Finland: Reform Of The Medicines Act And Implementation Of The Medicines Directive In Finland

The President of Finland has on 13 January 2006 ratified the Act amending the Medicines Act (395/1987), thus completing the pharmaceuticals legislation reform. The first part of the reform concerned the implementation of Directive 2004/27/EC. The second part originated mainly from some local issues on the pharmaceuticals market, e.g., from the balance between generic substitution and patent protection for pharmaceuticals. We will in this newsletter summarize some essential points of the reform.

The Directive 2004/27/EC, amending Directive 2001/83/EC on the Community code relating to medicinal products for human use (the "Directive") was implemented in Finland by amending the Finnish Medicines Act. The new provisions (395/1987) entered into force on 7 November 2005.

The most significant amendment to the Medicines Act deriving from Community legislation concerns data exclusivity, i.e. the period at the expiry of which the generic applicant may refer to the pharmacological, clinical and toxicological studies submitted by the holder of the original MA to the regulatory authorities. The reform ensures that the marketing authorization ("MA") holders obtain at least eight years of data exclusivity in Finland relating to the full dossier of information submitted to the National Agency for Medicines ("NAM") and 10 years of market exclusivity (8+2 rule).

This ten-year period may be extended to a maximum of eleven (11) years if, during the first eight (8) years, the marketing authorization holder has obtained an authorization for one or more new therapeutic indications bringing significant clinical benefit in comparison with the existing therapies.

The former data exclusivity applied by NAM in Finland was six (6) years and the (10) years in case of so-called high-technology products. The new exclusivity periods with the above mentioned 8+2+1 rule have thus significantly improved the protection of the holder of the original marketing authorization in Finland

Finland introduced mandatory substitution on 1 April 2003. NAM compiles on a quarterly basis a list of substitutable products which are subject to mandatory substitution by pharmacies unless the individual patient approves such substitution. The National Agency for Medicines has updated the criteria for compiling the list of substitutable products. The update is based on the new definition of a generic medical product set forth in Article 10(2) of Directive 2004/27/EC. Also the experience gained during three years of generic substitution has been taken into account in the new criteria. The definition of an active ingredient has been made broader, meaning that, e.g., different salts of the same active ingredient become substitutable, provided they otherwise meet the criteria for substitutability. According to the new criteria, tablets may now be substituted for capsules and vice versa. Furthermore, some new substitutable pharmaceutical forms have been included. Antipsychotics and medication used to treat dementia are now also considered to be substitutable. At the beginning of this year some 500 new medicinal products were included on the list of interchangeable drugs.

The renewal provisions of marketing authorizations were amended in connection with the first part of the reform. Before, marketing authorizations were valid for an initial period of five years after which they were renewable for additional five year periods. According to the new provisions of the Medicines Act, the marketing authorization will however be in force indefinitely until further notice after the first renewal. NAM may limit the validity period on the basis of pharmacovigilance grounds. Also marketing authorizations granted before the entry into force of this provision are subject to the new renewal provisions.

Also the so-called "Sunset Clause" was introduced in Finland in connection with the implementation of Directive 2004/27/EC. According to the clause the marketing authorization will be cancelled if the product in question is not launched on the Finnish market within a period three (3) years from the date on which the authorization was granted, or if a product is not marketed within three (3) consecutive years. There have been many pharmaceutical products in Finland which have not been put on the market despite a granted marketing authorization. This provision rationalizes the former practices and aims at preventing unnecessary applications from being filed.

The Finnish Government proposes to implement the so-called "Bolar" provision set forth in the Medicines Directive (2004/27/EC) by amending the Finnish Patent Act (HE 225/2005). According to the Medicines Directive, necessary studies and trials may be conducted in order to fulfill the regulatory requirements for obtaining a marketing authorization for a generic product, and such studies do not constitute an infringement of the patent or SPC protecting the original product. The current list of exemptions set forth in section 3 of the Patents Act for acts which would otherwise constitute patent infringement is narrower than the activities contemplated by Article 10(6) of the Medicines Directive. Consequently, to ensure that the Finnish Patents Act accurately reflects what is required by the Directive regarding this exemption from the patent holder’s exclusive rights, it is proposed that section 3 of the Patents Act be amended. The aim of the reform is to speed up the entry of generic products on the market after the expiry of the patented product.

The most significant issue of the second part of the Medicines Act reform concerns a limitation to generic substitution. The intention with the generic substitution was not to impair patent protection. However, when generic substitution was introduced generic products were listed on fee lost of substitutable products even if the original products still were subject to patent protection. Before the reform it has been possible to put pharmaceutical products containing an active ingredient, the manufacturing method of which is protected by a Finnish process patent, on the list of interchangeable drugs. The main disadvantages with the former system stemmed from the fact that it was not possible to obtain product patent protection for pharmaceutical products before 1 January 1995 in Finland. Consequently, the innovative pharmaceutical products currently sold in Finland are still protected only by process patents. The former provisions on generic substitution combined with the former data exclusivity period of six years enabled generics to be launched on the Finnish market earlier than in most other Member States. The aim of the limitations to generic substitution is to ensure a reasonable grace period for process patent protected pharmaceuticals before opening the market to competition by generics.

The second part of the Medicines Act reform (HE 107/2005) was ratified on 13 January 2006 and the limitations to the generic substitution will enter into force on 1 February 2006. According to the new provisions, NAM shall remove certain patent protected products and their generic substitutes from the list of interchangeable drugs at the request of the holder of the marketing authorization. The request may be made in cases where the active ingredient of a pharmaceutical product is protected by a Finnish process patent that has been applied for before 1 January 1995, provided that the patent granted is based on the novelty of the product in question (analogous patents), or alternatively, if the pharmaceutical product is protected in Finland by a Supplementary Protection Certificate (SPC) granted on the basis of such process patent. The same active ingredient must also be protected by a product patent or a SPC in at least five other EEA Member States. Marketing authorization holders wishing to exercise their right to limit generic substitution shall within a fixed time limit provide NAM with their request to not have certain products included on the list of interchangeable drugs, and enclose an affidavit by a registered Finnish Patent Attorney certifying the validity of the patents in question.

The above limitations to generic substitution will not affect the interchangeability of parallel imported products.

The other new amendments to the Medicines Act concern new pricing regulations for pharmacy level wholesale prices. Pharmaceutical companies are no longer permitted to grant discounts to individual pharmacies. The price shall be the same to all pharmacies and is calculated in accordance with a fixed equation.

The final amendment deregulates nicotine replacement therapy products and permits such products to be sold in retail stores, kiosks and gas stations, if certain conditions are met. Furthermore, the pricing of nicotine products will no longer be controlled by the authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.