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India, China Revoke Four Pharma Patents in A Fortnight: A Double Whammy for MNCs?

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Revocation of four pharma patents by India and China within a fortnight has raised many eyebrows, yet again, across the globe. In this short period, India has revoked three patents and China one.

While this quick development is probably a double whammy for the Multinational Corporations (MNCs) operating in both the countries, a future trend could possibly emerge by analyzing and connecting the evolving dots.

On August 8, 2013, a judicial body, the Intellectual Property Apellate Board (IPAB) of India reportedly revoked two patents of Allergan Inc on Combigan and Ganfort, both are Fixed Dose Combination (FDC) drugs of known molecules, used in the treatment of specified eye conditions. Local pharmaceutical player Ajantha Pharma had challenged these patents granted earlier to Allergan Inc. by the Indian Patent Office (IPO), alleging that the patents were obtained on false representation, the compositions were obvious ones, mere admixture of two pharmaceutical substances and not inventions.

IPAB in its order, while revoking the patent, has also said:

  • “The revocation of the patent was sought on various grounds that the patent was obtained on a false suggestion or representation, that it is not an invention, that it is obvious and does not sufficiently disclose and that the Section 8 of the Patents Act, 1970 was violated.”
  • The “respondents (Allergan Inc) have incorrectly deciphered enhancement in therapeutic efficacy as reduction in interocular pressure comparable to serial application.”
  • “The respondent has not shown that it had complied with the Section 8 of Patents Act, 1970.”

Though Allergan claimed to have achieved enhanced efficacy with reduced side effects for these FDCs, the IPAB did not find the claims justifiable. Interestingly, Ajantha’s product reportedly is much less expensive too. As compared to Allergan’s Ganfort drops (3 ml) costing about Rs 580, Ajanta’s equivalent formulation costs just Rs 131.

The other pharma patent revocation of the fortnight:

On July 27, 2013, IPAB revoked yet another patent granted earlier to GlaxoSmithKline (GSK)’s Lapatinib ditosylate salt of its breast cancer drug Tykerb, while upholding the patent on the original API, Lapatinib. IPAB in its order has stated that the ditosylate salt version of Lapatinib is not patentable as per patentability criteria of the Indian Patents Act.

Experts believe, with these decisions, the Indian legal system has clearly demonstrated that despite intense anger, pressure and protests mainly from the United States and Europe, to dilute public health interest related safeguards enshrined in the current Indian patent regime, the rule of law still prevails in the country for IP disputes.

Tykerb decision of IPAB follows the landmark judgment of the Supreme Court of India clarifying patentability criteria for incremental innovations.

An interesting precedent set:

In case of Tykerb of GSK, unlike other occasions, for the first time one MNC has challenged the patent of another MNC in India, instead of domestic companies doing so. The German drug manufacturer, Fresenius Kabi, instead of criticizing Indian IP law like other MNCs, had challenged the British drug maker GSK’s patent on the patentability criteria as provided in the Indian Patent Law and obtained a favorable decision from the IPAB against one of their two patent challenges on Tykerb.

A different case, yet worth mentioning:

Earlier, in late 2012, Delhi High Court while recognizing the validity of Roche’s patent for Tarceva (erlotinib), ordered that Cipla’s generic equivalent of erlotinib has different molecular structures. Hence, Cipla has not infringed Roche’s patent.

The generic version of Cipla’s erlotinib is reportedly available at a price of Rs 1,600 against Roche’s price of Rs 4,800 for Tarceva. Though this is not a patent revocation, but an interesting case nevertheless.

Other patent revocations:

Besides the only Compulsory License (CL) issued, so far, by the IPO for Bayer’s Nexavar to Natco (Cost of a pack of 120 tablets of Natco generic is Rs.8,800 against Nexavar’s Rs. 280,000), such patent challenges are now taking place in India quite close on the heels of one another as follows:

Sutent (Pfizer): 

In this case, the patent for liver and kidney cancer drug of Pfizer – Sutent (Sunitinib), granted earlier by the IPO in 2007, was revoked by the IPAB in October 2012, after a post grant challenge by Cipla and Natco Pharma on the ground that the claimed ‘invention’ does not involve inventive steps.

However, on November 26, 2012 in a new twist to this case, the Supreme Court of India reportedly restored the patent for Sutent. Interestingly, at the same time the court removed the restraining order, which prevented Cipla from launching a copycat generic equivalent of Sunitinib.

The cost of 45 day’s treatment with Cipla generic is Rs. 50,000 against Rs. 196,000 of Sutent. (Source ET, April 7, 2013)

Pegasys (Roche):

Again, on November 2, 2012 the IPAB revoked the patent of Pegasys (Peginterferon alfa-2a) – the hepatitis C drug of the global pharmaceutical giant Roche. It is worth mentioning, Pegasys enjoys patent protection across the world.

Though Roche was granted a patent for Pegasys by IPO in 2006, this was subsequently contested by a post-grant challenge by the Indian pharma major – Wockhardt and the NGO Sankalp Rehabilitation Trust (SRT) on the ground that Pegasys is neither a ‘novel’ product nor did it demonstrate ‘inventiveness’ as required by the Patents Act of India.

It is worth noting, although the IPO had rejected the patent challenges by Wockhardt and SRT in 2009, the judicial body IPAB reversed IPO’s decision revoking the patent of Pegasys, costing Rs. 360,000 for a six month course of treatment for a patient.

Iressa (AstraZeneca):

On November 26, 2012, IPAB reportedly denied patent protection for AstraZeneca’s anti-cancer drug Iressa (Gefitinib) on the ground that the molecule lacked invention.

The report also states that AstraZeneca suffered its first setback on Gefitinib in June 2006, when the Indian generic company Natco Pharma opposed the initial patent application filed by the global major in a pre-grant opposition. Later on, another local company, GM Pharma, joined Natco in November 2006.

After accepting the pre-grant opposition by the two Indian companies, IPO in March 2007 rejected the patent application for Iressa Gefitinib citing ‘known prior use’ of the drug. AstraZeneca contested the order through a review petition, which was dismissed in May 2011.

Anti-asthma FDC aerosol suspension (Merck & Co):

Similar to Allergan case, on December 11, 2012 Indian Patent Office (IPO) reportedly revoked a patent granted to an anti-asthma FDC drug of Merck & Co on the ground of lack of invention, after the domestic pharma major Cipla Ltd challenged an earlier granted patent of this FDC drug.

This aerosol suspension combines three molecules: mometasone furoate, formoterol and heptaflouropropane.

A similar asthma treatment, Dulera, reportedly lost its Indian patent held by Novartis AG in 2010.

Patentability for ‘Incremental Innovations’ in India:

Patentability criteria for any ‘incremental innovation’ has been defined in the Section 3(d) of the Indian statute as follows:

“The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.”

“Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”

Indian Patents Act prevails: 

As is well known, way back in 2006, IPO refused to grant patent to the cancer drug Glivec of Novartis on the ground that the molecule is a mere modification of an existing substance known as Imatinib.

In that case, on April 1, 2013 the Supreme Court of India upheld the validity of Section 3(d), where the rules of the game for patentability of incremental pharmaceutical innovations, as captured in the Indian Patents Act 2005, were cast in stone.

Court did not disallow all incremental innovations:

Point 191 in page number 95 of the Glivec judgment very clearly states as follows:

“191. We have held that the subject product, the beta crystalline form of Imatinib Mesylate, does not qualify the test of Section 3(d) of the Act but that is not to say that Section 3(d) bars patent protection for all incremental inventions of chemical and pharmaceutical substances. It will be a grave mistake to read this judgment to mean that section 3(d) was amended with the intent to undo the fundamental change brought in the patent regime by deletion of section 5 from the Parent Act. That is not said in this judgment.”

Thus, it should not be highlighted unfairly by concerned constituents that all ‘incremental innovations’ are not patentable in India. The above judgment just says that Glivec is not patentable as per Section 3(d) of Indian Patents Act based on the data provided and the arguments of Novartis.

Only 3% of patents are challenged:

Quoting a study, a recent media report highlighted that only 3% of the patent applications filed in India since 2006 were challenged. The study concluded, “This demonstrates that given the various resource constraints faced by the Indian patent office, one can never really be sure of the patent quality unless the patent is challenged.”

Rejection by IPO under Section 3d is minimum – is that a key issue?

Another study done by Columbia University reportedly found that out of 214 patents filed in India last year, only 3 patents were rejected by IPO exclusively for failing to prove better efficacy, as required under Section 3d. Turning this finding on its head, would it be reasonable to ponder:

Could this be a key issue for so many patents failing to pass the acid test of judicial scrutiny when challenged?

Government has no role to play in IP disputes:

The proponents of ‘no change required in the Section 3(d)’ argue, patent challenge is a legal process all over the world, where the Government has hardly any role to play in resolving these disputes. The law should be allowed to take its own course for all disputes related to the Patents Act of the country, including Section 3(d).

They also opine that India must be allowed to follow the law of justice without casting aspersions on the knowledge and biases of the Indian judiciary by the vested interests.

That said, there is certainly an urgent need to add speed to this legal process by setting up ‘Fast-track Courts’ for resolving all Intellectual Property (IP) related disputes in a time bound manner.

Pharma patents granted in India:

As reported in the media, pharma MNCs have been granted over 1,000 patents since 2005. Moreover out of 4,036 patents granted in the past six years, 1,130 have been awarded to MNCs, like:

  • AstraZeneca 180 patents
  • Roche with 166 patents
  • Sanofi with 159 patents
  • Novartis with 147 patents

It is therefore understandable, as pharma MNCs have secured more number of pharma patents they are facing larger number of litigations at this point of time.

China and Brazil revoke patents:

Last week, just about a year after China introduced the country’s amended patent law, its State Intellectual Property Office (SIPO) has reportedly revoked the patent on HIV/AIDS and hepatitis B drug – Viread (tenofovir disoproxil fumarate) of Gilead Science Inc. Aurisco, the largest manufacturer of active pharmaceutical ingredients in China, challenged this patent. The ground of patent revocation was that the drug lacked novelty and was not entitled to protection.

In 2008 Brazil also declared the patent of tenofovir invalid. It is worth mentioning that tenofovir of Gilead is the third-best-selling drug of the company, clocking sales of US$ 849 million in 2012.

South Africa mulls new law to stop ‘Evergreening’:

Recently, the Department of Trade and Industry of South Africa has reportedly submitted to the South African Cabinet a draft Intellectual Property Policy with far-reaching changes to the country’s Intellectual Property Rights (IPR) for medicines in order to increase access to cheaper drugs by making it harder for companies to obtain and extend patents.

The draft includes a proposal to introduce a patent examination office to stop pharmaceutical companies from “evergreening” where companies take out new patents based on minor changes or new uses. 

Currently, South Africa uses a depository system, in which patent applications are granted without extensive scrutiny. Experts believe, “this system allows companies to file multiple patents on the same medicine and extend the life of their monopoly, keeping prices artificially high.”

Innovators Angry:

In this context, the following report recently captured the anger of the innovator companies and stated that the US drug giants are once again pushing for stronger patent protection in India:

“A coalition of U.S. lawmakers and business groups outlined concerns about Indian policies as a threat to American exports, jobs and innovation in a letter to President Barack Obama on June 18. Among the business groups were the Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Association. On June 14, the top Democrat and Republican on the Senate Finance Committee urged that Kerry raise trade concerns on his visit.”

Quoting US Chamber of Commerce’s Global Intellectual Property Center another report highlighted, “Recent policy and judicial decisions that invalidate intellectual property rights, which have been increasing in India, cast a daunting shadow over its otherwise promising business climate. From the revocation of patents to the staggering rates of piracy, India stands alone as an international outlier in IP policies. This trend is bad for investment, innovation and international trade.”

Does it benefit patients? 

In the paper titled ‘TRIPS, Pharmaceutical Patents and Access to Essential Medicines: Seattle, Doha and Beyond’, published in ‘Chicago Journal for International Law, Vol. 3(1), Spring 2002’, the author argues, though the reasons for the lack of access to essential medicines are manifold, there are many instances where high prices of drugs deny access to needed treatments for many patients. Prohibitive drug prices, in those cases, were the outcome of monopoly due to strong intellectual property protection.

The author adds, “The attempts of Governments in developing countries to bring down the prices of patented medicines have come under heavy pressure from industrialized countries and the multinational pharmaceutical industry”.

While the ‘Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS)’ of the World Trade Organization (WTO) sets out minimum standards for the patent protection for pharmaceuticals, it also offers adequate safeguards against negative impact of patent protection or its abuse in terms of extraordinary and unjustifiable drug pricing. The levels of these safeguards vary from country to country based on the socioeconomic and political requirements of a nation, as in India.  

Following table is an example of price differential between patented and generic equivalents of those molecules used in the treatment of HIV/AIDS:

1

2

3

3TC (Lamivudine)

Zerit (Stavudine)

Viramune (Nevirapine)

Price / Year / Patient in US$

Price / Year / Patient in US$

Price / Year /Patient in US$

GSK

Cipla

Hetero

BMS

Cipla

Hetero

B.I.*

Cipla

Hetero

3271

190

98

3589

70

47

3508

340

202

(Source: Third World Network, *B.I: Boehringer Ingelheim) 

Patentability for ‘genuine innovations’:

A report on ‘Patentability of the incremental innovation’ indicates that the policy makers keeping the following points in mind formulated the Indian Patents Act 2005:

  • The strict standards of patentability as envisaged by TRIPS pose a challenge to India’s pharmaceutical industry, whose success depended on the ability to produce generic drugs at much cheaper prices than their patented equivalents.
  • A stringent patent system would severely curtail access to expensive life saving drugs to a large number of populations in India causing immense hardships to them.
  • Grant of a product patents should be restricted only to “genuine innovations” and those “incremental innovations” on existing medicines, which will be able to demonstrate significantly increased efficacy over the original drug.

Conclusion:

A study by the ‘Indian Pharmaceutical Alliance (IPA)’ indicates that 86 pharmaceutical patents granted by the IPO post 2005 are not breakthrough inventions but only minor variations of existing pharmaceutical products and demanded re-examination of them.

Since, most of the above patents have not been challenged, as yet, the quality of these patents cannot be ascertained beyond any reasonable doubt, as we discuss today.

If the apprehension, as expressed above in the IPA study has any merit, right answers to the following questions, I reckon, would help charting out the future direction for the IP ecosystem of India:

  • Is there a theoretical possibility of revocation of all these 86 already granted product patents, if and when challenged in a court of law?
  • Is the current Patents Act of India pragmatic?
  • Does it reasonably benefit both the innovators and the Indian patients,  signifying a paradigm shift in the global IPR scenario?
  • Will it inspire other countries also to emulate similar IP system in the years ahead?
  • Will it then invite more intense ire of the global pharma innovator companies creating increasing  pressure on the Indian Government to amend the current Patents Act?
  • Being under continuous public scrutiny, would it be feasible for any Indian Government, now or in future, in the near or medium term, to amend the Indian Patents Act due to any amount of outside pressure?
  • And finally, is the Act then irreversible, at least, for quite some time from now?

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.

 

More Glivec Like Deals in China and Mounting Global Challenges: Innovators poised Joining Biosimilar Bandwagon

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Pressure from the emerging markets on pricing of patented products is mounting fast. This time the country involved is China.

Recently, the Health Minister of China who stepped down last month after a seven-year stint in the top health job reportedly commented that western drugmakers will require to give hefty subsidies and forgo significant amount of profit on expensive cancer drugs, if they want access to huge market of China. He further voiced as follows:

“If the cost (of patented drugs) is too high, maybe only a few percent of patients can benefit. If we can arrange an appropriate, acceptable, affordable price, then you can have a huge market.”

‘Glivec deal’ in China: 

In the same report, it was indicated that in China Novartis ultimately agreed to donate three doses of its leukemia drug Glivec for every one sold to the government.

It is expected that many more such deals will take place in China.

The situation to get more challenging in the emerging markets: 

Many experts believe that due to high cost of patented drugs, especially biologics, negotiating hefty discounts with the Governments may be the best alternative for the innovator companies to avoid any possibilities of Compulsory Licensing (CL), like what happened to Bayer’s cancer drug Nexavar in India.

An opportunity in biosimilar drugs: 

Biologic drugs came to the international market slightly more than three decades ago, in 1980s. Growing at a scorching pace, the value turnover of these products exceeded US$ 138 billion in 2010 (IMS Health).

Launch of biologics like, Recombinant Insulin, Human Growth Hormone (HGH), Alteplase, Erythropoietin (EPOs), Granulocyte Colony Stimulating Factors (G-CSFs) and Monoclonal Antibodies (MAbs) kept fueling the market growth further.

Patent expiry of a number of biologic drugs over a period of next five years, especially in areas like, various types of cancer, diabetes and rheumatoid arthritis, besides many others, will help opening a huge window of opportunity for the global biosimilar players, including from India, to reap a rich harvest.

Global innovators joining the bandwagon: 

After a dream-run with high priced patented drugs for a reasonably long time, now stung by the current reality in various developed and emerging markets and factoring-in the width/depth/robustness of their own research pipeline, many global players have started taking a hard look at the emerging opportunities offered by biosimilar drugs.

Moreover, high price of original biologic drugs, cost containment pressure by various Governments, encouragement of generic prescriptions, large number of such drugs going off patent and growing demand of their low cost alternatives across the world, are making biosimilar market more and more lucrative from the global business perspective to all interested players, including from India.

According to Bloomberg Industries (2013), during the next six years biologic drugs with a total annual sales turnover of US$ 47 billion in 2012, will go off patent.

Sniffing opportunities for business growth, as stated above, many hard-nosed large research-based global pharmaceutical companies, currently fighting a challenging battle also in the ground of a tougher ‘patent cliff’, have started venturing into the biosimilar market, that too in a mega scale.

Some of them have already initiated developing biosimilar versions of blockbuster biologics, as reported below:

Originator Product Indication Biosimilar development by:
Roche/Genentech Rituxan Rheumatoid arthritis Boehringer Ingelheim
Roche/Genentech Herceptin, Rituxan Breast Cancer, Rheumatoid arthritis Pfizer
Roche/Genentech Rituxan Non-Hodgkin’s lymphoma Novartis
Johnson & Johnson Remicade Rheumatoid arthritis Hospira

Source: Bloomberg BusinessWeek

Thus, I reckon, continuous quest for development of cost-effective alternatives to high-priced biologic medicines would keep on propelling the growth of biosimilar drugs, across the world.

Glivec maker Novartis fought a court battle to launch the first ‘Biosimilar drug’ in America: 

In mid-2006, US FDA approved its first ‘biosimilar drug’-Omnitrope of Sandoz, the generic arm of the Glivec maker Novartis, following a Court directive. Omnitrope is a copycat version of Pfizer’s human growth hormone Genotropin. Interestingly, Novartis had also taken the US FDA to court for keeping its regulatory approval pending for a while in the absence of a well-defined regulatory pathway for ‘biosimilar drugs’ in the USA at that time.

More interestingly, having received the US-FDA approval, the CEO of Sandoz (Novartis) had then commented as follows:

“The FDA’s approval is a breakthrough in our goal of making high-quality and cost-effective follow-on biotechnology medicines like, Omnitrope available for healthcare providers and patients worldwide”.

Biosimilar market started shaping-up:

Internationally most known companies in the biosimilar drugs space are Teva, Stada, Hospira and Sandoz. Other large research based global innovator pharmaceutical companies, which so far have expressed interest in the field of biosimilar drugs, are Pfizer, Astra Zeneca, Merck and Eli Lilly.

Following are examples of some biosimilar drug related initiatives of the global players as the market started developing:

  • Merck announced its entry into the biosimilar drugs business on February 12, 2009 with its acquisition of Insmed’s portfolio for US$ 130 million. The company also paid US$ 720 million to Hanwha for rights to its copy of Enbrel of Amgen.
  • Samsung of South Korea has set up a biosimilars joint venture with Quintiles to create a contract manufacturer for biotech drugs.
  • Celltrion and LG Life Sciences have expressed global ambitions in biosimilar drugs.
  • Some leading global innovator biotech companies also like, Biogen Idec and Amgen have reportedly been mulling entry into biosimilar market.

According to Reuter (June 22, 2011), Merck, Sandoz, Teva and Pfizer are expected to emerge stronger in the global biosimilar market, in the years ahead. 

Why is still so low penetration of lower cost biosimilar drugs?

Although at present over 150 different biologic medicines are available globally, just around 11 countries have access to low cost biosimilar drugs, India being one of them. Supporters of biosimilar medicines are indeed swelling as time passes by.

It has been widely reported that the cost of treatment with patented biologic drugs can vary from US$ 100,000 to US$ 300,000 a year. A 2010 review on biosimilar drugs published by the Duke University highlights that biosimilar equivalent of the respective biologics would not only reduce the cost of treatment, but would also improve access to such drugs significantly for the patients across the globe. (Source: Chow, S. and Liu, J. 2010, Statistical assessment of biosimilar products, Journal of Biopharmaceutical Statistics 20.1:10-30)

Now with the entry of global pharma majors, the biosimilar market is expected to get further heated up and develop at a much faster pace with artificial barriers created by vested interests, if any, being removed.

Recent removal of regulatory hurdles for the marketing approval of such drugs in the US  will indeed be the key growth driver.

Other growth drivers:

According to a study (2011) conducted by Global Industry Analysts Inc., besides recent establishment of the above regulatory guidelines for biosimilars in the US, the key growth drivers for global biosimilar market, will be as follows:

▪   Patent expiries of blockbuster biologic drugs

▪   Cost containment measures of various governments

▪   Aging population

▪   Supporting legislation in increasing number of countries

The business potential in India:

The size of biotech industry in India is estimated to be around US$ 4 billion by 2015 with a scorching pace of growth driven by both local and global demands (E&Y Report 2011).

The biosimilar drugs market in India is expected to reach US$ 2 billion in 2014 (source: Evalueserve, April 2010).

Recombinant vaccines, erythropoietin, recombinant insulin, monoclonal antibody, interferon alpha, granulocyte cell stimulating factor like products are now being manufactured by a number of domestic biotech companies like, Biocon, Panacea Biotech, Wockhardt, Emcure, Bharat Biotech, Serum Institute of India and Dr. Reddy’s Laboratories (DRL), besides others.

DRL is the largest biosimilar player in India with an impressive product portfolio. Reditux of DRL is the world’s first Biosimilar monoclonal antibody, which is a copy version of Mabthera/ Rituxan of Roche and costs almost 50 percent less than the original brands.

Some of the Biosimilar products of the Indian Companies are as follows:

Indian Company

Biosimilar Product
Dr Reddy’s Lab Grafeel, Reditux, Cresp
Intas Neukine, Neupeg, Intalfa, Epofit
Shantha Biotech/Merieux Alliance Shanferon,Shankinase,Shanpoietin
Reliance Life Sciences ReliPoietin, ReliGrast, ReliFeron, MIRel
Wockhardt Wepox, Wosulin
Biocon Eripro, Biomab, Nufil, Myokinase, Insugen

(Source: Stellarix Consultancy Services)

The cost of development of Biosimilars in India is around US$ 10-20 million, which is expected to go up, as “Biosimilar Guidelines” are now in place for marketing approval of such products in India.

The ultimate objective of all these Indian companies will be to get regulatory approval of their respective biosimilar products in the US and the EU, either on their own or through collaborative initiatives.

Indian players making rapid strides:

As stated above, biosimilar version of Rituxan (Rituximab) of Roche used in the treatment of Non-Hodgkin’s lymphoma has already been developed by DRL in India. It also has developed Filgastrim of Amgen, which enhances production of white blood cell by the body and markets the product as Grafeel in India.

Similarly Ranbaxy has collaborated with Zenotech Laboratories to manufacture G-CSF.

On the other hand Glenmark reportedly is planning to come out with its first biotech product soon from its biological research establishment located in Switzerland.

Indian pharmaceutical major Cipla reportedly has invested around US$ 60 million in 2010 to acquire stakes of MabPharm in India and BioMab in China and is planning to launch a biosimilar drug in the field of oncology by 2013.

Another large pharmaceutical company of India, Lupin signed a deal with a private specialty life science company NeuClone Pty Ltd of Sydney, Australia for their cell-line technology. Lupin reportedly will use this technology for developing biosimilar drugs in the field of oncology, the first one of which, will reportedly be launched in India by 2013.

The global Market:

In 2011 the turnover of Biologic drugs increased to over US$ 175 billion in the total market of US$ 847 billion. The sale of Biosimilar drugs outside USA exceeded US$ 1 billion.

Six biologic drugs featured in the top 10 best selling global brands in 2012 with Humira of AbbVie emerging as the highest-selling biologics during the year.  Roche remained the top company by sales for biologics with anticancer and monoclonal antibodies.

According to IMS Health report, by 2015, sales of biosimilars are expected to reach between US$ 1.9 – 2.6 billion. The report also states that this market has the potential to be the single fastest-growing biologics sector in the next five years.

Cost of biosimilar development in the developed markets:

The process of developing a biosimilar drug is complex and requires significantly more investment, technical capabilities and clinical trial expertise than any small molecule generic drug. As per industry sources, average product developmental cost ranges between US$ 100 and 250 million in the developed markets, which is several times higher than the same associated with development of small molecule generics, ranging around US$ 1to 4 million.

All these factors create a significant market entry barrier for many smaller players with similar intent but less than adequate wherewithal.

Even higher market entry barrier with ‘second generation’ biosimilar drugs:

Emergence of second generation branded biosimilar products such as PEGylated products and PegIntron (peginterferon alpha), Neulasta (pegfilgrastim) and insulin analogs have the potential to reduce the market size for first generation biosimilar drugs creating significant entry barrier.

Negotiating the entry barriers:

As stated above, the barriers to market entry for biosimilar drugs are, in general, are much higher than any small molecule generic drugs. In various markets within EU, many companies face the challenge of higher development costs for biosimilar drugs due to stringent regulatory requirements and greater lead-time for product development.

Navigating through such tough regulatory environment will demand different type of skill sets, especially for the generic companies not only in areas of clinical trials and pharmacovigilance, but also in manufacturing and marketing. Consequently, the investment needed to take biosimilar drugs from clinical trials to launch in the developed markets will indeed be quite significant.

The future potential:

According to an IMS Health study, the emerging markets will drive biosimilar market growth with significantly more number of patients. The report estimates that over a period of time US will emerge as the number one global biosimilars market.

By 2020, emerging markets and the US are expected to register a turnover of US$11 billion and US$ 25 billion representing a share of 4 percent to 10 percent of the total global biologics market, respectively.

The report estimates that overall penetration of biosimilars within the off-patent biological market will reach up to 50 percent by 2020, assuming a price discount in the range of 20 to 30 percent.

Is 12 years exclusivity in the US a significant entry barrier?

In the US, the innovator companies get 12 years exclusivity for their original biologic drugs from the date of respective marketing approvals by the USFDA.

The BPCI Act clearly specifies that applications for ‘biosimilar drugs’ to the USFDA will not be made effective by the regulator before 12 years from the date of approval of the innovators’ products. In addition, if the original product is for pediatric indications, the 12-years exclusivity may get an extension for another six months.

The key point to note here is, if the USFDA starts its review process for the ‘biosimilar drugs’ only after the ’12 year period’, the innovator companies will effectively get, at least, one additional year of exclusivity over and above the ’12 year period’, keeping applicants for ‘biosimilar drugs’ waiting for that longer.

Conclusion:

As stated above, with around 40 percent cost arbitrage and without compromising on the required stringent international regulatory standards, the domestic ‘biosimilar’ players should be able to establish India as one of the most preferred manufacturing destinations to meet the global requirements for such drugs, just as small molecule generic medicines.

With experience in conforming to stringent US FDA manufacturing standards, having largest number of US FDA approved plants outside USA, India has already acquired a clear advantage in manufacturing high technology chemical based pharmaceutical products in the country. Now with significant improvement in conformance to Good Clinical Practices (GCP) and honed skill sets in the field of biologics, Indian biosimilar players are clearly poised to catapult themselves to even a higher growth trajectory, either on their own or with appropriate collaborative arrangements with the international partners.

Thus, the initiatives of joining the biosimilar bandwagon by the hard-nosed research based global players, I reckon, will ultimately get translated into a win-win advantage for India in the rapidly evolving pharmaceutical space of the world.

Besides, like what they had to do in China, working with the Government to put in place a robust and win-win mechanism of ‘Price Negotiation for Patented Drugs’ in India could augur well for the global players of pharmaceutical and biologic drugs. This mechanism may also help putting forth even a stronger argument against any Government initiative to grant CL on the pricing ground for expensive patented drugs in India.

With all these developments, patients will be the ultimate winners having much greater access to both innovative medicines and biosimilar drugs than what they have today, fetching a huge relief to all right thinking population in 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.

An El Dorado…But Not Without Responsible Pricing:The Cancer Segment in India

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The affordability issue for cancer treatment has been the subject of a raging debate since quite some time, as the incidence of cancer is fast increasing across the world. Just for example a very recent report highlighted that cancer has now become the greatest health risk in the UK, with an average British boy born in 2010 running a 44 percent chance of being diagnosed with any form of cancer during his lifetime. The risk for a baby girl is slightly lower at 40 percent.

In India too, the problem of affordable cancer treatment has now become the center piece of a fiercer public opinion in the healthcare space, more than even HIV, prompting the Government to intervene in this dreadful disease area and address the problem in a holistic way both in the short and also on a longer term basis. This demand is supported by rapidly growing number of cancer patients in the country.

Out of the total number of new cancer patients globally, India now reportedly ranks third as follows:

Rank Country % Of total
1. China 22
2. USA 11
3. India 7.5

As a consequence, cancer now reportedly accounts for one of the main causes of deaths  in India, which is nearly 19 percent higher than deaths caused by heart diseases.

Number of new cancer patients staggering in India:

Over 60,000 new cases are reportedly diagnosed every year in India and 80 percent of them are at an advanced stage, which involve mostly the middle-aged and elderly population of the country, where affordability is even a greater issue.

Cervical and breast cancers are reportedly the most common, contributing over 26 per cent to the total cancer cases in India, followed by lung, mouth, pharynx, ovarian, pancreatic and esophagus cancers.

Whereas cervical cancer is reportedly most common in females with a mortality rate of nearly 15 per 10,000 females, lung cancer has the highest mortality rate of 28 per 10,000 males.

Incidentally, lung cancer is the most commonly diagnosed cancer even globally. Non-Small Cell Lung Cancer (NSCLC) accounts for approximately 90% of all lung cancers. The primary cause of lung cancer in up to 90% of patients is tobacco and represents one-fifth of all cancer-related deaths in India.

However, to address the havoc caused by this dreaded disease effectively, India will also need to bridge the huge gap of shortfall in disease diagnostic infrastructure in the country.

The humongous access gap for cancer patients needs to be effectively addressed by the Government sooner with Public-Private-Partnership (PPP) for diagnosis and treatment, in tandem with other proactive initiatives like, disease awareness campaigns targeted to ensure greater screening and disease prevention, wherever possible.

‘The Lancet’ finding:

Following are some of the important findings on cancer disease profile in India, as reported in May 12, 2012, edition of ‘The Lancet’:

-       6 percent of the study deaths were due to cancer

-       71 percent cancer deaths occurred in people aged 30—69 years

-       Age-standardized cancer mortality rates per 100,000 were similar in rural and urban     areas but varied greatly between the states, and were two times higher in the least educated than in the most educated adults.

This report further calls for immediate Government intervention in this area.

Growing patients number making ‘Oncology Market’ increasingly attractive:

As stated above, incidence of various types of cancer is rapidly increasing across the world, making oncology segment an ‘El Dorado’ for many pharmaceutical players prompting commensurate investments for product development in this area, be these are new molecules or biosimilars.

Thus, the global turnover of anti-cancer drugs, which was around US$ 50 billion in 2009, is expected to grow to US$ 75 billion in 2013 registering a jaw dropping growth rate in today’s turbulent global pharmaceutical market environment.

World Health Organization (WHO) has predicted over 20 million new cases of cancer in 2025 against 12 million in 2008.

Globally, the segment growth will mainly be driven by early detection, longer duration of treatment and the global ascending trend in the incidence and prevalence of cancer propelled by new treatments and improved access to cancer therapies in many countries.

Indian business landscape:

Oncology segment has now emerged as a leading therapeutic area in the Indian pharmaceuticals market too, being fourth largest in volume and tenth largest in value term, mainly driven by lower priced generic equivalents in volume term.

Despite only a smaller number of patients can afford any comprehensive cancer treatment protocol in India, the demand for cancer drugs in the country, where many drug companies follow various types of unconventional logistics systems to reach these drugs to patients, is increasing at a rapid pace.

Global players namely, Roche, BMS, Pfizer, Sanofi, GSK and Merck reportedly dominate the market with innovative drugs. Whereas, domestic companies like, Natco Pharma, Cipla, Sun Pharma, Dr. Reddy’s Lab (DRL), Biocon and others are now coming up with low price generic equivalents of many cancer drugs.

The fact that currently over 30 pharmaceutical companies market cancer drug in the country, demonstrates growing attractiveness of the Oncology segment in India.

Access to newer cancer drugs:

It has been widely reported that newer cancer therapies have significant advantages over available generic cancer drugs both in terms of survival rate and toxicity.

Unfortunately such types of drugs cost very high, severely limiting access to their therapeutic benefits for majority of patients. For a month’s treatment such drugs reportedly cost on an average US$ 3,000 – 4,500 or Rs 1.64 – 2.45 lakh to each patient in India.

More R&D investments in Oncology segment:

Another study recently published by ‘Citeline’ in its  ‘Pharma R&D Annual Review 2012’ points out, more than half of the top 25 disease areas targeted for R&D falls under cancer therapy. Breast cancer comes out as the single most targeted disease followed by Type 2 diabetes. 

This will ensure steady growth of the Oncology segment over a long period of time and simultaneously the issue of access to these medicines to a large number of patients, if the product pricing does not fall in line with socioeconomic considerations of India.

Cancer drug sales dominated in 2012: 

It is interesting to note that around one-third of the ‘Top 10 Brands in 2012′ were for the treatment of cancer as follows:

Top 10 global brands in 2012

Rank Brand Therapy Area Company Sales: (US$ bn)
1. Humira Rheumatoid Arthritis and others Abbott /Eisai (now AbbVie/Eisai) 9.48
2. Enbrel Anti-inflammatory Amgen/Pfizer/Takeda 8.37
3. Advair/Seretide Asthma, COPD GlaxoSmithKline 8.0
4. Remicade  Auto-immune Johnson & Johnson/Merck/ Mitsubishi Tanabe 7.67
5. Rituxan Anti-cancer Roche 6.94
6. Crestor Anti-lipid AstraZeneca/ Shionogi 6.65
7. Lantus Anti-diabetic Sanofi 6.12
8. Herceptin Anti-cancer Roche 6.08
9. Avastin Anti-cancer Roche 5.98
10. Lipitor Anti-lipid Pfizer/Astellas Pharma/Jeil Pharmaceutical 5.55

(Source: Fierce Pharma)

Responsible Pricing a key issue with cancer drugs:

In the battle against the much dreaded disease cancer, the newer innovative drugs being quite expensive, even in the developed markets the healthcare providers are feeling the heat of cost pressure of such medications, which in turn could adversely impact the treatment decisions for the patients.

Thus, to help the oncologists to appropriately discuss the treatment cost of anti-cancer drugs with the patients, the ‘American Society of Clinical Oncology’ recently has formed a task force who will also try to resolve this critical issue.

In many other developed markets of the world, for expensive cancer medications, the patients are required to bear the high cost of co-payment. This may run equivalent to thousands of U.S dollars, which many patients reportedly find difficult to arrange.

It has been reported that even the ‘National Institute of Health and Clinical Excellence (NICE), UK’ considers some anti-cancer drugs not cost-effective enough for inclusion in the NHS formulary, sparking another set of raging debate.

‘The New England Journal of Medicine’ in one of its recent articles with detail analysis, also expressed its concern over sharp increase in the price of anti-cancer medications, specifically. 

An interesting approach:

Experts are now deliberating upon the possibility of creating a ‘comparative effectiveness center’ for anti-cancer drugs. This center will be entrusted with the responsibility to find out the most cost effective and best suited anti-cancer drugs that will be suitable for a particular patient, eliminating possibility of any wasteful expenses with the new drugs just for newness and some additional features. If several drugs are found to be working equally well on the same patient, most cost effective medication will be recommended to the particular individual.

India should also explore this possibility without further delay.

Indian Government trying to find an answer in CL/NLEM/NPPP 2012:

Going by the recent developments in Compulsory License (CL) area for high priced new and innovative cancer drugs, it appears that in the times to come exorbitant prices for cancer drugs may prove to be loaded with risks of grant of CL in India due to immense public pressure.

It appears from the grapevine that Government may also explore the possibility to include some of the newer cancer drugs under National List of Essential Medicines (NLEM) bringing them under price control in conformance with the National Pharmaceutical Pricing Policy 2012 (NPPP 2012), if not through the provision of pricing of patented drugs.

Thus responsible pricing of cancer drugs assumes huge importance for avoidance of the above unpleasant situation in India.

Cancer drug pricing related developments in India:

As stated above, cancer being the second largest killer in India and the patented cancer drugs being generally expensive, a large Indian pharmaceutical player has been reportedly insisting on the government to allow widespread use of “compulsory licenses” for cancer drugs. About 11 years ago various news reports highlighted that this company broke ‘monopoly ‘ of the multinationals by offering to supply life-saving triple therapy AIDS drug cocktails for under US$1 a day, which is about one-thirtieth the price of the global companies.

In May 2012, this same Indian company named Cipla, significantly reduced the cost of three medicines to fight brain, kidney and lung cancers in India, making these drugs around four times cheaper than the originators, as per the above news report. The company reportedly wants to reduce the prices of more cancer drugs in future.

Prompted by the above steps taken by Dr. Yusuf Hamied, the Chairman of Cipla, many global players have reportedly branded him as an Intellectual Property (IP) thief, while Dr. Hamied reportedly accused them of being “Global Serial Killers” whose high prices are costing many precious lives across the globe.

In the same interview Dr. Hamied said poverty-racked India “can’t afford to divide people into those who can afford life-saving drugs and those who can’t”.

Promising future potential for low cost newer generic cancer drugs: 
 

While R&D initiatives are going on full throttle for newer and innovative drugs for cancer, interestingly over a quarter of the following 15 brands, which will go off-patent in 2013 are for cancer, throwing open the door for cheaper newer generics entry and increasing access to these medicine for a larger population of cancer patients.

Patent expiry in 2013 

Rank Brand Generic name Therapy Area Company Patent Expiry Sales US$ billion (2012)
1. Cymbalta Duloxetine Antidepressant, musculoskeletal pain Eli Lilly/Shionogi Dec 11 4.9
2. Avonex Interferon beta1a Multiple Sclerosis (MS) Biogen Idec Dec 31 2.9
3. Humalog Insulin lispro Anti-diabetic Eli Lilly May 7 2,52
4. OxyContin Oxycodone Pain Perdue August 31, 2.35
5. Rebif Interferon beta-1a Multiple Sclerosis (MS) Merck KgaA Dec 31 2.3
6. Aciphex Rabeprazole Acid-peptic disorder J&J, Eisai May 8 1.93
7. Xeloda Capecitabin
 Cancer Roche Dec 14 1.63
8. Procrit Epoetin Alfa Anemia J&J Aug 29 1.41
9. Neupogen Filgrastim Cancer Amgen, Kirin, Roche, Royalty Pharma Dec 12 1.29
10. Zometa Zoledronic Acid Cancer Novartis March 2 1.26
11. Lidoderm Lidocaine patch 5% Pain-relieving patch Endo Health Solutions/ EpiCept Sep 15 0.918
12. Temodar Temozolomide Cancer Merck, Bayer Aug 31 0.882
13. Asacol Mesalamine Ulcerative Colitis Warner Chilcott, UCB, Zeria Pharma Jul 30 0.891
14. Niaspan Niacin Anti-lipid Abbott, Teva Sep 20 0.835
15 Reclast Zoledronic acid injection Osteoporosis Novartis March 02 0.612

(Source: Fierce Pharma)

A thought:

Initiatives for faster resolution of a pressing issue like providing affordable treatment for cancer should not be put in the back burner of a longer term planning process. The issue is very real, humanitarian, here and now, for all of us. The Government is expected to display some sense of urgency through its expeditious intervention in all the four of the following treatment processes for cancer to make them affordable, if not free for the general population:

  1. Medical intervention and consultation
  2. Diagnostic tests and detection
  3. Surgical procedure and hospitalization
  4. Medicines and chemotherapy

As ‘The Lancet” study mentions, cancer in India is all-pervasive. It has no rich or poor, urban or rural or even any gender bias. It needs to be addressed in a holistic way for the benefit of all.

Conclusion: 

High incidence of cancer in India with even higher mortality rate, coupled with very high treatment cost has positioned this disease area in the eye of a stormy debate for quite some time. The naked fact that a large number of Indian population cannot afford the high treatment cost for cancer as ‘Out of Pocket’ expenditure, has made the issue even more sensitive and socially relevant in India.

Pricing issue for cancer drugs is not just India centric. Even in the developed countries, heated debate on expensive new drugs, especially, in the oncology segment is brewing up for a while. This could possibly assume a much larger proportion in not too distant future.

It is about time for also the private players to come forward and extend support to the Government in a joint endeavor to tame the destructibility and catastrophic effect of this dreaded disease on human lives, families and the society in general. Setting access improving tangible examples through Public Private Partnership (PPP) initiatives, rather than mere pontification of any kind, is the need of the hour.

If it does not happen, soon enough, willy-nilly the concerned players in this area may get caught in a much fiercer debate, possibly with a force multiplier effect, inviting more desperate measures by the Government.

Responsible pricing, for the patients’ sake, of each element of the cancer treatment process will ultimately assume a critical importance, not just for survival and progress of any business, but also to fetch pots of gold, as business return, from the ‘El Dorado’ of ‘Oncology Segment’ of India.

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.

Will the ‘Bayer–Cipla case’ now put the ‘Bolar Provision’ under judicial scrutiny?

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To enable the domestic pharmaceutical industry gaining a critical mass and cater to the pressing healthcare needs of the nation, in 1970 product patent act was abolished by the government of India. This immensely helped the domestic companies to launch the generic version of innovative medicines at a very low price, making those drugs quite affordable to a large section of the population.
Cost and process efficiencies helped the Indian pharma companies to reach out:

Quickly acquired cost and process efficiencies of the domestic generic pharma companies soon made India a power to reckon within the global generic pharmaceutical industry. Besides fueling the domestic demand of the essential medicines in general and these drugs in particular, the domestic pharma players soon commenced exports of these cheaper but high quality medicines to non-regulated and the least developed countries of the world to cater to their affordable healthcare needs.

India played a key role in combating HIV-AIDS in Africa:

In that process, India also played a critical role to ensure that HIV-AIDS drugs are available to the poor and down trodden in Africa in general and sub-Saharan Africa in particular, at an affordable price.

A paradigm shift:

On January 1, 2005, India stepped in to a new paradigm with re-enactment of the product patent act in the country, which is widely believed to be TRIPS compliant. This consequently ushered in a transition within the Indian pharmaceutical industry from the mindset of an ‘imitator’ to the prestigious status of an ‘innovator’, which ultimately drives the wheel of progress of a nation.

The voice of concern:

At the same time and for the same paradigm shift many expressed their grave concerns about the role that the domestic generic pharmaceutical industry will play in the new paradigm to continue to make cheaper but quality modern medicines available not only to a large section of the Indian society, but also to the needy patients of non-regulated and least developed countries of the world.

TRIPS safeguard provisions:

Although minimum standards of patent protection that patent holders should get have been articulated in TRIPS, it also very clearly specifies three very important public health safeguard provisions simultaneously, which will allow any participating country to utilize these during such types of needs.

These three TRIPS public health safeguard provisions are as follows:

A. Compulsory Licensing:

- There is nothing in TRIPS, which can limit the authority of the government, in any way, to grant compulsory licensing of a patented product for public health safeguard.

B. Parallel importing:

- TRIPS clearly indicates that under WTO dispute settlement body parallel imports cannot be challenged, if there is no discrimination on the patent holders’ nationality.

AND

C. Bolar Provisions

The Bolar Provision:

To enable the generic players launching new molecules at a much cheaper price, the Patent Act 2005 provides for exceptions to the patentee’s exclusive rights under Article 30 of TRIPS, as ‘Bolar Provisions’ in its section 107A(a):

“any act of making, constructing, using, selling or importing a patented invention solely for uses reasonably related to development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product.”

This section provides an exemption from patent infringement to the generic manufacturers from producing and importing patented drugs for research and development, related to submission of information for regulatory approvals of generic versions of patented products before the original patents expire. The legislative intent of this section is to ensure that the generic versions of patented products are ready with necessary regulatory approval for market launch, immediately after the innovator products go off patent, rather than going through a long rigorous process of getting the regulatory approval only after expiration of the patent term.

Is the Section 107A now under judicial scrutiny?

This section may be unfairly used by some generic manufacturers, soon after the launch of products patented in India, for unfair commercial reasons. The final judgement on Bayer–Cipla case on Nexavar may throw some light on this important provision. It is quite possible that because of this reason Delhi High court has ordered Cipla to seek the High Court’s permission before market launch of the generic version of Bayer’s patented product.

Conclusion:

Although there is nothing wrong in using a patented molecule for getting regulatory approval with a genuine intent to launch the generic version after the original product goes off patent, it now appears that in absence of Regulatory Data Protection (RDP) both against disclosure and unfair commercial use, this section may most likely to be abused more by some generic players with mala fide commercial interest.

By Tapan 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.