the subjects involved – namely, those of substantive law and those pertaining to the judicial protection of the relevant rights.For further information on this topic please contact Cesare Galli at IP Law Galli by telephone (+39 02 5412 3094) or email ([email protected]). The IP Law Galli website can be accessed at www.iplawgalli.it.Endnotes(1) On this subject see extensively Galli-Bogni, "L'ambito di protezione del brevetto", in Galli-Gambino, Codice commentato della proprietà industriale e intellettuale, Turin, 2011, at pages 650-652 and the Italian and EPO case law referred to therein.