The Strategic Importance and Future of IP and the Law in the Pharmaceutical and Medical Device Sector
Interview with Bengü Halavut Yildirim, Partner and Head of Intellectual Property Rights (Lifesciences and Pharmaceutical Industries)
W – Could you please tell us about yourself and professional background?
B.H.Y. – I am Bengü Halavut Yıldırım. I am 43 years old, and the mother of a 7-year-old child. My husband is a doctor. After graduating from Marmara University Faculty of Law, doing pioneering studies in the field of Intellectual Industrial Rights, and interning at BTS Partners in the now changed and advanced form of Türkekul Law Firm, I studied high-level business and legal English at the University of Berkeley. After I returned to Turkey, I consulted international firms in regulated areas such as oil, tobacco and the alcohol sector, companies operating in the food sector as well as foreign investors who wanted to invest in Turkey in various areas such as corporate law, mergers and acquisitions, labour law, advertising law, commercial law, dispute resolution and Intellectual Industrial Rights, and the compliance with regulations. I have also been an active litigation lawyer in the courts for many of our clients. In 2008, I started to work as Chief Legal Counsel at Bayer. I was Law, Patents, Compliance and Data Privacy Head for 12 years and a member of the Board of Directors for 5 years. At my last role at Bayer, I was in charge of Bayer Entities in Turkey and Iran Country Group. After joining BTS&Partners as a Partner in November 2020, I am currently in charge of intellectual property and the Health and Life Sciences sector. But of course, my duties are not limited to these sectors.
W – What are the main legal services BTS&Partners provide?
B.H.Y. – BTS&Partners is one of the leading Data Privacy and Technology Law offices in Turkey. In addition to technology law, it provides legal services to leading domestic and foreign companies in many sectors such as Corporate and M&A; Employment, Personal Data Protection, Competition, Tax, and Investment.
W – Your services are of strategic importance in pharmaceutical companies and other related companies. Can you explain this to us by providing examples in order to give us a better understanding?
B.H.Y.- As you know, the pharmaceutical and medical device industry develops, manufactures and markets pharmaceuticals and medical devices licensed for use in medical treatment. In many aspects, pharmaceuticals and medical devices have their special characteristics, which are subject to many laws, regulations and legislation regarding their patenting, licensing, testing and the marketing of medicines. As the primary purpose of pharmaceutical industry is public service and public health, the sector takes its job very seriously, as it is regulated by relevant institutions as an internationally regulated sector as well as binding itself to many strict ethical rules and conditions. When it comes to public health, every decision taken in pharmaceutical and medical device companies can be vital both for patients, public health, the company and therefore for the country itself. While trying to make decisions with this level of sensitivity, it is necessary to follow and adapt to the legislation that often changes in the face of developing conditions. For this reason, legal advice and solution support to our clients in this sector and to our clients who have work related to the sector is of strategic importance.
For example, BTS&Partners serves as one of the leading law firms in the field of Personal Data Protection and is a law firm that has active memberships and therefore consultancy in health and life sciences committees in some associations by blending technology law and expertise with sectoral knowledge in the life sciences sector. To give an example of this specifically, aside from the question of how consent statements are to be obtained from members of the Health Profession by pharmaceutical and medical device companies during this pandemic period, companies often confuse consent statements based on different legislations and obtained in different ways within the scope of E-Commerce Law, within the scope of Personal Data Protection due to intricate regulations within the scope of Ministry of Health regulations.
BTS&Partners not only gives an understandable and clear view of what legislation, which consents should be collected, but also provide legally complied, time-effective and cost-effective, industry-based solutions when giving an opinion on issues that require industry knowledge and are also very sensitive, especially in the pharmaceutical and medical device sector, while also providing industry-based solutions that are applicable and low-cost during the pandemic period. To provide another example, while some regulations in the legislation are insufficient due to both our new life and working style brought by the pandemic period and the technological developments brought by our age, it is not always possible for everyone to follow every rapidly advancing development in technology. BTS&Partners who is at the intersections in the health sector with its vast experience and knowledge in technology law, thus can provide both expertise and leadership. To provide another example, while examining the legality of a brand new and state-of-the-art software to be used in Clinical Research in terms of Personal Data Protection, BTS&Partners can provide legal solutions that can be brought technologically in light of the current discussions in the sector and guide the overall literature. I can keep delivering more examples like this, of course.
W – Can you explain more about patent issues of special importance?
B.H.Y – Unlike other industries, the invention and development of pharmaceutical pharmaceuticals is an extremely expensive and long-lasting activity. The process of releasing a new pharmaceutical pharmaceutical product from the research laboratory to the pharmacy shelf or hospital, takes an average of 12 to 15 years. Of every 5,000 molecules tested, only 250 promising new substances will undergo preclinical testing; 10 will enter the clinical development phase and only 1 will enter the market by being licensed by regulators. Half of the pharmaceutical phramaceuticals that reach the final stage of clinical trial are stuck in the clinical research process, and only 3 out of 10 pharmaceutical pharmaceutical s entering the market by passing this stage meet or generate income above average R&D expenditures, before losing patent protection and facing stiff generic competition.
When the costs of these failed pharmaceutical pharmaceuticals are taken into account, the cost of developing a successful new pharmaceutical product (excluding marketing-related expenses) is estimated at approximately USD 1 Billion or more.
However, given that it takes about 12-15 years for a patent-pending molecule to be converted into a marketable pharmaceutical product, the actual period of patent protection is reduced to 5-8 years.
Due to these significant and large investments, patent protection on the pharmaceutical product should be affective in this short term so that these investments pay off for companies and researchers and in this way new studies are carried out on new pharmaceutical products for public health. Ultimately, patent protection returns act as a service to public health that concerns everyone, through pharmaceutical companies.
W – Biotechnology is developing at a fast rate and many companies are making significant investments in this field. What is the importance of securing the work carried out? Can you give suggestions to companies in this regard?
B.H.Y. – As you may know, biotechnology in the field of pharmaceuticals is important in developing many innovative techniques for diagnosing, treating and preventing diseases. The significance of biotechnology was well displayed during the COVID-19 pandemic, and we have saw the importance of investing in biological technology through our experiences. In order to prevent this epidemic and similar incidents that we may encounter from now on, we need to do very important research in this field of technology. Now we see that not only pharmaceutical companies but also countries have brought the field of biological technology to the forefront and concentrated their investments in this field in order to better protect public health as soon as possible and to prevent similar situations from happening again.
What we have said about the protection of patent rights as a good example for this particular topic. Pursuant to the Article 85 of the Law on Industrial Property (“Law”), “It is intended to protect all commercial interest during the protection period, in order to ensure that the patent and utility model owner is compensated for the work and expenditures he has done to realise the intention…”. Pharmaceutical companies serving public health are also of course, commercial companies. In order to invest, this investment needs to be repaid. At this point, patent protection is a legal protection that prevents commercial rights losses for at least a certain period of time and pays off the investment.
While pharmaceutical patenting is a very niche legal field, patent protection of biotechnological products in the pharmaceutical field is an even more specific issue. According to Article 82 of the Law, patentable inventions and exceptions to patentability are determined, and discoveries are listed as exceptions that cannot be patented. Since biotechnological products in the field of medicine are technologies used to develop plants, animals and microorganisms with the help of different branches of science and DNA technology to obtain new rare substances (products) that do not exist naturally or cannot be produced as much as we need, some of the inventions on them cannot be patented as they can be considered discoveries, and some can be classified as inventions with processes other than discovery and can be protected with patent rights. For example, in a decision the Supreme Court ruled that it would not be possible to patent an existing gene in the human body for a biotechnological product that is the subject of a pattern case, however, the method of using the discovered gene in a diagnosis and treatment of a particular disease can be patented by isolating it in its natural environment and explaining its technical effect, provided that certain conditions are met. As displayed, there are thin lines in this area.
Our humble advice for individuals or companies that do the R&D and produce innovative pharmaceuticals would be to apply to specialist law firms to protect industrial property rights and therefore commercial returns of these products in Turkey if they are foreigners and to protect them in many countries around the world if they are Turkish.
W – The importance of the medical device field has increased with the pandemic; can you share your services to this field?
B.H.Y. – When you say medical device, the first thing that comes to mind is a machine device. However, in accordance with the legislation of the Ministry of Health, a medical device finds a very wide range of licensing areas, from the mask that everyone has to use during the pandemic period to some of the creams that we apply to our body. Of course, it’s very important what class a product is licensed in. On the other hand, in the licensing of medical devices, if the device is imported, the license class abroad is of great importance, as the Ministry of Health mostly relies on the license class abroad in the licensing of the product. The class in which a product will be licensed is of high importance as it will determine which legislation it will be subject to. Many issues, such as whether the relevant product can be advertised, whether its online sale is permitted or whether it is subject to other regulatory restrictions may depend on the license class of a relevant product. For example, while there are different restrictions in the pharmaceutical category, products classified as food supplements or cosmetics are subject to more flexible regulations compared to human pharmaceutical products.
To give a more specific example, the masks used during the pandemic period seem to be ordinary products that can differ from simple, as a home material, or bought in grocery store, but it is a product subject to many regulations because it is a medical device class. There are many regulations and obligations imposed by this legislation that the mask is subject to and must be followed until it goes from the manufacturer to the shelves in grocery stores or pharmacies. Many issues such as CE marking, obtaining authorization to become a medical device sales centre, exceptional medical devices that can be sold in places without sales centre authorization, advertising and promotional separation of medical devices, online sales and permits are regulated in detail with the relevant legislation. Some issues are regulated with new legislations as a mandatory result of this pandemic period, which we experienced for the first time. For example, even the Regulation on The Amendment of the Regulation on Medical Device Sales, Advertising and Promotion (“Regulation”), which was published in the Official Gazette on September 2, 2020, has found very different reflections in the sector and brought many controversies. The regulation contains provisions and amendments, especially regarding online advertising and sales. Since promotional activities are allowed and advertising practices are removed from the scope of the regulation; uncertainties have occurred in the sector about what activities correspond to the definitions and descriptions of “information”, “promotion” and “advertising”, and therefore which activities are permitted under the Regulation. Apart from these uncertainties triggered by the Regulation regarding implementation, allowing online sales if the conditions stipulated in the Regulation and other legislation are met is a development, which is welcomed by the sector. However, it is believed by the industry that a more flexible regulation is needed for online sales.
Long story short, we at BTS&Partners not only follow and report on these regulatory changes for our clients, but we can also provide sectoral information to our clients who do not know this sector at all but want to enter the market or need counselling related to online sales and draw strategies in light of the risk analyses we make to our clients within the framework of the question marks that occur. If some of our clients have just entered the sector, we even create the questions ourselves that need to be answered and prepare their answers. For our clients who already exist in the sector, we guide them in resolving their problems by offering different and practical, applicable solutions and options as much as possible in the light of sectoral follow-up and law.
W – What should be done in the field of health and pharmaceuticals within the scope of Personal Data Protection Law? Can you briefly mention BTS&Partners’ position in this area?
B.H.Y. – In this sector, it is critical that data is processed in a purposeful manner while maintaining a high level of confidentiality. As a matter of fact, in the coming period, the importance and availability of data in the development of advanced technologies to be used in diagnosis and treatment will become increasingly inevitable. It is now understood how necessary various technologies, especially artificial intelligence and machine learning, are in terms of progress. Therefore, in order for Turkey to support such innovative technologies and not to lag behind developments beneficial to individual and public health both on a country-by-country basis and internationally, the restrictions to be applied in the processing of health data should be kept at a purposeful and reasonable level.
On the other hand, GPDR and the Personal Data Protection Law (“Law”) differ mainly in the context of the conditions for the processing of personal data of special nature. Unlike the GDPR, the Law stipulates a very strict regime for the processing of personal data of special nature. In particular, the fact that personal data related to health and sexual life can only be processed by persons or authorized institutions and organizations under the confidentiality obligation for the purpose of protecting public health, carrying out preventive medicine, medical diagnosis, treatment and care services, planning and management of health services and financing, draws a very narrow framework for data controllers in terms of processing such data. This narrow framework creates obstacles to the execution of R&D efforts, which are necessary for some studies and innovations that constitute a grey area in the field of medicine and prevent the flow of data, to enable the use of advanced possibilities of technology in diagnosis and treatment, especially in the health sector, and to detect and update the side effects of medicines. As a matter of fact, this narrow framework causes a lockdown in practice on issues such as the introduction of new medical solutions, situations requiring urgent intervention, social security and occupational health. Therefore, it is necessary to increase the field of action, to meet the existing needs, to carry out business activities, and to expand the areas where data can be processed without the explicit consent of the data subjects in some areas where the processing of private personal data is critical due to requirements such as public interest and general health. Within this framework, the structure of Article 9 of the GDPR should be adopted and the scope of conditions on data processing should be expanded, provided that the necessary measures are taken, especially in terms of pharmacological studies and other diagnostics and treatments. This way while ensuring superior protection of data, opportunities will be benefited, especially in the field of medicine, and the development of the health sector will benefit.
W – When we look at the previous issues, has there been an adequate awareness about the legal issues that will affect health enterprises and the pharmaceutical sector in Turkey?
B.H.Y. – Within the framework of the issues we have just mentioned, we can say that there is a more conscious approach in health organizations and the pharmaceutical sector than before – but there are still miles to go. Since headquarters of foreign institutions and organizations in our country is usually in Europe or America, legal awareness is much higher in matters such as Intellectual Property, i.e., trademark, patent, industrial designs, useful models, copyrights, etc. Our wish is that Turkish institutions and organizations not only reach the same level of awareness on such issues, but also prioritize these issues and make them a part of their corporate life. Personal data, which is sensitive in the process of converting information to value and how it is used, is increasingly at the top of the agenda. Likewise, industrial property rights, which are in a strategic position in the conversion of knowledge to value, are one of the important tools of international competition. As I mentioned earlier, we have seen and still experiencing this more clearly during the pandemic period. According to the World Intellectual Property Organization data, Turkey ranks 14th in the world in domestic patent applications, 8th in trademark applications and 5th in design applications. Why shouldn’t Turkey, which has a very high potential, be at the forefront of this competition?
W – The innovation is highly significant in the global world. What is your legal advice to researchers with both individual and corporate studies?
B.H.Y. – Industrial property rights, are intangible rights that enable the registration of inventions, innovations, new designs and original works in industry and agriculture on behalf of the first implementers of new designs and original works, or on behalf of the owners of signs that will distinguish the manufacturer or seller of goods produced and sold in the field of commerce, and prevent the production and sale of these rights by third parties without the permission of the owners for a certain period of time.
Therefore, increasing the awareness and knowledge level of industrial property throughout the country and contributing to the transformation of industrial property into economic benefit are some of the objectives of our Turkish Patent and Trademark Authority’s 2019-2023 Strategic Plans. Our priority is to ensure that these inventions are protected from a legal point of view, whether individually or institutionally, to those who made R&D works and/or to distinguish their goods produced and sold. Trademark and Patent protection issues present some difficulties, both in terms of procedure and in terms of application. In particular, the patent for pharmaceuticals has some unique features in its own right.
For example, patent in pharmaceuticals can be listed under in 7 different patent types such as Compound Patent, Salt, Hydrate and Polymorph Patent, Formulation Patent, Combination Patent, Usage/Indication Patent, Procedural Patent, and Dosage Patent. Inventions or patents other than compound patents do not prevent generics from entering the market; for this reason, it is argued that other patents do not provide absolute protection. However, patents under these types are no less valuable to patent legislation than compound patents. As you can see, even pharmaceutical patenting is a separate field of law on its own. For this reason, our advice to those who have individual or corporate inventions, will be to consult with expert lawyers in this field.
W – Can we learn your close-term plans?
B.H.Y. – As you know, currently the subject and studies of digital technology and artificial intelligence (“AI”) are progressing rapidly. These days, we are talking about the human trials of Neuralink chips placed in the brain, the transfer of personal data in digital systems developed for Clinical Research, cryptocurrency trademarks, the patent rights relationship of pharmaceutical-producing artificial intelligence, and whether AI, which has been dubbed the FDA’s “breakthrough device” in the United States, will have copyright to AI that will establish a direct connection between man and computer and are placed in the brain. Nothing is as simple and straightforward as before. The law naturally has to keep up with this era and constantly change and evolve.
BTS&Partners is an AI-focused organization, in addition to following technological developments day-to-day in all these areas. We are a law firm that is directly at the centre of these developments with its client portfolio, adapting its legal opinions and solutions to the need and even creating pioneering opinions, we do not only advise its clients in the questions they ask, but also in the development of business strategy. We will continue to be comrades with sectoral solutions that keep up with the times.