All the Korean regulations and other legal documents cited or used as reference in this commentary were representing the most updated versions at the time of writing the initial draft of this commentary (December, 2004) unless noted otherwise. The article numbers were changed as the regulations underwent some minor modifications since then, but the legal requirements are still the same and effective as of May, 2018.

According to Articles 5.10 and 3.2.8 of the Regulation on the Safety and Efficacy Evaluation of New Drug in Korea (the ‘Regulation’ hereafter),[1] for any identical drug product to a product subject to New Drug Reexamination (‘Reexamination’ hereafter), approval can only be granted if and only if the sponsor has the safety and efficacy data, equivalent to or more than the original data, but not the same data as the original data submitted by the innovator company when the first approval was made. Exemption from this ‘equivalent-or-more-but-not-the-same-data’ requirement can be sought only when the innovator company grants other companies to use their data, but this is highly unlikely.

This exclusivity provision was introduced in 1995 when the then Bureau of Pharmaceutical Affairs and Policies, Ministry of Health and Welfare, in Korea, which later became first the Korea Food and Drug Administration (KFDA), and then the Ministry of Food and Drug Safety (MFDS), mandated reexamination or postmarketing surveillance for certain prescription drugs (e.g., new drug of new molecular entity) for 4 or 6 years. This was to meet the requests from the United States, European Union, and Japan to extend the patent for ‘pipeline’ products (i.e., drug applications pending at the time of the Patent Act was passed in Korea in July 1987).

Sibutramine hydrochloride is the active ingredient of Reductil®, which was approved for the treatment of obesity in July 2001 in Korea. Abbott Korea Limited (‘Abbott Korea’ hereafter) was the market holder of Reductil® and it was subject to Reexamination until July 2007. Hanmi Pharmaceutical Co., Limited (‘Hanmi’ hereafter) developed a new salt of sibutramine (i.e., sibutramine mesylate, Slimmer®) and submitted the results of the phase I and III clinical trials with Slimmer®, coupled with some nonclinical data, to KFDA in an attempt to get the drug approved. Their argument was that the exclusivity provision applies only to a product ‘identical’ to a reexamination product. In other words, Hanmi contended that sibutramine mesylate or Slimmer® is not identical to sibutramine hydrochloride or Reductil® by virtue of the different salt, so they were legally entitled to seeking an approval for it even before the examination period for Reductil® ended (i.e., July, 2007) pursuant to Article 7.6 of the Regulation (data exemption provision). This data exemption provision allows the sponsor to seek an approval for a new salt or isomer of an already approved drug by submitting abridged data only (i.e., the results of clinical studies).

Prompted by Hanmi's attempt to get their Slimmer® approved, Abbott Korea requested KFDA in July 2004 clarify the regulatory issues related to the approval of a new salt of a product subject to reexamination. Responding to Abbott Korea's request, on October 15, 2004, KFDA upheld Abbott Korea's position and made clear that a new salt of a reexamination drug could not be approved unless the sponsor submitted ‘equivalent-or-more-but-not-the-same-data’ on the safety and efficacy of the drug. Based on this, Hanmi's submission was rejected by KFDA. Since then, Hanmi had to wait until July 1, 2007 when the reexamination period for Abbott Korea's Reductil® ended to have KFDA approve Slimmer®.

In the meantime, KFDA asked Jung-Il Park, an attorney at law and legal consultant to KFDA, for comments on the approval issue of a different salt of sibutramine.[2] Interestingly, Park came to the totally opposite conclusion that sibutramine mesylate could be viewed as not identical to Reductil®, therefore fully qualified for review by KFDA to get the drug approved through Article 7.6 of the Regulation. Park went even further, contending Article 5.10 of the same regulation did not conform to generally accepted legal principles, and, therefore was susceptible to being nullified or even unconstitutional. Park argued that Article 5.10 of the Regulation limited the right to seek an approval, which must have been defined by or delegated from the upper level laws (i.e., the Pharmaceutical Act or equivalents).

The objective of this commentary was to investigate and discuss the regulatory issues regarding the case of Reductil® vs Slimmer®, particularly for data exclusivity, an important tool to protect intellectual property besides patent, which has been often not well recognized though. To this end, the author approached the issues, not only from the regulatory science perspective, but also from the legal points of view as long as and to the extent that they were related to the regulatory science issues.

From the regulatory science perspective, there were at least three discussion points in the case of Reductil® vs Slimmer®: misunderstanding the legal framework of approval for non-brand-name drugs (or innovator drugs), confusion about the differences between data exclusivity and patent as intellectual property right, and role of the data exclusivity provision in the Reexamination regulation in Korea. It is critical to focus on and streamline these regulatory issues because they could invariably reveal the original legal intention codified in Articles 5.10, 3.2.8, and 7.6 of the Regulation.

In the following sections, each of those regulatory issues was analyzed in detail, and a firm regulatory background was provided and discussed. References to the history of the US FDA and other regulatory agencies in the legal framework and philosophical background of non–brand-name drug approval were frequently made. Finally, the author discussed why Park's comments on the case of Reductil® vs. Slimmer® were not appropriate.

The Hatch-Waxman Act was an unprecedented attempt to achieve two seemingly contradictory objectives: making lower-cost generic copies of approved drugs more widely available, while granting extended patent protection to innovative drug developers to ensure adequate incentives to innovate.

As described in the previous section, manufacturers of generic drugs were required to independently prove the safety and efficacy of their products before the Hatch-Waxman Act was passed in 1984. They were prohibited from using the unpublished test results of the original innovator drug, which were considered trade secrets of its manufacturer. Therefore, the Hatch-Waxman Act streamlined the process for approving generic drugs by requiring only that manufacturers demonstrate bioequivalence to an already approved brand-name drug, simultaneously allowing the FDA to rely on the proprietary safety and efficacy data of a brand-name drug.

For balance, however, some incentives were necessary to compensate for the innovation brought by research-intensive drug manufacturers. Briefly, the Hatch-Waxman Act granted a period of additional marketing exclusivity to make up for the time that a patented pipeline drug had remained in development and was used for review by the regulatory agency. This extension of patented time was why the Hatch-Waxman Act was named the Patent Term ‘Restoration’ Act. This extension, however, could not exceed 5 years, and it could be additional to the 20 years originally granted by the first issuance of a patent.

Furthermore, the Hatch-Waxman Act granted a 5-year exclusivity for new molecular entities (i.e., new drugs whose active ingredient has never been approved under NDA). This exclusivity was implemented such that, once a new molecular entity was approved, a generic drug or version was not approved for 5 years from the date of approval. In other words, the exclusivity has provided the holder of an approved new drug application with ‘limited’ protection from new competition in the marketplace for the innovation represented by its approved drug product. This limited protection precludes approval of 505(b) (2) applications or generic drugs for prescribed periods. This exclusivity is referred as ‘data exclusivity’ because it, in effect, has prohibited FDA from relying on the safety and efficacy ‘data’ of an already approved innovator drug.

Why were both patent and data exclusivity necessary? To answer this question, it is important to understand the two different intellectual property rights for innovation: patent and data exclusivity. Patent is primarily based on a balance between the incentive to develop more innovative knowledge products in the future and highly restrictive powers to the knowledge owners at present.[8] These paradoxical objectives can be achieved by disclosing the contents for which a patent is sought, but allowing only the patent holder to use, explore, manufacture, and test the patented contents. In contrast, data exclusivity has a different purpose. It promises treating proprietary data as a trade secret for a limited period in exchange for requiring that pharmaceutical companies provide data on the safety and efficacy of a new drug. Patent does not protect the integrity and confidentiality of the proprietary data. Only data exclusivity can protect and safeguard the proprietary information included in the registration files against any type of unfair commercial use. However, data exclusivity is theoretically less restrictive than patent because it does not legally prevent other companies (e.g., generic companies or competitors) from generating their own proprietary data to get approval. Therefore, patent and data exclusivity must be viewed as two separate forms of intellectual property right. Both are necessary.

It is critically important to understand that data exclusivity has to be sufficiently enough to prohibit unfair commercial use by competitors via two-layer protection: nondisclosure and nonreliance. Nondisclosure is the government's responsibility not to allow any competitors to gain access to the proprietary safety and efficacy data of a brand-name drug. Nonreliance, although less obvious than nondisclosure, aims to prevent the regulatory agency from relying on or using the proprietary information of an innovator drug to compare, judge, extrapolate, and bridge the ‘limited’ safety and efficacy data or blood levels of a non–brand-name drug for approval.

Based on the limited information found in the public domain, Hanmi appeared to have completed phase 1 and 3 clinical trials of sibutramine mesylate and tried to submit the results of those two clinical studies along with a minimal amount of animal pharmacology and stability information on their product. In other words, the whole toxicology and major pharmacology data, proof-of-concept clinical data, dose-response data, and clinical pharmacology data (e.g., pharmacokinetics, special population, and drug–drug interaction) did not appear to be included in the registration package of sibutramine mesylate or Slimmer®.

The short list of the compiled data for sibutramine mesylate could be acceptable under the drug approval system in Korea in 2004. Certainly, Article 7.10 of the Regulation provided a path for the sponsor seeking an approval of a new salt of a non-reexamination drug to submit reduced data only. However, as repeatedly emphasized in the previous sections, the main approval mechanism for sibutramine mesylate was reliance on the proprietary data of Abbott Korea that should be protected against unfair commercial use by not only nondisclosure, but nonreliance, until the reexamination period of Reductil® ended in July, 2007.

Therefore, the main regulatory issue in the case of Reductil® vs Slimmer® was data exclusivity, specifically nonreliance, not how the term ‘identical drug product’ in Article 3.2.8 of the Regulation should be defined. In fact, the exclusivity provision collectively found in Articles 3.2.8 and 5.10 of the Regulation, summarized as the ‘equivalent-or-more-but-not-the-same-data’ requirement, was nothing but what codified data exclusivity and nonreliance that the data are protected against unfair commercial use by generic or non-brand-drug competitors. This requirement is clearly stipulated in Article 39.3 of the World Trade Organization's Agreement on Trade Related aspects of Intellectual Property rights (‘TRIPs’ hereafter) as follows:

This view is crucially important because Article 72.9 of the Pharmaceutical Affairs Act appeared to define data exclusivity as nondisclosure only. However, given the primary legal framework for the approval of non-brand-name drugs (i.e., reliance on the proprietary information of an innovator drug) and the fact that this information as trade secrets must be protected against unfair commercial disclosure or reliance, the data exclusivity provision found in the Regulation, in effect, should be viewed as averting the potential loophole of the regulatory agency's unlawful reliance to the proprietary safety and efficacy data owned by the innovator to approve a non-brand-name drug during the reexamination period.

Therefore, unlike some arguments that the data exclusivity provision in the Regulation provided unfair advantage for the innovator drug manufacturers, this provision has actually prevented the Korean Government from being retaliated by other World Trade Organization member states through, for example, the US ‘Super 301’ and the EU's Trade Barriers Regulation (EC 3286/94).

The period of data exclusivity (i.e., nonreliance) varies between different countries (Table 1).[9] For example, the United States gives 5 years of protection plus additional 3 years for the second indication (one time only), while the EU has adopted the ‘8+2+1’ formula, i.e., 8 years' data exclusivity, 2 years' marketing exclusivity, and an additional year for new indications of existing products. It is clear that the 6- or 4-years for data exclusivity through drug reexamination in Korea are not much different from the international standard.

The main points of Park's legal consult to KFDA could be summarized as follows[2]:

1) Hanmi's sibutramine mesylate is not identical to Abbott Korea's sibutramine hydrochloride. Therefore, it could be approved pursuant to Article 7.6 of the Regulation (i.e., the approval of a different salt or isomers of an already approved drug by submitting reduced amount of the safety and efficacy data) even before the reexamination period of Reductil® ended.

2) The data exemption provision in Article 7.6 of the Regulation should apply in the same manner both during and after Reexamination because its approval mechanism is to rely on the safety and efficacy data of a previously approved brand-name drug.

3) For the drug review, the regulatory agency could also refer to research papers including the safety and efficacy data different sponsors submitted.

4) The reexamination regulation in Korea is not to protect the exclusivity of brand-name drugs of research-intensive manufacturers that is not covered by the Patent Law.

5) Article 79.9 of the Pharmaceutical Affairs Act grants only data nondisclosure. Moreover, the review of a different salt of an already approved brand-name drug is necessary for the public benefit, so it does not violate the data protection provision of Article 79.9 of the Pharmaceutical Affairs Act.

6) Article 5.10 of the Regulation could be illegal or even unconstitutional because its ‘equivalent-or-more-but-not-the-same-data’ requirement provision, favoring research-intensive brand-name manufacturers, is not duly defined or properly delegated by the higher-level laws.

Of these comments, the last one—the possible unconstitutionality of Article of 5.10 of the Regulation—purely addressed the formality or hierarchy of different types of laws and regulations and their relationships. Therefore, this potential legal formality matter was not analyzed further in this commentary.

Park's comments showed that he did not fully understand the legal premise of non–brand-name drug approval (i.e., data reliance) and its ramifications in the protection of intellectual property rights, as codified in Articles 3.2.8 and 5.10 of the Regulation. For example, Park's second and third arguments were data exclusivity, and his fourth argument was also directly related to the role of the data exclusivity provision in the Reexamination regulation in Korea. These issues were already discussed in detail in the previous sections; thus, it is sufficient to comment that Park's arguments were lacking a serious understanding on the role of data exclusivity in the context of the Reexamination in Korea.

Then, what were the weaknesses found in Park's 1^st and 5^th arguments?

The ‘equivalent-or-more-but-not-the-same-data’ provision in the Regulation on the Safety and Efficacy Evaluation of New Drug in Korea has served as the de facto data exclusivity for any drug identical to a product subject to new drug reexamination in Korea. The legal debate that occurred between Abbott Korea and Hanmi in association with the approval of their sibutramine products, i.e., Reductil® vs. Slimmer®, showed how data exclusivity could play an important role to protect intellectual property of the innovator drug when incrementally modified drugs had to rely on the safety and efficacy data of the innovator drug for approval.

Abbott Korea voluntarily withdrew Reductil® from the market in Korea on January, 2012 after MFDS recommended the drug be withdrawn after consultation with a Central Pharmaceutical Affairs Council (October, 2010).[14] The voluntary withdrawal decision was also prompted by a similar recommendation made by the US FDA. However, Hanmi's Slimmer® had remained in the market until August 4, 2017, when MFDS mandated the drug product recertificate system in Korea, resulting in the loss of marketing authorization for Slimmer®.[15]