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Why MNC Pharma Still Moans Over Indian IP Ecosystem?

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Improving patient access to expensive drugs, paving the way for entry of their cheaper generic equivalents, post patent expiry, and avoiding evergreening, is assuming priority a priority focus area in many countries. The United States is no exception, in this area. The Keynote Address of Scott Gottlieb, Commissioner of Food and Drug at the 2018 Food and Drug Law Institute Annual Conference inWashington, DC by, on May 3, 2018, confirms this. Where, in sharp contrast with what the MNC Pharma players and their trade associations propagated, the US-FDA commissioner himself admitted by saying, “Let’s face it. Right now, we don’t have a truly free market when it comes to drug pricing, and in too many cases, that’s driving prices to unaffordable levels for some patients.”

Does US talk differently outside the country?

At least, it appears so to many. For example, in April 2018, the Office of the United States Trade Representative (USTR) released its 2018 Special 301 Report. In this exercise, the USPTO names the country’s trading partners for not adequately protecting and enforcing Intellectual Property (IP) rights or otherwise deny market access to U.S. innovators that rely on the protection of their IP rights.’ Accordingly, U.S. trading partners are asked to address IP-related challenges, with a special focus on the countries identified on the Watch List (WL) and Priority Watch List (PWL).

In 2018, just as the past years, India continues to feature, along with 11 other countries, on the PWL, for the so called longstanding challenges in its IP framework and lack of sufficient measurable improvements that have negatively affected U.S. right holders over the past year.

From Patient access to affordable drugs to Market access for Expensive Drugs: 

Curiously, the USTR Report highlights its concerns not just related to IP, but also on market access barriers for patented drugs and medical devices, irrespective of a country’s socioeconomic compulsion. Nevertheless, comparing it to what the US-FDA Commissioner articulated above, one gets an impression, while the US priority is improving patient access to affordable drugs for Americans, it changes to supporting MNC pharma to improve market access for expensive patented drugs, outside its shores.

Insisting others to improve global IP Index while the same for the US slides:

In the context of the 2018 report, the U.S. Trade Representative, reportedly said, “the ideas and creativity of American entrepreneurs’ fuel economic growth and employ millions of hardworking Americans.” However, on a closer look at the U.S. Chamber of Commerce’s annual Global IP Index for 2018, a contrasting fact surfaces, quite clearly. It shows, America, which once was at the very top of the overall IP Index score, is no longer so – in 2018, the world rank of the US in offering patent protection to innovators, dropped to 12thposition from its 10thglobal ranking in 2017. Does it mean, what the US is asking its trading partners to follow, it is unable to hold its own ground against similar parameters, any longer.

Should IP laws ignore country’s socioeconomic reality? 

MNC Pharma often articulated, it doesn’t generally fall within its areas of concern, and is the Government responsibility. However, an affirmative answer, echoes from many independent sources on this issue. No wonder, some astute and credible voices, such as an article titled “U.S. IP Policy Spins Out of Control in the 2018 Special 301 Report”, published by the Electronic Frontier Foundation on May 01, 2018, termed 2018 Special 301 Report – ‘A Tired, Repetitive Report.’ It reiterates in no ambiguous term: ‘The report maintains the line that there is only one adequate and effective level of IP protection and enforcement that every country should adhere to, regardless of its social and economic circumstances or its international legal obligations.

The ever-expanding MNC Pharma list of concerns on Indian IP laws:

The areas of MNC Pharma concern, related to Indian IP laws, continues to grow even in 2018. The letter dated February 8, 2018 of the Intellectual Property Owners Association, Washington, DC to the USTR, makes these areas rather clear. I shall quote below some major pharma related ones, from this ever-expanding list:

  • Additional Patentability Criteria – section 3 (d): The law makes it difficult for them to secure patent protection for certain types of pharma inventions.
  • TADF (Technology Acquisition and Development Fund)is empowered to request Compulsory Licensing (CL) from the Government:Section 4.4 of India’s National Manufacturing Policy discusses the use of CL to help domestic companies access the latest patented green technology.This helps in situations when a patent holder is unwilling to license, either at all or “at reasonable rates,” or when an invention is not being “worked” within India.
  • India’s National Competition Policyrequires IP owners to grant access to “essential facilities” on “agreed and nondiscriminatory terms” without reservation. They are not comfortable with it.
  • Regulatory Data Protection: The Indian Regulatory Authority relies on test data submitted by originators to another country when granting marketing approval to follow-on pharma products. It discourages them to develop new medicines that could meet unmet medical needs.
  • Requirement of local working of patents: The Controller of Patents is empowered to require patent holders and any licensees to provide details on how the invention is being worked in India. Statements of the Working, (Form 27),must be provided annually.Failure to provide the requested information is punishable by fine or imprisonment. It makes pharma patent holders facing the risk of CL, if they fail to “work” their inventions in India within three years of the respective patent grant.
  • Disclosure of Foreign Filings: Section 8 of India’s Patent Act requires disclosure and regular updates on foreign applications that are substantially “the same or substantially the same invention.” They feel it is irrelevant today.

Pharma MNCs’ self-serving tirade is insensitive to Indian patient interest:

Continuing its tirade against some developed and developing countries, such as India, the US drug manufacturers lobby group – Pharmaceutical Research and Manufacturers of America (PhRMA) has urged the office of the US Trade Representative (USTR) to take immediate action to address serious market access and intellectual property (IP) barriers in 19 overseas markets, including India, reports reported The Pharma Letter on February 28, 2018. It will be interesting to watch and note the level active and passive participation of India based stakeholders of this powerful US lobby group, as well.

Government of India holds its ground… but the saga continues:

India Government’s stand in this regard, including 2018 Special 301 Report, has been well articulated in its report released on January 24, 2018, titled “Intellectual Property Rights Regime in India – An Overview”, released by the Department of Industrial Policy and Promotion Ministry of Commerce and Industry (DIPP). The paper also includes asummary of some of the main recommendations, as captured in the September 2016 Report of the High-Level Panel on Access to Medicines, constituted by the Secretary-General Ban Ki-Moon of the United Nations in November 2015.  Some of these observations are as follows:

  • WTO members must make full use of the TRIPS flexibilities as confirmed by the Doha Declaration to promote access to health technologies when necessary.
  • WTO members should make full use of the policy space available in Article 27 of the TRIPS agreement by adopting and applying rigorous definitions of invention and patentability that are in the interests of public health of the country and its inhabitants. This includes amending laws to curtail the evergreening of patents and awarding patents only when genuine innovation has occurred.
  • Governments should adopt and implement legislation that facilitates the issuance of Compulsory Licenses (CL). The use of CL should be based on the provisions found in the Doha Declaration and the grounds for the issuance left to the discretion of the governments.
  • WTO members should revise the paragraph 6 decision in order to find a solution that enables a swift and expedient export of pharmaceutical products produced under compulsory license.
  • Governments and the private sector must refrain from explicit or implicit threats, tactics or strategies that undermine the right of WTO Members to use TRIPS flexibilities.
  • Governments engaged in bilateral and regional trade and investment treaties should ensure that these agreements do not include provisions that interfere with their obligations to fulfill the rights to health.

The DIPP report includes two important quotes, among several others, as follows:

Joseph Stiglitz, Nobel Prize for Economics (2001) – an American Citizen:

-       “If patent rights are too strong and maintained for too long, they prevent access to knowledge, the most important input in the innovation process. In the US, there is growing recognition that the balance has been too far tilted towards patent protection in general (not just in medicine).”

-       “Greater IP protection for medicines would, we fear, limit access to life-saving drugs and seriously undermine the very capable indigenous generics industry that has been critical for people’s well-being in not only India but other developing countries as well”.

Bernie Sanders, an American Citizen and Senior U.S. Senator:

-      “Access to health care is a human right, and that includes access to safe and affordable prescription drugs. It is time to enact prescription drug policies that work for everyone, not just the CEOs of the pharmaceutical industry.”

-      “Healthcare must be recognized as a right, not a privilege. Every man, woman and child in our country should be able to access the health care they need regardless of their income.”

Conclusion:

Why is then this orchestrated moaning and accompanying pressure for making Indian IP laws more stringent, which apparently continues under the façade of ‘innovation at risk’, which isn’t so – in any case. But, cleverly marketed high priced ‘me too’ drugs with molecular tweaking do impact patient access. So is the practice of delaying off-patent generic drugs entry, surreptitiously. Instead, why not encourage Voluntary Licensing (VL) of patented drugs against a mutually agreed fee, for achieving greater market access to the developing countries, like India?

Whatever intense advocacy is done by the vested interests to change Indian patent laws in favor of MNC pharma, the intense efforts so far, I reckon, have been akin to running on a treadmill – without moving an inch from where they were, since and even prior to 2005. The moaning of MNC Pharma on the Indian IP ecosystem, as I see it, will continue, as no Indian Government will wish to take any risk in this area. It appears irreversible and is likely to remain so, for a long time to come. The time demands from all concerned to be part of the solution, and not continue to be a part of the problem, especially by trying to tamper with the IP ecosystem of the country.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Big Pharma: Now A ‘Chink in Its Armor’?

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Emerging trends bring to the fore a possible ‘Chink in the Armor’ of the ‘Big Pharma’, despite a number of recent belligerent moves.

One such move I had deliberated in my earlier blog post. There I mentioned that 2014 report on ‘International Intellectual Property (IP) Index’ of the US Chamber of Commerce’s Global Intellectual Property Centre (GIPC) highlights India’s featuring at the bottom of 25 countries on Intellectual Property (IP) protection. Accordingly, the US Chamber having put forth a set of recommendations reportedly urged the US Trade Representive (USTR) to classify India as a ‘Priority Foreign Country’. This nomenclature is usually attributed to the worst offenders of ‘Intellectual Property Rights (IPR)’, which could culminate into trade sanctions.

The move attempts to dissociate IPR from ‘access to medicines’:

Though the methodology and alleged biases of this report were the topics of raging debates, according to USTR, this move of the US Chamber of Commerce is reportedly just against the IP regime in India and ‘not about access to medicines.’

This clarification is indeed bizarre, as most of the issues related to creation of intense political pressure from overseas for stringent IP regime in a country, such as India, revolve around access to patented medicines. The twin issue of IP and ‘access to patented medicines’ can hardly be separated.

Same old contentious example of ‘Glivec Access Program’:

The example of ‘Glivec Access Program’ does not appear to have many takers within the experts either for well-argued reasons.

Even then, to substantiate the point that the IP issues in India are not related to ‘access to patented medicines’, the US Chamber of Commerce states, yet again:

“In the case of Glivec, Novartis provided the leukemia drug to 95 per cent of patient population for free. The annual cost for Glivec generic treatment is approximately three to for times the average annual income in India”.

It is worth noting that the Swiss drug-maker Novartis reportedly gave the same example while defending the patent protections of Glivec before the Supreme Court without success. The apex judiciary ultimately dismissed the case last year.

Post Glivec judgment, the same ‘patient access program’ was debates in television programs too. However, its relevance for enhancing access could not be established in either of these two high profile public deliberations, as there were hardly any takers.

That said, I do not have any inkling, whether the protagonists of this much-touted “Glivec Access Program” would at anytime, in future, be able to establish their claim beyond any reasonable doubt that, ‘95 percent of the total patients population suffering from chronic myeloid leukemia receive Glivec free of cost from Novartis’.

Visible ‘Chink in its Armor’:

Not so long ago, Global CEO of Bayer reportedly proclaimed in public that:

“Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western Patients that can afford it.”

In tandem various other tough uttering, well crafted by the global communication agencies of ‘Big Pharma’, followed on the same IPR related issues, projecting its tough monolithic dimension.

However, after keenly watching a good number of much contentious moves being taken on IP and various other related areas by its lobby groups, both in India and overseas, it appears that all constituents of the ‘Big Pharma’ are not on the same page for all these issues, clearly exposing the ‘Chink in its Armor’, as it were.

Let me now give some examples, spanning across various issues, to vindicate this point:

I. Differences on ‘public disclosure of all Clinical Trial data’:

As discussed in my blog post earlier, The Guardian reported an incident on the above issue in July 2013. The article stated that the global pharmaceutical industry has “mobilized” an army of patient groups to lobby against the plan of European Medicines Agency (EMA) to force pharma companies publishing all Clinical Trial (CT) results in a public database for patients’ interest.

Important global pharma industry associations strongly resisted to this plan. The report indicated that a leaked letter from two large pharma trade associations, the Pharmaceutical Research and Manufacturers of America (PhRMA) of the United States and the European Federation of Pharmaceutical Industries and Associations (EFPIA), had drawn out the above strategy to combat this move of EMA.

The Chink:

However despite this grand strategy, some constituents of Big Pharma, such as, Abbott, GlaxoSmithKline (GSK), Johnson & Johnson decided to disclose the results of all applicable/covered clinical trials, regardless of outcome, in a publicly accessible clinical trials results database.

II. Differences on ‘leaked pharma lobbying plan against South African draft IP Policy’:

February 3, 2014 issue of ‘The Lancet’ states, among other issues, the draft IP policy of South Africa seeks to address patent ever-greening, a contentious strategy in which drug firms tweak formulations to extend the 20-year life of a patent.

The leaked 9 page document of the PR firm, Public Affairs Engagement (PAE), titled, ‘Campaign to Prevent Damage to Innovation from the Proposed Draft National IP Policy in South Africa’, was reportedly prepared for ‘Pharmaceutical Researchers and Manufacturers of America (PhRMA)’ based at Washington DC and the lobby group representing research-based pharmaceutical companies in South Africa – ‘Innovative Pharmaceuticals Association of South Africa (IPASA)’.

The Chink:

As deliberated in my earlier blog post, when the above lobbying plan was leaked out, Swiss drug maker Roche and Denmark’s Novo-Nordisk reportedly resigned from the IPASA. Both the companies said that neither do they support this campaign nor have they given any approval to it and hence they are resigning from IPASA. However, the above report quoting IPASA states, “IPASA maintains that the departure of Roche and Novo-Nordisk did not weaken the association’s position.”

III. Other recent major differences within ‘Big Pharma’ constituents:

The Chink:

A. Merck Sereno:

Indian pharma regime may appear to be not encouraging or protecting innovation to the US Chamber of commerce, but one of the oldest constituents of the ‘Big Pharma’ – Merck Sereno has reportedly articulated quite a different take on this score.

In an interview to ‘The Economic Times’, Stefan Oschmann, member of the executive board and CEO, Merck, Germany made some very important observations on:

Patentability:

“Some of the strategies used in the past were developing 20 products and slightly differentiating them. That doesn’t work anymore. This industry has to do its home work.” He added that it makes little sense to adopt a confrontationist attitude towards sensitive issues.

Access:

Oschmann said, “Companies are rightly or wrongly criticized in spending all their money on 20 percent of the richest people of the world and neglecting the rest of the population. This is changing.”

Pricing:

He would not criticize governments such as India for trying to protect consumers from spiraling health-care costs. “Pricing and tier-pricing are worth looking into”.

Governments across emerging markets have been trying to find a way to the same challenges of increasing access to affordable healthcare. Oschmann feels, “This is legitimate to any government. What matters is rules are transparent, fair and non-discriminatory. Rules shouldn’t be used as a tool for industrial policy to only foster local industry.”

Another Chink:

B. GlaxoSmithKline:

Another icon in the global pharmaceutical industry Sir Andrew Witty, the CEO of GlaxoSmithKline, reportedly commented a few months ago on the following, with a pragmatic approach to the situation:

Pricing:

“I think it is wholly reasonable for a country that is having a tremendous growth with challenges has to think about pricing. I don’t think that it is a ridiculous proposition. Of course it hurts the period you go through that price adjustments, there are alternative ways to achieve and having a good dialogue may create positive ways to do it.”

Patented medicines:

“I am not one of those CEOs who is gonna stand here and say that you have to have a same approach as you have in other country. India is a very unusual country. It starts from different place than a Britain or a France or a USA, therefore we have to think about what is the right way for India to balance its needs.”

IP:

Sir Andrew emphasized, “And the key to that isn’t to get rid of patents; the key to that is to fix the R&D and manufacturing processes. And that’s what we’ve got to realize in the world we are going to be living in the next 30 or 40 years; companies cannot just turn up and have any price they want. Companies will have to come with a competitive and efficient business model, which will bring real innovation to the people.”

Conclusion: 

Culling all these important developments together, while traveling back in recent times, it does appear, whether the issues are on IP, access or even pricing of medicines, seemingly overpowering might (or may just be simple bullying tactics) of US Chamber of commerce is drowning some very important ‘Big Pharma’ constituents’ voices and numbing many others, despite a visible ‘Chink in its Armor’.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

“India is The Biggest Battlefield for Intellectual Property Rights”

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The US Senator Orrin Hatch reportedly made the above comment while introducing the 2014 report on ‘International Intellectual Property (IP) Index’, prepared by an Israel based consultancy firm – Pugatch Consilium for the Global Intellectual Property Centre (GIPC) of the US Chamber of Commerce. In this forum, the Senator further alleged, “India misuses its own IP system to boost its domestic industries”.

Similar comment on South African IP Policy:

It is interesting to note that this ‘Battle Cry’ on IPR follows almost similar belligerent utterance of a Washington DC-based lobbying firm named ‘Public Affairs Engagement (PAE)’, reportedly headed by a former US ambassador Mr. James Glassman.

PAE, in a recent South African IP policy related context, as deliberated in my earlier blog titled, “Big Pharma’s Satanic Plot is Genocide”: South Africa Roars”, had stated in January 2014, “Without a vigorous campaign, opponents of strong IP will prevail, not just in South Africa, but eventually in much of the rest of the developing world.”

The GIPC report:

That said, in the GIPC report, India featured at the bottom of 25 countries on Intellectual Property (IP) protection with a score of 6.95 out of 30. Thailand, Vietnam, Indonesia and Argentina also scored low in overall ranking on protection for patents, copyright and trademarks. The United States ranked at the top, followed closely by Britain and France.

Interestingly, no country could register a “perfect” score in the survey, which used 30 factors ranging from levels of counterfeiting and piracy to patents and legal protections for all kinds of products and services ranging from pharmaceuticals to software to Hollywood films.

Among other BRIC countries, Russia with a score of 13.28, China with 11.62 and Brazil with 10.83, ranked 13th, 17th and 19th, respectively, within the selected 25 countries.

Key reasons, especially related to pharmaceuticals, as cited for the poor rating of India are as follows:

  • “Patentability requirements in violations of TRIPS”
  • “Regulatory Data Protection (RDP) not available”
  • “Patent term restoration not available”
  • “Use of Compulsory Licensing (CL) for commercial non-emergency situation”

The ground reality in India:

The answers to all these questions are much discussed and now an integral part of Indian Patents Act, as enacted by the Parliament of the country after prolong deliberations by the astute lawmakers keeping patients’ interest at the center.

As I had indicated earlier, there does not seem to be any possibility of these laws getting amended now or in foreseeable future, despite the above ‘Battle Cry’, Special 301 Watch List of the US, and continuous poor rating by the US Chamber of Commerce. This is mainly because of humanitarian sentiments attached to this issue, which are robust and sensitive enough to ignore even politically in India. Let me try to address all these 4 points briefly as follows:

“Patentability requirements in violations of TRIPS”:

Patentability is related mainly to Section 3(d) of the Patents Act. India has time and again reiterated that this provision is TRIPS compliant. If there are still strong disagreements in the developed world, the Dispute Settlement Body of the ‘World Trade Organization (WTO)’can be approached for a resolution, as the WTO has clearly articulated as follows:

“WTO members have agreed that if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. That means abiding by the agreed procedures, and respecting judgments. A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a failure to live up to obligations.”

Thus, it is quite challenging to fathom, why those countries, instead of creating so much of hullabaloo, are not following the above approach in the WTO for the so called ‘patentability’ issue in India?

“Regulatory Data Protection (RDP) not available”:

In this context, Commerce and Industry Minister Anand Sharma had reportedly asserted earlier at a meeting of consultative committee of the Parliament as follows:

“India does not provide data exclusivity for pharmaceuticals and agro-chemicals which is in the paramount interest of our generic pharmaceutical industry as grant of data exclusivity would have considerable impact in delaying the entry into the market of cheaper generic drugs.”

Hence, the question of having RDP in India does not possibly arise, at least, in near to mid term, which would require moving an amendment in the relevant Act through the Parliament.

“Patent term restoration not available”:

Again, this provision does not exist in the Indian Patents Act. Hence, in this case too, a change does not seem likely, at least, in near to mid term, by bringing an amendment through the Parliament.

“Use of Compulsory Licensing (CL) for commercial non-emergency situation”:

Besides situations like, national emergency or extreme urgency, the current CL provisions, as per the Indian Patents Act, specifically state that at any time after the expiration of three years from the grant of patent, any interested person may make an application to the Patent Controller for grant of patent on the following grounds:

  • Whether the reasonable requirements of the public with respect to the patented invention have been satisfied?
  • Whether the patented invention is available to the public at a reasonable affordable price?
  • Whether the patented invention is worked in the territory of India?

It is worth mentioning, the Government has no authority to direct any individual for not applying for any CL under the above provision of the statute, hence law will take its own course in this area too, unless an amendment through Parliament is made in the Patents Act, which seems very unlikely again in the near to medium term.

Eyebrows raised on methodology and motive behind the ‘IP Index’ report:

Media report indicates that IP experts in India have questioned the methodology and even the motive behind GIPC’s ‘International Intellectual Property (IP) Index’ where India has been ranked the lowest among 25 countries.

The same article quotes a well-known IP expert saying, “Underlying this report is a major paradox that protecting weak patents makes the IP regime a strong one. Countries such as India that have stood up for genuine innovation and refused to protect trivial inventions have been accused of having ‘weak’ IP regimes, while it should have been the other way round.”

The article also mentions that Pugatch Consilium, which provides advisory services to top global drug makers and their trade associations, drafted the report for the US Chamber of Commerce.

Conclusion:

Keeping aside the strong allegation that the GIPC report has some ulterior motive behind, the high profile PR blitzkrieg of the pharma multinational trade associations, quite in tandem with South African outburst on the same IP issue, as I wrote in my blog post “Big Pharma’s Satanic Plot is Genocide”: South Africa Roars”, is indeed noteworthy.

However, even if one goes purely by the merits of the report with GIPC’s reasoning on ‘Why is India losing ground’, I reckon, despite so much of cost-intensive efforts and pressures by the global pharma lobbying groups, their expectation for a change in the pharma patents regime in India, any time soon, is probably much more than just a wishful thinking.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.