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TABLE OF CONTENTS
EXECUTIVE SUMMARY
page 3
INTRODUCTION
page 4
METHODOLOGY
page 4
BODY
page
Evergreening..page 5
Types of Evergreening Strategies..page 5
Future Implications of Evergreening.page 9
Managerial
Implicationspage
CONCLUSION
page 11
REFERENCE
page 12
APPENDICES
page 14
10
INTRODUCTION
3
Patents can be defined as exclusive rights granted for the invention of a product or
process which provides a new approach to solving a problem. This protection usually lasts for
a period of 20 years, limited duration, to the owner of the invention which can be a person or
an organisation (WIPO, 2015). It is highly valued with the pharmaceutical companies as it
solidifies the protection of their blockbuster drug. Many pharmaceutical companies file for
patents on the existing patented-product before its initial patent expiration, this strategy of
extending the term of the patent of the products or innovative discoveries in order to maintain
market dominance, is called evergreening (Bansal, et al., 2009). It has been filing for
obtaining patents on the existing products with minor improvements or changes. Such a
protection gives them opportunity to have or retain market monopoly. With many aliases such
as stockpiling, layering, life-cycle management or line extension, it has been
observed as an abusive practice that hampers generic medications and adversely affects the
public (Thomas, 2009). Extending the given patent to maintain monopoly in production has
been termed as evergreening by experts. The notion of extending the patent for a given
products has led to prospects of effective analysis pertaining to the way forward. Thus, this
paper will evaluate the implications of evergreening on the pharmaceutical industry.
METHODOLOGY
This paper is based on secondary sources of research i.e. data analysed and reviewed
from other primary sources of data such as other research articles, documents and websites.
The information collected is then critically reviewed to our application of theoretical
frameworks in the aspects of global business and multinational enterprise in relation to the
evergreening process in the pharmaceutical industry in recent years.
Figure 1. Porters Five Forces that Shape Industry Competition (Porter, 2008)
Managerial implications
According to (Bansal, et al., 2009) an industry which is highly control centric, the
pricing and output decisions is highly influenced by fellow competitors or rivals. Hence,
businesses such as GlaxoSmithKline, maintain their pricing to the industry standard to ensure
profitability. Pharmaceutical companies operate in an oligopolistic market structure where
9
CONCLUSION
The notion of evergreening in the pharmaceutical sector has led to distinctive
outcomes for the organizations. As an aspect that denotes extension of the patents, it has led
to diverse outcomes for both the management and the organizations operating in the sector. It
is well known that in pharmaceutical industries sometimes bend the legal system to their own
benefit in order to get large profits. The reason for such behavior is that they seek to increase
shareholders return, especially through patents. Because of this fight for financial incentives,
companies will always try and come up with ways to protect their intellectual property rights
through many fields of innovation, such as technology or legal mechanisms. Hence,
10
11
Bansal, I. S., Sahu, D., Bakshi, G. & Singh, S., 2009. Evergreening - A Controversial Issue in
Pharma Milieu. Journal of Intellectual Property Rights, Volume 14, pp. 299-306.
Boscheck, R., 2015. Intellectual Property. [Online]
Available at: http://download.springer.com/static/pdf/884/art
%253A10.1007%252Fs10272-015-0546-y.pdf?originUrl=http%3A%2F
%2Flink.springer.com%2Farticle%2F10.1007%2Fs10272-015-0546y&token2=exp=1444785742~acl=%2Fstatic%2Fpdf%2F884%2Fart
%25253A10.1007%25252Fs10272-015-054
[Accessed 2015].
Federal Trade Commission, 2011. Authorized Generic Drugs: Short-Term Effects and LongTerm Impact. [Online]
Available at: https://www.ftc.gov/sites/default/files/documents/reports/authorizedgeneric-drugs-short-term-effects-and-long-term-impact-report-federal-tradecommission/authorized-generic-drugs-short-term-effects-and-long-term-impactreport-federal-trade-commission.pdf
[Accessed 2015].
Federal Trade Commission, 2015. Federal Trade Commission - Anticompetitive Practices.
[Online]
Available at: https://www.ftc.gov/enforcement/anticompetitive-practices
[Accessed 2015].
Granstrand, O. & Tietze, F., 2015. IP STRATEGIES AND POLICIES FOR AND AGAINST
EVERGREENING. [Online]
Available at:
http://www.ifm.eng.cam.ac.uk/uploads/Research/CTM/working_paper/2015-01Granstrand-Tietze.pdf
[Accessed 2015].
Midha, D. S., 2015. STRATEGIES FOR DRUG PATENT EVER-GREENING IN THE
PHARMACEUTICAL INDUSTRY. International Journal of Pharmaceutical
Sciences and Business Management, 3(3), pp. 11-24.
Porter, M. E., 2008. Harvard Business Review - The Five Competitive Forces That Shape
Strategy. [Online]
Available at: http://elibrary.kiu.ac.ug:8080/jspui/bitstream/1/510/1/Michael%20Porter
%20-%20The%20Five%20Competitive%20Forces%20that%20Shape
%20Strategy.pdf
[Accessed 2015].
Thomas, J. R., 2009. Congressional Research Service. [Online]
Available at: http://www.ipmall.info/hosted_resources/crs/R40917_091113.pdf
[Accessed 2015].
U.S. Food and Drug Administration, 2015. FDA - U.S. Food and Drug Administration.
[Online]
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APPENDICES
Appendix 1. The strategy-policy matrix for patent based evergreening (Granstrand &
Tietze, 2015).
Evergreening policies
For
Against
Injunctions
Delaying
licenses,
concessions,
Evergreening strategies
For
and
patent
fences
Compulsory licensing
Against
Invalidation
Invent around
14
Partnering
system, typically by
Abandon
Fragmentation
and
complementary
patenting
resources
Follow-on/
continuous
patenting
of
improvements,
of
and
sequential
product/process
features
and
entry
and
related
related complements
Aggregation
and
patenting
of
Sequential
patent
blanketing and
patent flooding
Grant-back licensing
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