How to Bridge the Knowledge Gap
The off-patent/generic sector of the $50 billion agrochemical crop protection industry has been growing in relative terms and now represents 65% to 70%. However, much of this is still controlled by the inventor companies, and this control is achieved primarily via a plethora of mixture products, expensive registration systems (with data protection issues) and product branding.
With the agrochemical industry forecast to continue its strong growth rate fuelled by an increasing population and markets such as Russia, Ukraine, China and Brazil posting double-digit growth, the available market for non-inventor companies is set to rise substantially. This article will examine areas where non-inventor companies need to improve their knowledge base in order to capitalize on this ever-improving market scenario.
There are basically two types of non-inventor companies:
■ Marketing companies – these tend to be national or regional based, they invest in registrations, purchase active ingredients or formulated finished products and sell into the local distribution network. They are driven by distributor companies requiring alternative sources to the inventor company (market-led).
■ Manufacturing companies – these tend to be based in India and China, sell active ingredient or formulated products to marketing companies and seek to develop new off-patent active ingredients (AIs) based on their existing chemistry/technology skills (therefore are technology-driven rather than market-led).
These two types of companies approach product development opportunities from different angles and with different skill sets. Diagram 1 looks at the total process of getting a generic to market and identifies the “knowledge gap” that exists between the two types of company. Both lack in-depth knowledge of the others’ activities which potentially leads to disjointed product development and poor relationships.
The “knowledge gap” encompasses many different complex areas requiring expertise in, for example, patents, patent term extensions, registration requirements, data protection, process chemistry, impurity profiles and analytical chemistry, and quality control of active ingredient and/or finished product.
The first step in any product development is to identify the product or active ingredient and both marketing and manufacturing companies do this but from different perspectives – the marketing company is market-led whereas the manufacturing company is technology-driven. Identifying the active ingredient to develop is in itself a complex process as there are many ais to choose from.
Since 2000 Enigma Marketing Research has published a series of seven reports titled “New off-patent/generic agrochemicals”, these reports have identified and profiled more than 160 major commercial active ingredients soon to loose basic patent protection.
In addition to the basic patent which protects the molecule per se, innovator companies build up a portfolio of patents to try and protect the market when the basic active ingredient patent expires – it is essential therefore that the generic manufacturer checks if there may be other patents covering:
■ novel formulations
■ synergistic mixtures of active
■ methods of manufacture
■ key intermediates
■ resolution of a racemic mixture to
the optically active isomer
Many mixture patents have been granted in the last 10 to 15 years and in addition to the technical benefits of mixture products commercial benefits also result. For example:
- Mixtures segment the market, creating a greater number of branded products and making it harder for generics to take market share.
- Use of patent-protected active ingredients restricts market entry by generics – if one of the mixture active ingredients is patent protected, generic companies will not have access to this active ingredient and therefore cannot enter this segment of the market until all intellectual property rights have lapsed.
Many mixture products have received patent protection in their own right resulting in extended patent rights beyond the expiry of the active ingredient.
It is essential that the market is analyzed in detail, and the ratio between mixture products and straight formulations is determined as the following example of prothioconazole clearly shows.
Prothioconazole is a triazolinthione fungicide discovered and developed by Bayer CropScience for use as a foliar spray on cereals (wheat, barley and rye), canola/oilseed rape, peanuts, pulses, soybeans, rice, sugar beet and field grown vegetables (trade name Proline). It is also used as a seed treatment (trade names: Redigo, Lamardor, Raxil and Proceed).
It was first launched in 2005 and by 2014, prothioconazole was marketed in many countries, including: Argentina, Australia, Austria, Belgium, Belarus, Brazil, Bulgaria, Canada, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, New Zealand, Poland, Romania, Russia, Saudi Arabia, Slovakia, Slovenia, Sweden, Turkey, Ukraine, UK and US.
The European market is particularly important and prothioconazole is mixed with many other actives including:
■ bixafen + fluoxastrobin
■ bixafen + spiroxamine
■ bixafen + tebuconazole
■ fluopyram + tebuconazole
■ triadimenol + triazoxide
A number of patents exist to these mixtures and Supplementary Protection Certificates (SPCs) have been granted extending market protection to well beyond the expiry of the active ingredient patent. Diagram 2 shows the SPC expiry date time line for prothioconazole and mixtures. The basic patent for the ai expires in 2015 but SPCs extend this to 2018. In addition, 11 mixture products also have additional patent and SPC protection extending market exclusivity between 2019 and 2026.
Bayer submitted an application in 2002 for the EU review system for New Active Substances under Dir 91 /414/EEC. Dossier was declared complete in 2003 and prothioconazole gained Annex I approval from Aug. 1, 2008, resulting in a data protection period of 10 years from this date.
Intellectual Property Rights (IPR) is a very complicated area, is constantly changing and requires expert advice in order for non-inventor companies to understand where the opportunities might lie. With such a strong patent and data protection position in Europe it may well be more profitable in the short term to concentrate on non-EU markets such as Argentina, Australia, Brazil, Canada, New Zealand, Russia, Saudi Arabia, Turkey, Ukraine and U.S.
It is essential that marketing and manufacturing companies understand each other better, pool resources and develop opportunities jointly. Forums such as FCI Trade Summits bring together both parties with the goal of bridging the Knowledge Gap.