Wednesday, 6 November 2013

Pharmacists and personalized medicines: the Italian Supreme Court on the 'galenical exception'

The Corte di Cassazione
© Agostino Scudieri
With a decision of 23 September 2013, the Italian Supreme Court (Corte di Cassazione) examined the 'galenical exception' (also known as 'galenical exemption'), which allows pharmacists to manufacture and sell medicines containing a patented active ingredient, if there is an individual medical need which is not met by the drug marketed by the patent owner. The court clarified that the medical prescription should indicate the specific modifications needed to cater to the specific needs of the patient, which constitute the necessary pre-requisite for the applicability of the exception. Further, the manufacture and sale of personalized drugs by pharmacists, under the 'galenical exception', must have the characteristics of an extemporary, quantitatively limited, artisanal activity.

The 'galenical exception' was introduced in Italy in 1979, to ensure that the patentability of pharmaceutical substances did not preclude the treatment of patients whose medical needs prevented the use of the drug sold by the patent owner. [As Darren Smyth pointed out in a comment to the original version of this post, a similar exception can be found in the patent laws of other countries, where it is more commonly known as 'pharmacy exception'  (e.g. Section 60(5) of the UK Patents Act, or Section 3.3(5) of the Swedish Patents Act). The Community Patent Convention contains the same exception in Article 31(c). Further, WIPO's Standing Committee on the Law of Patents recently invited member states to submit information on the implementation of the 'pharmacy exception' in their respective national laws. The survey highlighted that the exception is indeed widely diffused, although some countries noted that it is not in use, since preparation of medicines in pharmacies is no longer common.]

Let's take a brief look at the development of the legislation concerning the patentability of pharmaceutical substances and processes in Italy:
  • under the Kingdom of Piedmont-Sardinia, a law promulgated in 1859 excluded the patentability of any drug (art. 6.4 l. 3731/1859);
  • in light of the development of the chemical industry, a 1934 royal decree established that, while drugs remained non-patentable, the processes employed for their production were eligible for patent protection (art. 16 r.d. 1602/1934). The decree, however, did not entry into force;
  • five years later, a law delegated authority to the royal government to draft a new legislation on the protection of intellectual property rights (l. 311/1939). The law postponed the application of the 1934 royal decree (including the patentability of process claims for pharmaceutical substances) sine die;
  • the royal government enacted the delegated legislation, which clarified that medicines of any kind, including the processes employed for their production, could not be patented (art. 14 r.d. 1127/1939);
  • in 1978, with judgment n. 20/1978, the Constitutional Court declared the unconstitutionality of the provision excluding the patentability of pharmaceutical substances and related processes, ruling that it unreasonably discriminated between inventors and industries operating in different fields. The court found that art. 14 r.d. 1127/1939 unduly restricted the scientific research needed to promote the development of the pharmaceutical industry, adding that the experience of other countries showed that patentability had not led to an increase in drug prices, nor restricted their availability;
  • the following year, Italy modified its patent law, allowing product and process claims for pharmaceutical substances (d.p.r. 388/1979). The amended Article 1 of the patent law, however, introduced the so-called 'galenical exception', to allow pharmacists to produce and sell medicines tailored to the specific medical needs of a patient. The provision stated that the exclusive right conferred by a patent did not extend to 'the extemporary preparation, on an individual scale, of medicines in pharmacies, following a medical prescription, and to the medicines so produced';
  • in 2005, the legislator promulgated the Code of Industrial Property (d.lgs. 30/2005). Article 68 retained the 'galenical exception', but excluded its applicability when the medicines prepared by pharmacists use 'industrially-produced active ingredients'.
Claudius Galenus
Previous judgments of the Supreme Court (e.g. n. 2241/2008, and n. 5573/2012) clarified that the limitation of the statutory rights of patent owners, established by the 'galenical exception', is justified by the necessity of protecting the right to health. The exception is subject to four requisites: (i) the extemporary character, which means that the medicine should be prepared only when needed, (ii) the quantitative restriction, as the production should be carried out on an individual scale, (iii) the presence of a medical prescription catering to specific needs of the patient, and (iv) the use of active ingredients not produced on an industrial scale. The last requisite aims to strengthen the protection afforded by patent rights, preventing the unlawful production and trade of infringing drugs.

In the case examined by the Supreme Court in the decision of 23 September, a pharmacist had manufactured and sold a medicine containing the active ingredient Finasteride, a type II 5α-reductase inhibitor, patented by Merck & Co. and marketed for the treatment of male pattern baldness (Propecia) and benign prostatic hyperplasia (Proscar). The medicine contained the same dosage (1 mg) of Finasteride as Merck's Propecia, and was similarly targeted to the treatment of alopecia. The pharmacist was accused, inter alia, of infringing a patented invention through the production of the alternative medicine, under art. 88 of r.d. 1127/1939 (now reproduced, with modifications, in art. 127 d.lgs. 30/2005).

The court observed that the aim of the 'galenical exception' is to allow pharmacists to prepare and sell medicines which cater to specific medical needs that prevent the use of the drug sold by the patent owner. The exception allows the production of personalized medicines, for example, when it is necessary to provide a different dosage of the active ingredient, or the patient is allergic to an excipient used in the marketed drug. Its application should be subject to a restrictive, rigorous interpretation.

Assessing the facts of the case, the court found that the medical prescription required the active ingredient Finasteride 1 mg, while the accused pharmacist employed Finastid 5mg and Proscar 1 mg, and their related excipients, bought from a third party. Further, the prescription did not require any personalized dosage of the active ingredient in light of specific medical needs of the patient. A fundamental requisite of the 'galenical exception' was, therefore, missing.

Upholding the appealed decision, the Supreme Court also clarified that the prohibition of the use of industrially-produced active ingredients, introduced in 2005, highlighted the artisanal character of the 'galenical exception', which was already implicit in the previous legislation. The requisite is necessary to prevent the creation of an unlawful 'parallel market', where patented drugs are produced and sold as galenical preparations for purely economic reasons.


Darren Smyth said...

Stefano - there is a similar exception under UK law - an act does not infringe a patent if "it consists of the extemporaneous
preparation in a pharmacy of a medicine for an individual in accordance with a prescription given by a registered medical or dental practitioner or consists of dealing with a medicine so prepared"

There was something similar in the Community Patent Convention, so I always assumed that most European countries had such a provision. Never seen a case about it before, though, so was fascinated by this.

Stefano Barazza said...

Dear Darren, thanks for your comment. I was unaware of the existence of similar provisions in other countries, but you are absolutely right, Article 31(c) of the Community Patent Convention has a similar provision. Further, the exception is known even beyond the EU, according to a recent document drafted by the WIPO:

In Italy, we have a conspicuous case law on the exception, although I have yet to encounter a case in which a pharmacist won!

Anonymous said...

I wasn't aware of this exception either. And yet I've been sitting on it through all this time, 'the making up of individual medicines on prescription in pharmacies where no mass production is involved, and acts relating to the medicines thus made up'. Guess you never stop learning!
Greets from Turkey.

Anonymous said...

I have been waiting for recognition of this feature that is so gaining in importance with modern diagnostics and personalised medicine.

I am quite convinced that this is the next barrier to total patent monopoly in the pharma field that we shall see lobbying against. Everything else is now permitted, such as second medical use, extension certificates, prolongation of term if it works on children, etc. Is the overall cost to a society with a national health system really lower with private development of drugs rather than directly society-funded development in university environments?

It all began when the chemical industry realised that their originally lofty ideals about their contribution to science and the patentability of methods only could very advantageously be replaced by a product protection. Society at large does not understand what it permits -- it does not understand patent law.

Kind regards,

George Brock-Nannestad

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