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Israel: A Loophole to Enhance Generics’ Ability to Launch At Risk During Patent Term Extension Protection Period

Publications / Oct 05, 2021

Article written by Ephraim Heiliczer and Zeev Pearl

The Israeli Ministry of Justice has proposed changes to Israel’s Patent Term Extension (PTE) laws that significantly enhance Generics ability to launch at risk. Although the proposal ostensibly offers Israeli Generics the same benefits afforded to European Generics, the proposal does not include the safeguards found in the European regulations.

The Israeli proposal offers Generics the advantages of the May 2019 EU amendments to Supplementary Protection Certificate Regulations without the safeguards to prevent misuse. Specifically, the amendment will allow Generics to produce generic drugs for export during the PTE period, and to produce and store generic drugs during the last six months of the protection period for sale after the PTE’s expiration. Nevertheless, the Israeli proposal does not include any of the EU safeguards intended to prevent generic products from entering the Israeli market prior to the expiration of the PTE.

Unlike the EU Regulations, the Israeli proposal does not require Generics to notify Israeli authorities or the innovator company of generic manufacture of a PTE protected drug. EU notification requirements obligate Generics to provide at least three months advance notice prior to any generic manufacturing, to specify whether the generic drug is being produced for storage or export, and to provide information on generic drug marketing authorization in the export country. The Israeli proposal also does not require Generics to label exported generic drugs produced with export only marking.

This will lead to a situation in which Generics can produce PTE protected drugs almost at will, with little, if any, oversight. Generics can easily misuse the protection exemptions to surprise Innovators with a local at-risk launch that floods the Israeli market with large quantities of a generic drug, at a moment’s notice.

The proposal’s weakening of PTE rights advances Israel’s pro-generic policies. In this regard, Israel already limits PTE periods to the shortest protection period granted in the US, UK, France, Germany, Spain, or Italy. Israel’s PTE law contains significant procedural obstacles that ensure the PTE process is challenging for Innovators (e.g., limited time extensions, time-sensitive requirements to submit foreign PTE/SPC certificates). Further, in contrast with the EU and US, drug market exclusivity is restricted to new chemical entities (e.g. small molecules) and limited to a maximum of 6.5 years from the drug’s first foreign marketing authorization. Biologics are not granted any market exclusivity in Israel.

As highlighted above, this one-sided proposal, which the Israeli Justice Ministry mistakenly states will have no detrimental impact on any groups, is especially challenging to Innovators. Although the proposal is still subject to approval by the Israeli Parliament, its potential to further erode non-patent drug exclusivity means Innovators need to take immediate note. If the proposal is ratified, Innovators will need to be particularly vigilant to ensure they are prepared for potential generic launch at-risk and export by Israeli Generics during the PTE period.