Four-Billion Dollar Worth Pesticides to Come off Patent in 5 Years

Date:03-12-2015

The global agrochemical market value of 2013 reached $60.69 billion (manufacturer level), which is 10% up year on year. With the significant decrease of new pesticide active ingredient launched over last decade and while the large number of pesticides are coming offpatent, the sales proportion of proprietary patented pesticides has continued to drop. At present the market value of proprietary patented pesticides, proprietary offpatent pesticides and generic pesticides respectively accounts for 25%, 30% and 45% of the total market value. Proprietary off-patent product refers to product whose patented active ingredient expires but the terminal formulated product is still protected due to its patented technology, GM crop-affiliated nature or active ingredient-associated mixture, which means out of the agrochemicals sales of $60.7 billion, in 2014 a market value of $45.5 billion exists with proprietary off-patent pesticides and generic pesticides. This provides non-research oriented pesticide enterprises with great opportunities and market potentials.

According to statistical figures, 28 kinds of pesticide active ingredient will come off patent in the coming 5 years starting from 2015 to 2019 including 10 kinds of herbicides, 12 fungicides, 5 insecticides and 1 safener. The statistics show that the global market value of the 26 out of 28 products (except thiencarbazone and cyprosulfamide) which are going to come off patent in the 5 coming years reached $4.28 billion in 2013, accounting for around 7% of the world total agrochemical market value. Out of the 26 products, 10 of them reached annual sales of above $100 million, 10 of them reached sales of above $10 million and 6 of them reached sales of above $1 million. From patent owners’ perspective, 9 products of Bayer CropScience are going to come off patent allowing for a total market value of $1.57 billion, followed by BASF with 3
products to come off patent ($1.09 billion); Sumitomo has got 3 products to come off patent ($18 million); Syngenta has 2 products to come off patent ($785 million).

Analysis of Key Products

Among the to-be off-patent products, 4 products reached sales of $400 million in 2013, which are pinoxaden ($400 million), pyraclostrobin ($930 million), prothioconazole ($750 million) and flubendiamide ($445 million). These products are the competitive products of multinational companies, other industry players are watching carefully their patent status. For this reason, we have conducted a brief analysis of the market status of the 4 products.

Pinoxaden is a post-emergence herbicide developed by Syngenta, mainly used for barley and wheat, its mixtures include cloquintocet-mexyl, florasulam and fluroxypyr. With annual sales of $400 million, pinoxaden ranked around No.10 in the list of best selling herbicides globally. Axial (cloquintocetmexyl + pinoxaden) is Syngenta’s bestselling selective herbicide. Following its first-time registration and sales in 2005, so far pinoxaden has been registered and launched to market in more than 30 countries. The basic patent of pinoxaden is going to expire in the US and Europe in 2019.

Pyraclostrobin is a broad-spectrum strobilurin fungicide developed by BASF, mainly used for soybean, cereal, corn, fruit and vegetable, also used for seed treatment. Its mixture products include fluxapyroxad, triticonazole, epoxiconazole and boscalid. Pyraclostrobin is the world No.2 best selling fungicide, being registered for the first time in 2001 and launched to market soon after registration. So far the product has been registered and commercialized in more than 40 countries. The basic patent of the active ingredient of pyraclostrobin is going to expire in Europe in June 2015.

Prothioconazole is a triazolinthione fungicide developed by Bayer CropScience, mainly used for cereal, rapeseed, soybean, rice and field vegetable foliage spray, also used for seed treatment. Its mixtures include trifloxystrobin, propiconazole, tebuconazole and fluoxastrobin. The global sales of prothioconazole in 2013 reached $750 million, ranking No.4 among the global best selling fungicides.

Prothioconazole was registered for the first time in Germany and UK in 2004, then released to market in Germany and Netherlands in 2005. So far it has been registered in more than 40 countries; its basic patent is going to expire in the US and Europe in November 2015.

Flubendiamide is an amide foliar insecticide discovered by Nihon Nohyaku in 1998, which was developed successfully in collaboration with Bayer CropScience in 2001 with registration and marketing
being conducted by Bayer CropScience. Flubendiamide is the world top 10 sales insecticide, mainly used for vegetable, fruit, cotton, rice and soybean. Its mixtures include spirotetramat, buprofezin and thiacloprid. Flubendiamide was registered for the first time in 2007; its basic patent of active ingredient is going to expire in 2019.

Protective measures of  to be off-patent product

To-be off-patent pesticide is a focus of attention to many companies. However after a pesticide compound comes off patent, an extended patent protection period may be obtained according to local law. Also patent for technology, mixtureand data protection are still blockages to other companies for registration and sales of off-patent product. Therefore before a product is intended for development it is necessary to fully understand its protective measures in place. Here is an analysis of the measures of the patent holder to keep out competition and extend the product life for off-patent pesticide active ingredient.

Supplementary Protection Certificates (SPC)

SPC is an extended patent protection system put in effect by EU in 1993 to compensate the pesticide patentee for the patent protection period lost in an administrative licensing application in order to support the return of the research investment and maximize the profit of pesticide developer. Before the basic patent of a pesticide expires, patentee is entitled to apply for a SPC coverage to obtain an additional no-less than 5-year’s patent protection period. The above Table 1 shows that majority of the 28 products which are going to come off patent in the coming 5 years are covered by the extended SPC protection.

Extended Mixture Patent Protection

Besides the protection of the basic patent of active ingredient, upon a product coming off patent it is usual to mix the said product with other product to extend the protection period. According to rules, an active ingredient of mixture product covered by patent protection decides that its mixture product is also covered by patent protection. Furthermore together with the extended SPC in place, the patent of the said product is thus extended for longer years. This is a tactics used by multinational companies to continue their capture of market via mixture products even after coming off patent, as a blockage to the competition from generic companies.

Data Protection

Data protection is another way to contain competition from generic product. There is a 10-year long data protection period in Europe, but because of the time delay between the first-time provisional approval and the full registration, the data protection period can be even longer than the protection period of basic patent, which needs to be taken into special considerations by companies who want to develop off-patent pesticide.

The global agrochemical market value of 2013 reached $60.69 billion (manufacturer level), which is 10% up year on year. With the significant decrease of new pesticide active ingredient launched over last decade and while the large number of pesticides are coming offpatent, the sales proportion of proprietary patented pesticides has continued to drop. At present the market value of proprietary patented pesticides, proprietary offpatent pesticides and generic pesticides respectively accounts for 25%, 30% and 45% of the total market value. Proprietary off-patent product refers to product whose patented active ingredient expires but the terminal formulated product is still protected due to its patented technology, GM crop-affiliated nature or active ingredient-associated mixture, which means out of the agrochemicals sales of $60.7 billion, in 2014 a market value of $45.5 billion exists with proprietary off-patent pesticides and generic pesticides. This provides non-research oriented pesticide enterprises with great opportunities and market potentials.

According to statistical figures, 28 kinds of pesticide active ingredient will come off patent in the coming 5 years starting from 2015 to 2019 including 10 kinds of herbicides, 12 fungicides, 5 insecticides and 1 safener. The statistics show that the global market value of the 26 out of 28 products (except thiencarbazone and cyprosulfamide) which are going to come off patent in the 5 coming years reached $4.28 billion in 2013, accounting for around 7% of the world total agrochemical market value. Out of the 26 products, 10 of them reached annual sales of above $100 million, 10 of them reached sales of above $10 million and 6 of them reached sales of above $1 million. From patent owners’ perspective, 9 products of Bayer CropScience are going to come off patent allowing for a total market value of $1.57 billion, followed by BASF with 3 products to come off patent ($1.09 billion); Sumitomo has got 3 products to come off patent ($18 million); Syngenta has 2 products to come off patent ($785 million).

Analysis of Key Products

Among the to-be off-patent products, 4 products reached sales of $400 million in 2013, which are pinoxaden ($400 million), pyraclostrobin ($930 million), prothioconazole ($750 million) and flubendiamide ($445 million). These products are the competitive products of multinational companies, other industry players are watching carefully their patent status. For this reason, we have conducted a brief analysis of the market status of the 4 products.

Pinoxaden is a post-emergence herbicide developed by Syngenta, mainly used for barley and wheat, its mixtures include cloquintocet-mexyl, florasulam and fluroxypyr. With annual sales of $400 million, pinoxaden ranked around No.10 in the list of best selling herbicides globally. Axial (cloquintocetmexyl + pinoxaden) is Syngenta’s bestselling selective herbicide. Following its first-time registration and sales in 2005, so far pinoxaden has been registered and launched to market in more than 30 countries. The basic patent of pinoxaden is going to expire in the US and Europe in 2019.

Pyraclostrobin is a broad-spectrum strobilurin fungicide developed by BASF, mainly used for soybean, cereal, corn, fruit and vegetable, also used for seed treatment. Its mixture products include fluxapyroxad, triticonazole, epoxiconazole and boscalid. Pyraclostrobin is the world No.2 best selling fungicide, being registered for the first time in 2001 and launched to market soon after registration. So far the product has been registered and commercialized in more than 40 countries. The basic patent of the active ingredient of pyraclostrobin is going to
expire in Europe in June 2015.

Prothioconazole is a triazolinthione fungicide developed by Bayer CropScience, mainly used for cereal, rapeseed, soybean, rice and field vegetable foliage spray, also used for seed treatment. Its mixtures include trifloxystrobin, propiconazole, tebuconazole and fluoxastrobin. The global sales of prothioconazole in 2013 reached $750 million, ranking No.4 among the global best selling fungicides.

Prothioconazole was registered for the first time in Germany and UK in 2004, then released to market in Germany and Netherlands in 2005. So far it has been registered in more than 40 countries; its basic patent is going to expire in the US and Europe in November 2015.

Flubendiamide is an amide foliar insecticide discovered by Nihon Nohyaku in 1998, which was developed successfully in collaboration with Bayer CropScience in 2001 with registration and marketing being conducted by Bayer CropScience. Flubendiamide is the world top 10 sales insecticide, mainly used for vegetable, fruit, cotton, rice and soybean. Its mixtures include spirotetramat, buprofezin and thiacloprid. Flubendiamide was registered for the first time in 2007; its basic patent of active ingredient is going to expire in 2019.

Protective measures of  to be off-patent product

To-be off-patent pesticide is a focus of attention to many companies. However after a pesticide compound comes off patent, an extended patent protection period may be obtained according to local law. Also patent for technology, mixtureand data protection are still blockages to other companies for registration and sales of off-patent product. Therefore before a product is intended for development it is necessary to fully understand its protective measures in place. Here is an analysis of the measures of the patent holder to keep out competition and extend the product life for off-patent pesticide active ingredient.

Supplementary Protection Certificates (SPC)

SPC is an extended patent protection system put in effect by EU in 1993 to compensate the pesticide patentee for the patent protection period lost in an administrative licensing application in order to support the return of the research investment and maximize the profit of pesticide developer. Before the basic patent of a pesticide expires, patentee is entitled to apply for a SPC coverage to obtain an additional no-less than 5-year’s patent protection period. The above Table 1 shows that majority of the 28 products which are going to come off patent in the coming 5 years are covered by the extended SPC protection.

Extended Mixture Patent Protection

Besides the protection of the basic patent of active ingredient, upon a product coming off patent it is usual to mix the said product with other product to extend the protection period. According to rules, an active ingredient of mixture product covered by patent protection decides that its mixture product is also covered by patent protection. Furthermore together with the extended SPC in place, the patent of the said product is thus extended for longer years. This is a tactics used by multinational companies to continue their capture of market via mixture products even after coming off patent, as a blockage to the competition from generic companies.

Data Protection

Data protection is another way to contain competition from generic product. There is a 10-year long data protection period in Europe, but because of the time delay between the first-time provisional approval and the full registration, the data protection period can be even longer than the protection period of basic patent, which needs to be taken into special considerations by companies who want to develop off-patent pesticide.