[Ip-health] Who is responsible for damages resulting from the governmental price cut by generic entry?

Heesob Nam hurips at gmail.com
Wed Aug 14 04:11:28 PDT 2019

I'm looking for those who join a written submission to the Korean
Supreme Court. I believe if the Supreme Court upholds the Patent Court
decision explained below, no generics will enter until all of the
patent matters are completely cleared by the highest court.

We have two conflicting court decisions.

Last year (8 February 2018), the Korean Patent Court held that the
generic company was liable for all of the lost profit of Lilly Korea
(an exclusive licensee of a patent on Olanzapine of Eli Lilly). The
lost profit, according to the Patent Court, includes the loss caused
by the price cut that the government carried out under the National
Heath Insurance system when generic products entered into the market
after a court decision invalidating the Olanzapine patent.

Later the invalidation decision was reversed by the Supreme Court, and
the Lilly Korea brought a suit against two generic companies: Hanmi
Pharmaceutical, and Myung-In Pharmaceuticals.

In Myung-In case, the Patent Court ruled in favor of Lilly Korea and
found that generic was liable for damages resulting from a price cut
of patented medicine (according to the National Health Insurance
system, the government may cut the patented drug price by 20% when
generic enters). This is the case, according to the Patent Court, even
when the generic company trusts a court decision finding a patent
invalid (in this case the decision was rendered by the same court, the
Patent Court).

Yet, in Hanmi case, the Seoul High Court found no liability of lost
profit due to the price cut which was carried out by the government
according to regulations.

Now both cases are pending in the Supreme Court and PhRMA already
filed a written submission to the Court arguing that the ruling of the
Patent Court should be upheld.

Please contact me if you are interested in my planned written submission.

Heesob Nam, PhD

Representative, Knowledge Commune
Director, Commons Foundation
T: +82 (0)2 796 1839
M: +82 (0)10 3925 2797
hurips at gmail.com, heesobnam at commons.foundation

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