LCM by adding indications
The results of the investigation of LCM with additional indications showed that the number of active ingredients with multiple indications for ODs was 39% (68 ingredients), which was less than one-half of the total but accounted for a certain number. Of these, the majority (57 ingredients) had non-OD indications with a large number of patients. In addition, disease areas where LCM for additional indications were being conducted included field 2 (cardiovascular, anti-Parkinson’s, etc.), field 6 − 1 (respiratory, allergy, sensory organs with inflammatory diseases, etc.), and the anticancer field.
Among ODs we investigated, 7 products (3 ODs in oncology, 3 ODs in immunology, and 1 OD in others) were included in the top 20 domestic pharmaceutical products [13] in terms of sales in FY2019: Keytruda®, Avastin®, Opdivo®, Samsca®, Remicade®, Humira®, and Prograf®. All of these products have non-OD indications, and the disease areas are also the areas with many additional indications in our results. On the basis of these drugs, we discuss how the LCM of additional indications can overcome the sales issue of the OD business.
The anticancer field, which has the largest number of approved ODs, is the largest market, accounting for more than 10% of the domestic market [13]. Anticancer drugs are often expanded by changing the target organs to other indications. In addition, to obtain OD designation, diseases are easily sub-grouped to limit the number of target patients at the genetic level. Furthermore, patients for whom existing therapies are not effective can be collected. Some ODs have been first approved for diseases with prefixes such as “relapsed,” “refractory,” or “gene-positive” in the target disease name (e.g., “relapsed or refractory multiple myeloma” and “ROS1 fusion gene-positive unresectable advanced or relapsed non-small-cell lung cancer”). For example, Opdivo® obtained approval as an OD for the target disease and subsequently obtained non-OD approval. Opdivo® was approved in 2014 for the indication of OD in malignant melanoma, with an estimated 2000 new patients per year. The initial National Health Insurance price was set high at JPY 730,000 per 100 mg because of its novel mechanism of action and high response rate and efficacy in clinical trials and because it was the first drug of clinical significance for malignant melanoma since the mid-1980s [14]. In 2016, Ono Pharmaceutical Co., Ltd. received additional approval for non-small-cell lung cancer (estimated 100,000 new patients per year) in a non-OD indication, expanding the number of patients eligible for the drug and increasing sales to close to JPY 100 billion, making it the fourth-largest-selling medication [15].
In field 6 − 1, numerous ODs have been approved for diseases with prefixes such as “intractable” in the name of the target disease, such as the acute stage of Kawasaki disease and intestinal Behcet’s disease, for which existing treatments are insufficiently effective. For example, Remicade® and Humira® added rheumatoid arthritis, which is a non-OD indication, and achieved annual sales of JPY 50 billion [15].
In this study, we found that 24 ingredients were approved for non-OD indications after OD indications were approved. The use of development incentives such as priority review and high drug prices (additional payment for new drug creation, etc.) were expected when OD indications were developed. In addition, the number of patients eligible for non-OD indications could be expanded through non-OD development. These findings suggest that the addition of non-OD indications will contribute to increased sales. However, with respect to the order in which indications were acquired, non-OD indications were acquired first in a large number of cases. Specifically, 34 ODs were developed by adding OD indications from non-OD indications. Using the approved non-OD for OD development enabled the problem of profitability to be overcome while meeting the unmet needs of rare diseases and opening new markets by expanding the indication to the OD indication.
Because the profitability of ODs is a concern, we speculated that the development of ODs with additional indications would be widely used to increase the number of patients. However, the number of ODs with additional indications was 68 of 173, which is less than one-half. Specifically, the percentage of additional indications was low, ranging from 0 to 21%, in areas such as field 4 (antibacterial agents, etc., except for AIDS), field 6 − 2 (hormonal agents, drugs for metabolic diseases, etc.), AIDS medications, vaccines, and blood products. These results can be explained by additional indications for antimicrobials and vaccines being difficult to obtain because of their specificity to their target viruses. Because many ODs in field 6 − 2 are designed to replenish specific enzymes that have been inactivated, which is the cause of the disease, applying these drugs to other diseases is difficult. These results suggest that there are a certain number of active ingredients for which obtaining additional indications for the LCM of ODs is difficult, depending on the disease field, and that there is a strong need to obtain an exclusivity period.
In summary, the characteristics of LCM by additional indications are as follows: (1) non-OD indications are commonly added, (2) there are many additional indications in fields such as oncology and immunology, which may overcome the problem of sales, and (3) more than one-half of ODs have no additional indications, suggesting a greater need to obtain exclusivity.
LCM by marketing exclusivity
The results of this study on marketing exclusivity in ODs show that (1) 76% of the ODs have patents, and most of them have been registered for patent extension; (2) many of the ODs are protected by extended patents of pharmaceutical substances and compositions (uses); (3) almost all of the ODs have the longest re-examination period of 10 years; (4) many of the ODs have patent exclusivity periods longer than their re-examination periods; (5) 177 ODs (87%) of all approved ODs have additional indications or patent extensions; and (6) generic ODs are not currently being actively developed in Japan.
In the United States, the registration of patent extensions is restricted; a single patent can be extended only once. By contrast, in Japan, multiple patents can be extended multiple times. Therefore, as the first characteristic, we found that 125 ODs of 154 products with patents were registered for patent extension using the unique Japanese system and that an average of 2.2 patents per product were extended. Asada et al. have reported that the most important incentive for pharmaceutical companies to develop ODs is the longer re-examination period, and they speculated that many ODs were developed under only the exclusive right of the re-examination period [5]. However, our results reveal that three-fourths of the approved ODs were protected by patents and their extensions. Therefore, as with general non-ODs, many ODs obtain marketing exclusivity through LCM using patents and their extensions.
On the other hand, 49 ODs (24% of the 203 approved ODs) were not protected by patents, suggesting that the re-examination period also plays some role.
We here discuss the types of patented inventions. In general, during drug development, a patent application for a pharmaceutical substance is first filed to protect the active ingredient itself. A patent application is then filed for a pharmaceutical composition (use) as an additional indication when a different indication than the original is found. In addition, a patent application is filed for a pharmaceutical composition (specific formulation) such as an extended-release formulation. Because of the small number of target patients and the sufficiently long re-examination period for ODs, we thought that the patent strategy for ODs was not as important as non-ODs. However, our results showed that 90% of the 154 ODs having patents (94% of the products for which extensions were registered) were protected by pharmaceutical substance or use inventions, which are most important for protecting the drug. In addition, the results for additional indications showed that OD approval was the first approval for all items except 34 ODs with prior non-OD approval, suggesting that patent protection was planned from the beginning of drug development and that patents were also emphasized in OD LCM.
The classification of inventions in the patents without extension registration was characterized by the fact that the ratio of manufacturing methods (pharmaceuticals) was as high as 55%, which was second to that of pharmaceutical compositions (uses) at 59%. Many of these ODs were approved by the PMDA before the patent was granted. Thus, we inferred that, even in the late stage of clinical trials, patent applications for use or formulation were actively filed and, as a result, the patent rights were not granted in time for pharmaceutical approval.
Our results that the re-examination period being 10 years in almost all cases revealed that the re-examination period as an OD development incentive seems utilized to the maximum extent. However, the patent duration was longer for 126 ODs. Although the re-examination period is at the longest 10 years from the pharmaceutical approval of the designated OD, the patent extension period is determined by the clinical trial period. Because estimating the clinical trial period accurately in advance is difficult, it is unclear how much of the patent period, including extensions, will remain after regulatory approval. Although a discrepancy may exist between the pharmaceutical companies’ initial intention and the results, at least 126 of 203 products had a longer patent term than the re-examination period as a result. This finding suggests that pharmaceutical companies are emphasizing patent protection as part of LCM rather than relying on the re-examination period in OD development. In addition, small-molecule ODs in the United States are also granted a seven-year market exclusivity period after approval; however, the percentage of products with a longer market exclusivity period than the patent protection period has been declining in recent years [16]. These findings indicate that, in both Japan and the United States, pharmaceutical companies place greater importance on extending the period of exclusivity through protection by the patent term than on re-examination or the market exclusivity period as an incentive to promote OD development. In addition, the effect of excluding generics of the relevant OD is high because most of the inventions are pharmaceutical substance or use patents.
Summary of LCM by adding indications and registering patent extensions
Regarding limitations of LCM by adding indications and registering patent extensions, this study showed that 26 ODs (13% of the total) have neither additional indications nor patent extensions registered. These 26 products include many drugs in field 6 − 2 (hormones and drugs for metabolic diseases), where adding other indications might be difficult because of the mechanism of the drugs and where filing patent applications might be difficult from the viewpoint of novelty or non-obviousness of the active ingredients. Therefore, it is important to ensure the exclusivity period for the development of such ODs through the re-examination period.
However, 177 ODs (87% of the 203 ODs), excluding the aforementioned 26 ODs, have an additional indication or patent extension. Thus, the developers of many ODs in Japan are proactively trying to maximize profits not only through development incentives such as the extension of the re-examination period but also through LCM by adding indications or a patent extension.
Od Generics
The re-examination period and the protection by patents and their extensions are used to prevent a decline in sales and profitability resulting from a decrease in market share when a generic is launched. We, therefore, investigated the status of generic drug launches of ODs in Japan. As of the end of January 2021, there were 23 ODs whose re-examination period and patent protection period have expired; among them, only three generics (13%) have been launched. That is, generics of ODs in Japan are not being actively developed. Sarpatwari et al. pointed out that, for small-molecule ODs in the United States, the launch of generics relative to brand ODs as of 2017 was ~ 50%, which is less than the percentage of generics among non-ODs in the United States [16]. Although a direct comparison between the United States and Japan is difficult because of the differences in insurance and drug pricing systems, the development of generic OD products in Japan thus far appears to be less active than that of generic ODs in the United States; thus, pharmaceutical companies can sell their original drugs exclusively in Japan even after the expiration of the exclusive period. However, in Japan, where the population is aging and medical costs continue to increase, the use of generics is being promoted to reduce the impact on public finances; consequently, the use of generics has now reached 79.3% on a volume basis [17]. Therefore, the importance of patent-based LCM will increase for the original OD development companies in the future, when generics are more actively developed in the OD market in Japan.
Limitations
There are two main limitations to this study. Concerning the analysis of additional indications, sales and profits of drugs by indication should be investigated to quantitatively evaluate the effectiveness of LCM by additional indications on sales and profitability. However, these data are not available to the public and are difficult to obtain. Therefore, this study only discusses the indirect impact on sales by estimating that the number of patients will increase as a result of the additional indication.
With regard to patent searches, because the so-called patent linkage between new drugs and their related patents is not disclosed in Japan, the comprehensiveness of patent searches for 78 items other than those that are identifiable by pharmaceutical approval and have been registered as extensions (125 items) cannot be guaranteed.