Does the Patent Linkage System Prolong Effective Market Exclusivity? Recent Evidence From the Korea-U.S. Free Trade Agreement in Korea

Abstract

This study evaluated the effect of the patent linkage system, fully introduced by the Korea-U.S. Free Trade Agreement in 2015, on patent challenges and the effective market exclusivity of new medicines in Korea. We used pharmaceutical approval data and pharmaceutical litigation data to detect new medicines and their counterparts, to collect patent challenges against new medicines, and to calculate effective market exclusivity for new medicines. Then, a nonparametric event history model was applied to statistically explain the duration of the market exclusivity of new medicines. Between 2007 and 2011, a total of 94 new medicines, consisting of 82 new chemical entities and 12 new biologics, were approved. The patent linkage system encouraged patent litigations to occur sooner, with a race to challenge the patents by various generic applicants. However, it was difficult to conclude that patent challenges had a significant impact on the prolongation of effective market exclusivity. The patent linkage system had a neutral effect on the effective market exclusivity of new medicines and encouraged patent challenges without abbreviating effective market exclusivity. In addition, this study highlights an important issue regarding biologics that has not been the subject of market competition, even for patent challenges.

Keywords

patent linkage linkage market exclusivity free trade agreements patent challenge

The patent linkage system refers to the establishment of a linkage procedure between marketing approvals for follow-on drugs, including generics or follow-on biologics, and the patent status of their original counterparts.¹ It is one of the strategies that is assumed to prolong market exclusivity for patented medicines.² With the implementation of the Drug Price Competition and Patent Term Restoration Act of 1984, better known as the Hatch-Waxman Act, this system was first established for chemical entities in the United States.³

In the United States, the patent linkage system for chemical entities consists of 4 parts: (1) the patent list, (2) the notification process, (3) a stay on marketing approval, and (4) first generic exclusivity. A generic applicant can initiate a challenge to the validity of patents or a claim of noninfringement of patents included on the patent list (patent list), which is known as a paragraph IV challenge. Then, the applicant provides notification of these claims to both the owner of the patent and the holder of marketing approval (notification process). The owner of the patent and the holder of marketing approval may initiate an infringement action, after which patent linkage mandates a 30-month stay of generic registration, thereby preventing generics of patented pharmaceuticals from obtaining marketing approval (stay on marketing approval).³ In addition, the Hatch-Waxman Act provides an incentive for generic applicants to challenge the patents of the original medicine on the grounds of noninfringement and invalidity.⁴ The first generic applicant to file a paragraph IV challenge resulting in marketing prior to patent expiration is granted 180-day exclusivity (first generic exclusivity).⁵

It should be noted that the Hatch-Waxman Act does not apply to biologics; therefore, biologics are not subject to the same patent linkage system afforded to chemical entities.³ Specifically, the patent list applies only to chemical entities. There is no equivalent to the list for biologics, even though similar obligations of patent linkage apply in some instances. For example, an applicant submitting a biosimilar product for marketing approval is also required to provide notification of the application to the holder of marketing approval for the biological reference product. However, the stay on marketing approval for a biosimilar product is given effect by the granting of a preliminary injunction by the court without involvement of the FDA.

We should note that the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) does not address the patent linkage system,⁶ which is the reason that patent linkage is referred to as one of the notable “TRIPS-plus” provisions.^7,8 As a counterpart of the patent linkage system, TRIPS provides only a general enforcement of patent rights, e.g., in legal disputes concerning patent infringement. In this traditional system, patent holders must prove the likelihood of successful patent litigation against generic applicants. In the patent linkage system, however, patent holders are granted a de facto injunction against generic applicants without any evaluation of the merits of their claims.⁹

Serious concerns have arisen from the introduction of the new system. Many researchers and civic activists have warned of a potential significant obstacle to the timely availability of generic medicines and, thus, high prices of the original medicines due to monopoly.^2,3,10–12 Furthermore, empirical research demonstrates that patent linkage in the United States is quite effective in delaying generic entry, thereby extending the market exclusivity of new medicines.¹³ However, there has been little empirical evidence of the effect of the system on timely availability of generic medicines in other markers. Notably, Lexchin observed that there have been almost no empirical studies on the patent linkage system, despite the controversial rhetoric associate with this system.¹⁴

The aim of this study is to provide recent evidence of the effect of the patent linkage system on the Korean pharmaceutical market, including patent challenges against new medicines approved by the Ministry of Food and Drug Safety (MFDS) between 2007 and 2011, and the effective market exclusivity of new medicines with a number of counterparts, including generics and follow-on biologics. Finally, we statistically explain the duration of the effective market exclusivity of new medicines using a nonparametric event history model.

The Patent Linkage System in Korea

Korea introduced a patent linkage system that notably captured biologics after trade negotiations with the United States.¹⁵ Specifically, the Korea-U.S. Free Trade Agreement, which was conceived in 2007, describes this system in 3 parts: “a patent list that would be protected under the patent linkage system,” “a system that the patent owner shall be notified of the identity of any such other person that requests marketing approval to enter the market during the term of a patent,” and “measures in marketing approval process to prevent other persons from marketing approval.”¹⁵

In 2012, the government of Korea introduced 2 parts to the system: (1) the patent list and (2) the notification process. In addition, the government implemented (3) a 9-month stay on marketing approval and (4) a 9-month first generic exclusivity on March 15, 2015.^11,15,16 If an application for drug approval, including that of generics and follow-on biologics, is submitted relying on safety and efficacy data for the new medicines listed as drugs on the patent list, the applicant shall notify the owner of the patent and the holder of marketing approval (the owner of the patent). Then, the owner of the patent may file patent litigation against the applicant within 45 days from the date of receiving notification and apply for a stay of sale against the follow-on drugs to the MFDS. The sale is stayed for 9 months from the date on which the owner of the patent receives notification. However, a decision or ruling that the listing of the patent on the list is invalid or that the patent is not infringed by the follow-on drug shall be grounds for the termination of a stay of sale. Lastly, an applicant may be granted a 9-month period of exclusivity starting from the date of market entry of the follow-on drugs, provided that the applicant (1) is the first generic applicant who has challenged a patent and obtained a favorable decision or (2) is the first generic applicant to file a challenge within 14 days of the first challenge and has subsequently become the first to obtain a favorable decision.¹⁶

Methods

Materials

New medicines, as designated by the MFDS, refer to a drug composed of new materials; a substance with a chemical structure or construction that is wholly new; or a combination drug containing new materials as effective ingredients in Korea (Pharmaceutical Affairs Act Article (1)). Building on this definition, we defined new medicines based on their active ingredients. For instance, we considered new medicines with the same active ingredient but different strengths as the same medicine.

Specifically, we selected new medicines approved by the MFDS between 2007 and 2011 for the study. The government of Korea adopted health technology assessments for reimbursement decisions concerning new medicines in 2006.^17,18 The government implemented a “drug expenditure rationalization plan (the Plan)” to rationalize pharmaceutical expenditures. Specifically, a positive list system (PLS) was introduced in 2007. Therefore, manufacturers who want reimbursement for their new drugs must submit their applications and related dossiers to the Health Insurance Review and Assessment Service (HIRA). Given the newly introduced PLS, we excluded new medicines approved before 2007. In addition, 6 years of statutory data exclusivity is granted to new drugs by the MFDS. Data exclusivity is defined as the protection of data prepared by the innovators of new medicines and submitted to the marketing authority. Accordingly, competitors, such as generic applicants, are not permitted to apply and obtain marketing approval if they rely on the data that the innovator submitted.^19,20 Given the 6 years of data exclusivity, we excluded new medicines approved after 2012; for instance, a new medicine approved in 2012 shall be granted data exclusivity by the MFDS until 2018.

Data Sources and Collection

The dataset used in this study was prepared from publicly available information obtained from the MFDS (available at http://drug.mfds.go.kr/html/search_total_download_itemPermit.jsp) and the Korea Institute of Patent Information (KIPRIS) (available at http://www.kipris.or.kr/khome/main.jsp#). We used the pharmaceutical approval database of the MFDS to identify new medicines and their counterparts and to calculate the effective market exclusivity periods of new medicines. The pharmaceutical approval database contains information on all drugs approved by the MFDS since 1955. Specifically, it provides information regarding the drug name, active ingredients, strength, route of administration, and dosage. Therefore, we were able to identify generics or follow-on biologics of new medicines by using the database. However, it does not provide information on the status of reimbursement, including price information, production type, and the Anatomical Therapeutic Chemical Classification System code (ATC classification). To find this information, we used an online drug library (available at http://drug.mfds.go.kr/html/index.jsp) that is under the jurisdiction of the MFDS. In addition, we used the pharmaceutical litigation database from the KIPRIS to collect information regarding the patent challenges filed against the new medicines.

Models

This study is concerned with addressing the duration of effective market exclusivity. In this study, we define effective market exclusivity as the time difference between the approval date of the new medicines and that of their counterparts. We also defined the litigation year as the time difference between the approval date of the new medicine and the date of the first patent challenge filed against the new medicine.

However, our observations are right-censored: their time of completion (or market competition) is beyond the timeframe of our observations. Therefore, we apply event history models to determine the statistical estimation and explanation of the right-censored duration of the exclusivity of new medicines. These models, also known as duration models, are widely used in the medical and social sciences for the representation of processes and dynamics.^21–24 They estimate the duration until an event occurs (in our case, the marketing of generics or follow-on biologics) and identify abbreviating or prolonging factors.

We used data on new medicines, their counterparts, and patent challenges. We defined the effective market exclusivity as the dependent variable. Accordingly, we constructed the dependent variable as the time difference between the date of the market approval of new medicines and that of their counterparts. Data management and analysis were performed using R statistical software (version 3.4.1). Significance was considered for P-values less than .05.

We provide a selective descriptive overview of the differences in the duration of effective market exclusivity by using Kaplan–Meier estimates. Based on the survival function reflecting the probability of surviving at a certain point in time, this method indicates the conditional probability that market exclusivity will end after a given period.²⁵ Specifically, the curve indicates the proportion of new medicines retaining exclusivity status after a specific period. In particular, the higher the level of a curve, the longer the exclusivity period for a given group of new medicines.

As the Kaplan–Meier survival estimates constitute a univariate tool, we also applied a multivariate approach to determine the relative impact of the specific factors on duration: a proportional hazards model. In our model, we included 6 discrete factors as dummy variables: ATC classification, reimbursement, production types, route of administration, patent challenge, and period.

Notably, we added the period as an explanatory variable. The stay on marketing approval, which is an essential part of the patent linkage system, was introduced in March 2015.¹¹ Based on this approach, we separated new medicines into 2 periods: a first period (2007–2008) and a second period (2009–2011). Specifically, we assumed that the second period was directly influenced by the patent linkage system: statutory exclusivity for new medicines approved in the second period ended after 2015, when the stay of the generic registration was introduced.

Results

Approved New Medicines

Table 1 summarizes the number of new medicines approved between 2007 and 2011. There were a total 94 new medicines – 82 new chemical entities and 12 new biologics. The majority of new medicines were chemical entities. The new medicines were classified according to the first level of ATC classification. Most of the pharmaceuticals belonged to Code J (anti-infectives for systematic use) and Code L (antineoplastic and immunomodulating agents); specifically, the numbers of medicines belonging to these classifications were 16 and 14, respectively.

Table 1.
Characteristics of New Medicines Approved Between 2007 and 2011.

2007, n = 24 2008, n = 21 2009, n = 13 2010, n = 17 2011, n = 19 Total, n = 94

Types

Chemicals 20 19 13 14 16 82

Biologics 4 2 – 3 3 12

Reimbursement

Yes 17 16 10 13 14 70

No 7 5 3 4 5 24

Production types

Import 21 16 8 15 15 75

Local production 3 5 5 2 4 19

Route of administration

Oral 16 11 9 9 13 58

Injection 6 7 1 7 5 26

Others 2 3 3 1 1 10

ATC classification^a

A 4 2 1 1 3 11

B – – 1 1 3 5

C 3 – 1 2 1 7

D 1 1 1 – – 3

G 2 4 1 – 6 13

H – – – 1 – 1

J 4 5 1 5 1 16

L 5 2 2 3 2 14

M – – 1 – – 1

N 2 1 2 3 – 8

P – – – – 1 1

R 1 1 – 1 1 4

S 1 1 1 – 1 4

V – 4 – – – 4

NA 1 – 1 – – 2

Abbreviations: A, alimentary tract and metabolism; ATC, Anatomical Therapeutic Chemical; B, blood and blood-forming organs; C, cardiovascular system; D, dermatologicals; G, genitourinary system and sex hormones; H, systemic hormonal preparations, excluding sex hormones and insulins; J, anti-infectives for systematic use; L, antineoplastic and immunomodulating agents; M, musculoskeletal system; N, nervous system; NA, not available; S, sensory organs; P, antiparasitic products, insecticides, and repellents; R, respiratory system; S, sensory organs; and V, various.

^aATC classification.

The approved new medicines are eligible for reimbursement under the national health insurance. HIRA is responsible for the registration of new medicines on the positive list based on clinical effectiveness and cost effectiveness.^17,18 Seventy out of 94 new medicines were eligible for reimbursement, while only 5 out of 12 biologics were on the list. Finally, 75 of the 94 new medicines were imported drugs. Interestingly, all 12 new biologics were imported drugs.

Patent Challenges Against the New Medicines

Table 2 presents the litigation year, which was defined as the time difference between the approval date of the new medicine and the date of the first patent challenge filed against the new medicine, segmented by the approval year of the new medicine. For instance, the MFDS approved 24 new medicines, and 8 of these 24 new medicines were subject to patent challenges in 2007. The average litigation year of these 8 new medicines was 7.8 years in 2007. Interestingly, the average litigation year continuously decreased from 7.8 years in 2007 to 3.7 years in 2011. We also present the distribution of the litigation year. Table 2 reveals that after 2009, patent challenges following the approval of new medicines occurred sooner.

Table 2.
Patent Challenges by the Year of Approval of New Medicines.

2007, n = 24 2008, n = 21 2009, n = 13 2010, n = 17 2011, n = 19 Total, n = 94

Challenged 8 6 6 5 7 32

Average litigation year 7.8 7.2 5.6 4.5 3.7 5.9

Distribution

<4 Years – – 1 1 5 7

4–5 Years – – – 2 2 4

5–6 Years – – 4 2 – 6

6–7 Years 1 3 – – – 4

7–8 Years 4 2 – – – 6

8–9 Years 2 1 1 – – 4

>9 Years 1 – – – – 1

However, we should note that this observation is right-censored.²⁵ We do not know precisely how long unchallenged situations will last; i.e., patent challenges that occur after the recorded time are beyond our observations.

Effective Market Exclusivity

Table 3 presents the effective market exclusivity, which was defined as the time difference between the approval date of new medicines and that of their counterparts, also segmented by the approval year of the new medicines. Note that new medicines have 6 years of statutory (data) exclusivity in Korea, which reflects the protection of clinical data prepared by the innovators and submitted to the marketing authority.²⁶ During this period, the innovator’s counterparts, such as abbreviated new drug application applicants, are not permitted to apply for and obtain marketing approval relying on the data that an innovator submitted.^19,20

Table 3.
Effective Market Exclusivity of New Medicines by the Year of Approval.

2007 2008 2009 2010 2011 Total

Total 24 21 13 17 19 94

Ongoing 17, (10+ years) 16, (9+ years) 7, (8+ years) 13, (7+ years) 16, (6+ years) 69

Terminated 7 5 6 4 3 25

Average 7.25 6.94 7.33 6.52 6.21 6.97

Distribution

6–7 Years 3 2 2 3 3 13

7–8 Years 3 3 2 1 9

8–9 Years 1 2 3

No. of generics

Range 1–78 1–2 1–28 3–8 2–10 1–78

Mean 20 1.2 5.7 5.8 7 9.2

Median 13 1 1 6 9 3

The MFDS approved a total of 24 new medicines in 2007, and 7 of these 24 new medicines have faced market competition. The average number of years of market exclusivity for these 7 new medicines was 7.25 years in 2007. In comparison, 19 new medicines were approved in 2011, and only 3 of these new medicines have experienced market competition. We also present the distribution of the effective market exclusivity. We could not identify a decreasing trend in the average years of market exclusivity similar to that of the patent challenges in this right-censored observation.

Kaplan–Meier Estimates

The first graph in Figure 1 depicts a Kaplan–Meier curve without a group comparison. It smoothly declines after 6 years, which shows 6 years of statutory data exclusivity for the new medicine. The figure also shows that even after 10 years from the approval date of a new substance, the majority of new medicines (68%) remain noncompetitive. As indicated by the confidence interval, the variance is small for a short exclusivity period, whereas it increases at the right margin, which occurs due to a few cases.

Figure 1.
Kaplan–Meier estimates for effective market exclusivity.

The other remaining graphs are separated by groups. First, we compared exclusivity periods by the approval year: the first period was 2007–2008, and the second period was 2009–2011. The effective market exclusivity was short in the second period. For instance, even after 8.72 years from the date of the approval (or after 2.72 years from the expiration date of data exclusivity), 73.3% of new medicines remained monopolized in the first period, while 55.4% of new medicines remained monopolized in the second period. However, the difference in survival between the 2 periods was not significant (the survdiff function in R statistical software was used to test the difference).

Second, we compared exclusivity periods by patent challenge, namely, the patent challenge group with the no-challenge group. The survival function of the patent challenge group declined rapidly compared to that of the no-challenge group. After 8.72 years from the date of approval (or 2.72 years from the expiration date of data exclusivity), only half of the new medicines remained monopolized in the challenged group. However, 76.9% of the new medicines remained monopolized at the same time in the nonchallenged group. A final example considered the effective market exclusivity for different drug types. Notably, no biologics experienced market competition.

Cox Proportional Hazards Model

We fitted the Cox model with 6 discrete factors: production types, reimbursement, route of administration, patent challenge, ATC classification, and period. We provide interpretations for these linearly specified variables in Table 4. Note that a negative coefficient means prolongation of market exclusivity. Interestingly, pharmaceuticals belonging to Code J (anti-infectives for systemic use) and Code L (antineoplastic and immunomodulating agents) exhibited a significantly prolonged duration of monopoly (P < .05). Additionally, it seems that the factors of nonreimbursement, the second period (2009–2011), and patent challenges accelerated market competition, while other factors, such as import and a route of administration other than the oral route, prolonged the market monopoly. However, these variables were not significant in the model.

Table 4.
Results From the Cox Model With Effective Market Exclusivity as the Outcome.

Variable Coefficient Standard Error P

Production type: import (Ref. local production) −0.3322 0.5175 .5209

Reimbursement: nonreimbursed (Ref. reimbursed) 0.6503 1.247 .2125

Route of administration: inject (Ref. oral route) −0.3637 0.5502 .5086

Route of administration: others −1.7490 1.0811 .1057

Patent challenge: challenged (Ref. nonchallenged) 0.8783 0.4805 .0676

ATC classification^a: ATC J or L (Ref. others) −1.1513 0.5737 .0448

Period^b: the second period (Ref. the first period) 0.6771 0.4329 .1178

Abbreviations: ATC, Anatomical Therapeutic Chemical; J, anti-infectives for systematic use; L, antineoplastic and immunomodulating agents.

^aATC classification.

^bPeriod: the first period (2007–2008) and the second period (2009–2011).

Discussion

In 2015, the government of Korea fully introduced the patent linkage system, which is one of the notable TRIPS-plus provisions, after trade negotiations with the United States. There were serious concerns in establishing the new system, specifically from the perspective of the delayed marketing of generics in Korea.^10,11 This study provides recent evidence regarding the effect of the patent linkage system on the Korean pharmaceutical market, specifically concerning patent challenges against the new medicines approved by the MFDS between 2007 and 2011 and the effective market exclusivity of new medicines with a number of their counterparts. Finally, we statistically explained the duration using a nonparametric event history approach.

According to our observations, the likelihood of patent challenges being filed during the statutory exclusivity period, which is a 6-year period commencing on the date of the marketing of new medicines, has increased substantially in recent years. Specifically, there were no challenges during statutory exclusivity in the first period (2007–2008). However, in the second period (2009–2011), 18 out of 49 new medicines (37%) experienced patent challenges. This finding indicates that the patent linkage system has encouraged patent litigation to occur sooner. We also found that the patent linkage system has induced significant behavioral changes in patent challenges. For instance, there has been a race to challenge patents by numerous pharmaceutical firms. Specifically, there were 1,477 patent challenges for new medicines approved between 2007 and 2011 in Korea. Interestingly, we detected similar trends in the United States,^4,27,28 indicating a race to patent challenges, which occurred sooner following the marketing of new molecular medicines.

However, it should be noted that the number of new medicines undergoing patent challenges was limited. For instance, 31 out of 45 new medicines approved in the first period have not yet experienced patent challenges. Furthermore, no biologics have experienced patent challenges. We obtained some clues regarding these observations from experiences in the United States. It was reported that core patents, such as patents for active ingredients, are less likely to be challenged than noncore patents.⁴ Given this observation, we can conclude that patent linkage encourages generic medicine applicants to challenge weak patents.

A number of studies have examined the role of patent challenges and their effects on market exclusivity in the United States. However, the results have been inconsistent.^4,27,29,30 Patent challenges have decreased the effective market exclusivity period for new molecular entities,^4,29 but there is no evidence of a statistically significant effect on accelerating market competition.²⁷ Furthermore, the average market exclusivity for new molecular entities experiencing generic entry did not decrease between 1995 and 2014 in the United States, although it only ranged between 12.2 and 13.7 years.²⁹

It is impossible to calculate the average effective market exclusivity of new medicines approved in specific years based on our right-censored observations. Therefore, we separated our observations into 2 groups (ongoing exclusivity and terminated exclusivity) and calculated the average effective market exclusivity for the terminated exclusivity group. In contrast to the results of patent challenges, we could not identify accelerating trends in effective market exclusivity. In line with the experience in the United States, it is difficult to conclude that patent challenges have an impact on effective market exclusivity in the Korean market. Patent challenges seem to have occurred sooner than previous challenges; however, their impact on the marketing of generics was not significant in the statistical analysis.

These interesting observations could be partially explained by the neutral effect of the patent linkage system. The patent linkage system was established to ensure that the regulatory authority does not unduly promote patent infringement. Before the introduction of the system, patent holders could alternatively initiate suits for potential patent infringement in Korea. Under the previous system, however, patent holders had to prove the likelihood of success against generics to request a preliminary injunction, which is not an easy process. Therefore, generic applicants could easily be granted marketing approval without using patent challenges, typically immediately following the 6-year statutory data exclusivity period.

However, the patent linkage system changed the nature of the putative infringement. Under the new system, patent holders are granted a de facto injunction against generic applicants without any evaluation of the merits of their claims.⁹ Specifically, a 9-month stay on marketing approval is granted to patent holders. Hence, the role of patent challenges should not be underestimated under the new system. If patent challenges are not initiated, then the marketing approval of generics will be stayed for 9 months. Furthermore, patent challenges are needed for generic applicants to be granted 9 months of generic exclusivity, which would function as a competitive advantage in the generic pharmaceutical market.^31,32 This indicates that patent challenges are essential to the timely marketing of generics under the current system, which were not needed under the previous system.

Finally, this study highlights an important issue regarding biologics, which account for an increasing share of new drugs. Several authors have raised concerns that the market for biologics will function differently from that for chemical entities, with fewer patent challenges, fewer entrants, and longer market exclusivity.^33–35 We found trends in line with these observations. Twelve new biologics approved between 2007 and 2011 have not been the subject of market competition, even for patent challenges. This finding indicates that patent challenges and effective market exclusivity for biologics should be closely monitored. Furthermore, various statutory incentives for marketing follow-on biologics should be devised to address the limited market competition for biologics.

There are some limitations of this study, which mainly arise from data availability. First, this study identified patent challenges against new medicines using pharmaceutical litigation data. However, we could not examine the outcome of patent challenges, which provides a critical mechanism for follow-on drugs to enter the market, either by avoiding the stay of generic registration or by utilizing generic exclusivity. Second, the results of this study are limited to the short-run effect of patent linkage in Korea, and generalizations should not be made regarding long-run effects or effects in other countries. Lastly, it should be acknowledged that the before-and-after study design could not account for preexisting trends.

Conclusions

Korea introduced the patent linkage system, which is referred to as one of the notable TRIPS-plus provisions, after trade negotiations with the United States.¹¹ Under the new patent linkage system, patent holders are granted a de facto injunction against generic applicants without an evaluation. Given this characteristic of the new system, there have been serious concerns regarding its introduction in Korea. Specifically, researchers and civic activists have warned of a potential and significant obstacle to the timely availability of generic medicines and, thus, high prices of original medicines due to monopoly.^2,3,10,11

This study provides recent evidence of the effect of the patent linkage system on the Korean pharmaceutical market and statistically explains the duration of effective market exclusivity for new medicines using a nonparametric event history approach. The patent linkage system has encouraged patent litigation to occur sooner, with a race to challenge patents by various generic applicants. However, it was difficult to conclude that patent challenges have had a significant impact on prolonging effective market exclusivity in our event history model. In other words, the patent linkage system has encouraged patent challenges without prolonging the effective market exclusivity of new medicines.

	2007, n = 24	2008, n = 21	2009, n = 13	2010, n = 17	2011, n = 19	Total, n = 94
Types
Chemicals	20	19	13	14	16	82
Biologics	4	2	–	3	3	12
Reimbursement
Yes	17	16	10	13	14	70
No	7	5	3	4	5	24
Production types
Import	21	16	8	15	15	75
Local production	3	5	5	2	4	19
Route of administration
Oral	16	11	9	9	13	58
Injection	6	7	1	7	5	26
Others	2	3	3	1	1	10
ATC classification^a
A	4	2	1	1	3	11
B	–	–	1	1	3	5
C	3	–	1	2	1	7
D	1	1	1	–	–	3
G	2	4	1	–	6	13
H	–	–	–	1	–	1
J	4	5	1	5	1	16
L	5	2	2	3	2	14
M	–	–	1	–	–	1
N	2	1	2	3	–	8
P	–	–	–	–	1	1
R	1	1	–	1	1	4
S	1	1	1	–	1	4
V	–	4	–	–	–	4
NA	1	–	1	–	–	2

	2007, n = 24	2008, n = 21	2009, n = 13	2010, n = 17	2011, n = 19	Total, n = 94
Challenged	8	6	6	5	7	32
Average litigation year	7.8	7.2	5.6	4.5	3.7	5.9
Distribution
<4 Years	–	–	1	1	5	7
4–5 Years	–	–	–	2	2	4
5–6 Years	–	–	4	2	–	6
6–7 Years	1	3	–	–	–	4
7–8 Years	4	2	–	–	–	6
8–9 Years	2	1	1	–	–	4
>9 Years	1	–	–	–	–	1

	2007	2008	2009	2010	2011	Total
Total	24	21	13	17	19	94
Ongoing	17, (10+ years)	16, (9+ years)	7, (8+ years)	13, (7+ years)	16, (6+ years)	69
Terminated	7	5	6	4	3	25
Average	7.25	6.94	7.33	6.52	6.21	6.97
Distribution
6–7 Years	3	2	2	3	3	13
7–8 Years	3	3	2	1		9
8–9 Years	1		2			3
No. of generics
Range	1–78	1–2	1–28	3–8	2–10	1–78
Mean	20	1.2	5.7	5.8	7	9.2
Median	13	1	1	6	9	3

Variable	Coefficient	Standard Error	P
Production type: import (Ref. local production)	−0.3322	0.5175	.5209
Reimbursement: nonreimbursed (Ref. reimbursed)	0.6503	1.247	.2125
Route of administration: inject (Ref. oral route)	−0.3637	0.5502	.5086
Route of administration: others	−1.7490	1.0811	.1057
Patent challenge: challenged (Ref. nonchallenged)	0.8783	0.4805	.0676
ATC classification^a: ATC J or L (Ref. others)	−1.1513	0.5737	.0448
Period^b: the second period (Ref. the first period)	0.6771	0.4329	.1178

Footnotes

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

Author Biographies

Kyung-Bok Son is a professor by special appointment at Ewha Womans University in Korea. He received a master’s degree in 2013 and a PhD in 2016 from the Graduate School of Public Health, Seoul National University, South Korea. He has been studying and researching laws and policies as social determinants of health. In addition, he is interested in intellectual property and the public interest, including patent linkage systems, compulsory licensing of pharmaceuticals, and statutory exclusivities.

SeungJin Bae is an associate professor at Ewha Womans University, College of Pharmacy, in Korea. She received her master’s and doctoral degrees in health policy and management from Harvard School of Public Health and her bachelor’s degree in pharmacy from Ewha Womans University, Korea. Her research interests include the value of pharmaceuticals and outcomes research using the National Health Insurance claims database.

Tae-Jin Lee is a professor of health economics at the Graduate School of Public Health, Seoul National University. He received a PhD from the University of Manchester in the United Kingdom. His research area includes economic analysis of health care systems, focusing especially on health financing and financial protection, as well as economic evaluation of various interventions in the health care sector. He is also interested in pharmaceutical policies, such as reimbursement, pricing of medicines, and access to medicines.

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