Tag Archives: innovation

A brief history of the Indian Patent System from Indian Pharmaceutical Industry perspective, the concerns and opportunities.

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Although a comprehensive Act on Patents and Designs allowing product patents of drugs came into force in India in 1911, the first Patents Act of India was enacted in 1856.This Act gave a head start to the global pharmaceutical companies in this business primarily through imports into India. As a result, in no time the global pharmaceutical companies curved out a sizeable chunk of the Indian pharmaceutical market capturing over 80% of the total domestic consumption of drugs and pharmaceuticals.It has been reported that in 1959 an American Senate Committee headed by Senator Kefauver wrote in its report:

“…in drugs, generally, India ranks amongst the highest priced nations of the world”.

In 1970 the Indian Patents Act was amended abolishing the product patent system, based on ‘Ayyangar Committee report, 1959’, which examined the factors influencing the high prices of the drugs and pharmaceuticals in India and concluded:

“.. high prices resulted from the monopoly control foreign based pharmaceutical companies exercised over the production of drugs.”

The Indian Patent Act of 1970 was, once again, amended under the TRIPS agreement and the Indian Patents Act, 2005 came into force effective January 1, 2005 , re-introducing product patents for the drugs and pharmaceuticals, as a part of the globalization process of the country including the pharmaceutical industry of India.

This is perhaps the testimony of India’s realization that research and development is the bed rock for the progress of pharmaceutical industry in any country in the long run, as this industry, unlike many other industries, relies quite heavily on product patents.

Indian Pharmaceutical Industry to build on its acquired strength:

Reverse engineering with high calibre skills in process chemistry emerged as one of the key strengths of the domestic Indian pharmaceutical industry since 1970. The industry has to build on this strength and move towards ‘incremental innovation model’ of R&D, which is less expensive and more cost effective starting with a known substance, to meet the unmet needs of the patients.

The product patent regime has given a boost to pharmaceutical R&D in India:

Many medium to large Indian pharmaceutical companies, like Ranbaxy, Dr Reddy’s Lab (DRL) and Glenmark etc. have already started shifting their focus on R&D. The large number of patent applications filed by these companies to the Indian patent offices will vindicate this point. As a result of the new focus, one observes business initiatives like, spinning off the R&D units into a separate company and many R&D driven mergers and acquisitions by these domestic Indian companies.

R&D investments are also being made in traditional chemistry based screening. Moreover, companies like Biocon, Panacea Biotech, and Bharat Biotech etc. have engaged themselves in the space of biotechnology research.

Increasing opportunity to collaborate with the global companies:

Increasingly more and more Indian companies have started collaborating with the global companies in collaborative research and cost efficient process development to leverage their human capital and infrastructural facilities. The collaborative arrangement towards this direction between GSK and Ranbaxy provides a good example.

Contract research and manufacturing:

Some other domestic companies like Divi’s Lab, Suven Pharma, Dishman Pharma, Piramal Healthcare, Shasun Chemicals, Jubilant Organosys etc. are moving into the space of contract research and manufacturing services (CRAMS) establishing world class facilities and collaborating with the global players like, GSK, Pfizer, Merck, Eli Lilly, Bayer, Sanofi Aventis, Novartis etc.

Public-Private Partnership (PPP) in R&D:

Initiatives by the Indian companies in collaborative research with government research institutes like CSIR and NIPER have already commenced, though much lesser in number. Some companies like, Shasun have already derived benefits in the field of biotechnology out of such collaborative research under PPP. It is expected that more such projects will see the light of the day in not too distant future.

Some concerns in the new regime:

Some serious concerns are being raised as the country is in the process of settling down in the new paradigm. The key concern is about the affordability of patented products by those who are currently having access to other modern medicines.

To address such concerns related to public health issues in general, there are already provisions in the TRIPS agreement for price control of patented products.

At the same time, one finds, the government has exempted those patented products from price control, which are domestically produced with indigenous R&D. Many feel that these differential measures will not help improving affordability and access to such patented medicines by the common man.

Keeping prices of essential medicines under the lens of price regulator is more important:

Even over last sixty years of independence, the access to modern medicines in India is meager 35 percent. 65 percent of the nation’s population does not have any access even to off patent essential drugs. In a country like India where there is no adequate social security cover towards healthcare, it will be important to keep the prices of essential medicines for treating common diseases under the close vigil of the drug price regulator.

Will the prices of medicines spiral in the product patent regime of India?

While addressing this question one will need to keep in mind that around 98 percent of drugs, which are generic or branded generic, manufactured in India and costs cheaper than their equivalents available even in our neighbouring countries like Pakistan, Bangladesh and Sri Lanka, will continue to remain unaffected. Hence, it is very unlikely that prices of such medicines will go up significantly because of the new product patent regime in India.

Conclusion:

The key concerns raised in the new product patent regime are that it will further deteriorate the current poor access to modern medicines to a vast majority of the population.

It is undeniable that one of the key reasons for poor access to essential medicines in India is lack of buying power of a large number of both rural and urban poor. This problem gets compounded by the poor public health infrastructure, delivery system and financing system, despite sporadic initiatives taken by the government towards this direction.

To be successful in the new regime by improving access to modern medicines to those who do not have means to satisfy such basic needs, the country should take a rational and holistic approach in this matter. It is high time for all the stakeholders to ponder and flesh-out the real factors, which have been responsible for such a dismal rate of access to modern medicines to a huge 65 percent of the country’s population over decades, even when the product patent law was not in place in the country.

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

Recent Bayer Case Judgment: Patent Linkage: Encouraging Innovation in India

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Delhi High Court turned down the request of Bayer Corporation in August 18, 2009 to link patent status of its kidney cancer drug Nexavar (sorefenib tosylate) with the marketing approval of the generic equivalent of the same patented molecule manufactured by Cipla, during the patent life of Nexavar in India.Bayer received an Indian patent for Nexavar in March 2008, which is one of the potential blockbuster drugs of Bayer Corporation and is expected to clock an annual global sales turnover of around U.S $1 billion soon.In this particular case, Bayer argued that an approval for its generic equivalent from Cipla would infringe on their patent.

The interim and the final judgment of the Delhi High Court:

Honorable Delhi High Court granted an interim injunction in response to the petition filed by Bayer Corporation and refrained the Drug Controller General of India (DCGI) from granting marketing approval of the generic version of sorefenib tosylate of Cipla, until the final order is passed by the Court.

In its final judgment, the Delhi High Court ruled that Bayer should not have brought this case to the honorable court as the drug regulation is not linked to patent rights in India.

Further, the court could not, “conclude that unpatented drugs are spurious drugs” and said, “this court is constrained to observe that the present litigation was what may be categorized as speculative foray, and attempt to ‘tweak” public policies through court mandated regimes.”

Besides, the honorable Court has asked the Bayer Corporation to pay Rs 6.75 lakh to the Government and Cipla as legal costs.

Will this High Court ruling encourage more such incidence in India?

Some experts feel that the Delhi High Court ruling may encourage generic pharmaceutical companies to launch generic versions of patented drugs in India despite the risk of paying damages, if patent infringement is proved in a court of law.

Keeping all these in view, let us now discuss the relevance of Patent Linkage in India.

What really is a patent linkage?

The process of Patent Linkage establishes a desirable communication process between the Health Ministry and the Patent Offices to prevent marketing approval of generic drugs before expiration of patents granted in India.

It also ensures that one Government Department / Ministry does not impair the efforts of another Government Department / Ministry to provide effective intellectual property protection as required by Article 28 of the WTO TRIPS Agreement.

However, the generic companies argue that the role of the DCGI is restricted to regulating safety and efficacy of the drugs, whereas ascertaining patent status of products fall within the ambit of Indian Patent Offices. Thus these two cannot be linked.

The argument in favour of a robust Patent Linkage system:

1. WTO TRIPS Article 28.1a says that the member countries agree to ensure exclusive rights to patent holder for a specific time period. In case of India, like most other countries, this time period is for 20 years.

2. During this period the member countries agree to prevent third parties from making, using, offering for sale the patented product without the owner’s consent.

3. In India there is no known strong deterrent for patent infringement. In absence of which, the opportunity to make significant commercial gain through patent infringement, on the pretext of extending benefits to patients could indeed be, many a times, difficult to resist.

4. Media reports that the National Pharmaceutical Pricing Authority (NPPA) has raised huge demand in crores of rupees for overcharging the common man, flouting the drug pricing norms, by some of these large companies involved in patent infringement litigations, vindicates the point of their basic overall intention of significant commercial gain over extending pricing benefits to the common man.

Who is responsible to ensure the sanctity of the product patent system in India?

1. The prevailing situation warrants a strong regulatory system, which could prohibit marketing approval of generic equivalents of patented molecules during their patent period.

2. The question that is often raised in this context is who exactly be held responsible for implementation of such a system in our country? While addressing this question one should realize that it is the Government in its entirety and not just the Patent offices or any particular ministry or ministries of the Governments is bound by the WTO TRIPS Agreement. Therefore, it is justifiably the responsibility of all Government departments/ministries to ensure that TRIPS obligations of the Government on proper enforcement of patent are properly met.

3. The process of granting marketing approval for patented molecules, in general, rests on the Ministry of Health (MoH) of WTO member states. Thus for WTO member states to meet TRIPS obligations effective communication between the MoH and the Patent offices of the country is absolutely essential. Such a system will help prevent approval of generic versions of patented molecules before expiration of the product patents.

4. Establishing this communication process will ensure that one department/ministry of the Government (say DCGI) does not impair the efforts of another Government department/ministry (say IPOs) to provide effective intellectual property protection as articulated in Article 28.1 of the WTO TRIPS Agreement.

5. This system will ensure that Health Regulatory Authorities do not, even unintentionally, undermine the commitment of the Government to conform to the TRIPS Agreement.

Will India be the unique country if such a system of “Patent Linkage” is put in place?

The answer is obviously ‘no’. The system of Patent Linkage exists around the world.

Following are some examples:

Australia – Health Authorities do not provide marketing approval for a generic copy which would infringe an existing patent.

Brazil – As of 2006, no copies of products still under patent have been launched in the market place. However, the Brazilian Health Agency (ANVISA), grants registration to copy products, based only on the merits of the case from the regulatory point of view, whether or not a patent has been granted for the same.

Canada – Health Regulatory Authorities do not provide marketing approval for pharmaceutical products protected by patents listed in the equivalent of the US FDA Orange Book.

China – The State Food & Drugs Administration (SFDA) must be satisfied that no patent is being infringed before it will issue marketing approval. If there has been litigation over a patent, SFDA will wait until the appeals process has been exhausted before acting.

Jordan – Marketing approval for a pharmaceutical product is not permitted during the period of patent protection.

Mexico – Applicants seeking marketing approval for generic pharmaceutical products in Mexico must certify that their patent rights are not infringed. The Health Regulatory Authorities then check with the Patent Office, which must respond within ten days to confirm whether a patent is involved. While Health Authorities will accept an application of marketing approval during the patent period, grant of marketing approval will be delayed until the patent expires.

Singapore – Applicants seeking marketing approval for generic pharmaceutical products in Singapore must declare that the application does not infringe any patent.

U.A.E – The Health Regulatory Authorities do not provide marketing approval for pharmaceutical products that remain under patent protection in the country.

U.S.A – U.S. FDA maintains a listing of pharmaceutical products known as the Orange Book. The Electronic Orange Book is also available via the internet at: http://ww.fda.gov/cder/ob The U.S. FDA does not authorize the marketing approval for a generic copy of a pharmaceutical product protected by a patent listed in the Orange Book.

Europe – Instead of Patent Linkage, the period of data exclusivity is for 10/11 years.

The Patent Linkage System is in progress in countries like Bahrain, Chile, Dominican Republic – Central America FTA (DR-CAFTA), Morocco and Oman.

Conclusions:

I therefore submit the following recommendations to ensure proper enforcement of products patent in India:

 The status of the grant of patent should be reviewed, through appropriate drug regulatory mechanism, before granting marketing permission to generic formulations and if the concerned innovative product is already patented in India, marketing permission for the generic formulation should be withheld.

 Appropriate mechanism/system should soon be worked out in co-ordination with other Ministries to avoid cases of infringement of product patents in India.

 The procedure (Patent Linkage) of checking the patent status of a product before granting marketing approval already exists in the Form 44. This procedure needs to be effectively implemented soon to encourage innovation in India.

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.

The Government of India accepts the Mashelkar Committee Report on ‘Incremental Innovation’ – what does it really mean?

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‘The Mashelkar Committee’ re-submitted its report in March 2009, which primarily deals with incremental innovation related to Pharmaceuticals Research.The conclusion of the report on the incremental innovation reads as follows:“It would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only, since it prima facie amounts to a ‘statutory exclusion of a field of technology”.

Government accepts the Mashelkar committee Report:

It has now been reported that the Government has accepted this revised report, last week. With this the questions raised in the raging debate, whether incremental innovation is TRIPS compliant or not have possibly been answered well, beyond any further doubt.

The acceptance of this report by the Government further vindicates the point that all patentable innovations are not “eureka type” or “path breaking”. Innovation is rather a continuous process and more so in pharmaceuticals. Such type of innovation in the pharmaceutical industry is quite similar to what one observes in the IT industry, where incremental innovation based on existing knowledge is more a norm than an exception. With incremental innovation not just efficacy of a product, but many other important unmet needs of the patients like safety, convenience and ease of administration of the drugs can be successfully met.

Thus innovations whether “path breaking” or “incremental” in nature, need to be encouraged and will deserve patent protection, if they are novel, have followed inventive steps and are industrially applicable or useful.

R&D based Indian Pharmaceutical industry gains considerably:

Many Indian Pharmaceutical Companies have already started working on the ‘incremental innovation’ model. Appropriate amendment of section 3(d) of the Indian Patents Act 2005 will thus help all concerned – the patients, the industry and other stakeholders, as long as the prices of such medicines do not become unaffordable to majority of the population for various reasons. In any case, the Government has the law available within the patents Act to deal with any such situation, if arises at all.

Does section 3(d) warrant an amendment now?

Mashelkar committee categorically observes the following:

1. “It would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only, since it prima facie amounts to a statutory exclusion of a field of technology”, as stated above.

2. “Innovative incremental improvements based on existing knowledge and existing products is a ‘norm’ rather than an ‘exception’ in the process of innovation. Entirely new chemical structures with new mechanisms of action are a rarity. Therefore, ‘incremental innovations’ involving new forms, analogs, etc. but which have significantly better safety and efficacy standards, need to be encouraged.”

Thus, taking these recommendations together will the DIPP now finally conclude that Section 3(d) of the Patent Acts 2005 is not TRIPS compliant and recommend necessary amendments, accordingly to satisfy the needs of the Research based pharmaceutical industry?

Wait a minute – wait a minute:

The report also suggests:

1. “The Technical Experts Group (TEG) was not mandated to examine the TRIPS compatibility of Section 3(d ) of the Indian Patents Act or any other existing provision in the same Act. Therefore, the committee has not engaged itself with these issues.”

Will this comment make the Government conclude that Section 3(d) is TRIPS compliant, which includes ‘incremental innovation’ in general, however, with the rider of ‘properties related to significant improvement in efficacy’?

2. “Every effort must be made to provide drugs at affordable prices to the people of India”.

What will these efforts mean and how will these be implemented by the Government?

3. The TEG also recommends, “every effort must be made to prevent the practice of ‘ever greening’ often used by some of the pharma companies to unreasonably extend the life of the patent by making claims based sometimes on ‘trivial’ changes to the original patented product. The Indian patent office has the full authority under law and practice to determine what is patentable and what would constitute only a trivial change with no significant additional improvements or inventive steps involving benefits. Such authority should be used to prevent ‘evergreening’, rather than to introduce an arguable concept in the light of the foregoing discussion (paras 5.6 – 5.8 and paras 5.12 – 5.29) above of ‘statutory exclusion’ of incremental innovations from the scope of patentability.”

Will the Government (mis)interpret it as a vindication of Section 3(d), which does does not mean “statutory exclusion of incremental innovations from the scope of patentability” but has just made necessary provision within this section “to prevent the practice of ‘ever greening’ often used by some of the pharma companies to unreasonably extend the life of the patent by making claims based sometimes on ‘trivial’ changes to the original patented product”, as recommended by the Mashelkar Committee?

Conclusion:

In the re-submitted report of the Mashelkar committee, the TEG has made quite a few very profound comments, recommendations and suggestions, the implications of all of which are important to all the stakeholders in various different ways. Will the acceptance of this report, as a whole, by the Government and subsequent attempt by the authorities for its implementation both in the letter and spirit, will amount to “chasing a rainbow”, as it were?

Only time will us, how this “satisfy all” zig-saw-puzzle gets solved in future.

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.

Revised Mashelkar Committee Report recommends inclusion of ‘incremental innovation’ under patentability criteria.

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In 2006, the Government of India appointed a Technical Expert Group (TEG) chaired by the eminent scientist and the then Director General of the Council of Scientific and Industrial Research (CSIR) Dr. R.A. Mashelkar, with the following terms of reference:1. Whether it would be TRIPS compatible to limit the grant of patent for pharmaceutical substance to new chemical entity or to new medical entity involving one or more inventive steps.2. Whether it would be TRIPS compatible to exclude micro-organisms from patenting.The TEG submitted its report to the Government on December 29, 2006. However, due to some ‘technical inaccuracies’ Dr. Mashelkar sought the permission of the Government on February 19, 2007 “to re-examine and resubmit the report, which meets with the requirements of the highest standards’’. This request was acceded by the Government on 7th of March 2007.

Much water had flown down the bridge thereafter, which we shall not deliberate upon here. Ultimately in March 2009 the TEG submitted its revised report.

In terms of overall content, the revised report is similar to the previous one, which was withdrawn earlier.

Conclusions of the revised TEG report:

The conclusions of the report against the terms of references given to the TEG are as follows:

1. “It would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only, since it prima facie amounts to a ‘statutory exclusion of a field of technology’. However, every effort must be made to provide drugs at affordable prices to the people of India. Further, every effort should be made to prevent the grant of frivolous patents and ‘ever-greening’. Detailed Guidelines should be formulated and rigorously used by the Indian Patent Office for examining the patent applications in the pharmaceutical sector so that the remotest possibility of granting frivolous patents is eliminated.”

2. “Excluding micro-organisms per se from patent protection would be violative of TRIPS Agreement.”

Does section 3(d) warrant an amendment now?

It is indeed interesting to note that under Para 5.11 the TEG says, “the committee was not mandated to examine the TRIPS compatibility of Section 3(d) of the Indian Patents Act or any other existing provision in the same Act. Therefore, the committee has not engaged itself into these issues.”

However, in Para 5.32 the report observes the following:

“Innovative incremental improvements based on existing knowledge and existing products is a ‘norm’ rather than an ‘exception’ in the process of innovation. Entirely new chemical structures with new mechanisms of action are a rarity. Therefore, ‘incremental innovations’ involving new forms, analogs, etc. but which have significantly better safety and efficacy standards, need to be encouraged.”

With this observation, TEG has also clarified the scope of section 3(d), indirectly though.

The report further recommends, “detailed Guidelines should be formulated and rigorously used by the Indian Patent Office for examining the patent applications in the pharmaceutical sector so that the remotest possibility of granting frivolous patents is eliminated.”

What next?

It will be interesting to watch what the Department of Industrial Policy and Promotion (DIPP) does with this revised report. As we have seen that the report categorically states:

“It would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only, since it prima facie amounts to a statutory exclusion of a field of technology”

And

“Innovative incremental improvements based on existing knowledge and existing products is a ‘norm’ rather than an ‘exception’ in the process of innovation. Entirely new chemical structures with new mechanisms of action are a rarity. Therefore, ‘incremental innovations’ involving new forms, analogs, etc. but which have significantly better safety and efficacy standards, need to be encouraged.”

Therefore, taking these two recommendations together my questions are as follows:

1. Will the DIPP conclude that Section 3(d) of the Patent Acts 2005 is not TRIPS compliant?

2. If so, will the DIPP recommend an amendment of this section sooner to encourage ‘incremental innovation’ within the country?

3. If not, will the DIPP clarify now the need, purpose and the importance of this report?

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.

Innovation, IPR and Indian Pharmaceutical Industry – a growth formula is brewing.

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Innovate or perish:Many of us expect that ‘tomorrow’ will be a ‘mega today’ and prefer to run our business more or less the same way, as what we are doing today. At the same time the global market keeps us sending, in very small measures though, but definite and continuous signals of change. As we move on, we realize that ‘tomorrow’ will not be a ‘mega today’, just as ‘today’ is not a ‘mega yesterday’. To meet such challenge of change squarely and realistically, we need to embrace a culture of ‘continuous innovation’.Therefore, the name of the game, while competing within the globalised economy is “continuous innovation”. An innovation, as we know, is more than a novel idea. It is, in fact, the process of translating the novel idea into reality.

Like other industries, the pharmaceutical industry in India will also have to innovate with cutting edge ideas, convert them to innovative and implementable business models, which in turn would help these companies to remain competitive in the market place. The innovation, which I am talking about, extends beyond Intellectual Property Rights (IPR).

While innovation is an absolute must to remain and grow the business, having patented products and marketing these brands effectively are desirable and not a ‘must do’ in the pharmaceutical industry of India.

Many would like to ‘stick to knitting’ and innovate:

Indian Pharmaceutical Industry is now an internationally acclaimed player in process development, contract research, manufacturing and domestic marketing skills. The Government of India created this environment for the industry through amendments of the Indian Patents Act 1970.

During post product patent regime in India, there is no dire need for the entire domestic industry to shift its focus from world class process development skills to new molecule development skill. On the contrary, the strengths acquired by the domestic industry in such skill sets should be further honed, to utilize benefits from opportunities that arise out of basic R&D processes. Some of these are collaborative activities with the multinational companies (MNCs) to create a win-win situation in areas like, contract research, clinical development, contract manufacturing and domestic marketing of in-licensed products.

The domestic pharmaceutical industry should therefore adopt strategies like manufacturing off patent products, like recent collaboration between Aurobindo Pharma and Pfizer, Jubilant Organosys with French company Guerbet, for distribution of its nuclear medicine products in Europe. ‘Financial Express’ dated March 13, 2009 reported “Eli Lily seeks partner for Indian TB initiatives.

Such opportunities will keep on coming, may be more frequently and more in number, especially when global innovator companies take more interest in the generic pharmaceutical business, like, Novartis, Daiichi Sankyo, GlaxoSmithKline, Sanofi Aventis etc.

To grab such opportunities, the strategy of ‘stick to the knitting’ with continuous innovation is expected to help the domestic pharmaceutical companies immensely.

IPR regime – emerging opportunities:

Discovery Research:

While above approach will help many small and medium sector enterprises, many large pharmaceutical companies and research boutiques in India are investing significantly to discover New Molecular Entities (NMEs). It has been reported that by 2011, at least two Indian pharmaceutical companies are planning to launch their NMEs.

Biotech Research:

Research in the field of Biotechnology is rapidly evolving, especially in the areas of diagnostics, vaccines, cellular and molecular biology. It is heartening to note that for doing stem cell research National Institute of Health, USA, identified Reliance Life Sciences in Mumbai and the National Institute of Biological sciences in Bangalore to receive state funding from the USA. Both these two organizations entered into contracts to supply embryonic stem cells to the US based researchers. Moreover, in the field of ‘Biometrics’ raw clinical data are now being transmitted to the specialists in India for their scientific evaluation.

It has been reported that in the developing countries of the world malaria afflicts about 300-500 million population and kills 1-3 million of them. Malaria also allows some fatal genetic illnesses, like sickle cell anaemia to thrive in the gene pool. Hence a vaccine developed for this disease through Indian biotech initiatives, would indeed be a great boon for the developing countries of the world.

Industry – Academia Collaboration:

In the Western countries, close collaboration exists between the industry and academic institutes in the field of Pharmaceutical Research. Such type of collaboration has now started developing in India too, where Council of Scientific and Industrial Research (CSIR) is playing major role.

An effective collaboration between the pharmaceutical industry and the academia will ensure productive use of research talents where both the parties will draw benefits. The research done by the CSIR, Indian Institute of Technology (IITs), Indian Institute of Science and various universities is expected to throw open new avenues of collaboration and partnership between industry and Academia.

Benefits of Technology Transfer and increased Foreign Direct Investment (FDI):

The new product patent regime is also expected to facilitate flow of technology and foreign direct investment in India with adequate patent enforcement mechanism being put in place. Inadequate patent and regulatory data protection are considered by the developed nations as the key barriers, which restrict the flow of both technology and foreign investments.

In these areas, India mainly competes with China and Brazil, besides other emerging markets. Degree of patent and regulatory data protection in each of these countries will eventually decide who will emerge as a winner in these fields.

The issue of ‘Access to New Innovative Patented Drugs’:

Innovative pharmaceutical products patented in India will facilitate access to the latest modern medicines to Indian population. Such medicines will help to meet the unmet needs of the ailing population. Many multinational companies like, Merck, GlaxoSmithKline (GSK) have already announced a differential pricing mechanism for such medicines in the developing countries.

Moreover, to improve access of such medicines to the common man, the Government of India should have robust plan to purchase these medicines, at a negotiated price, for supply to Government Healthcare Units

Improving ‘Access to affordable modern medicines’ – a challenge to the nation

There are three key elements to improve access to affordable medicines to a vast majority (650 million) of Indian population:

1. Healthcare infrastructure and delivery
2. Healthcare financing
3. Procurement price of these medicines at the Government Healthcare units

Price of patented products will not have any impact on existing medicines available in the market. However, the reality is, price regulation in some form will continue to play a key role in India. The long overdue new Drug Policy of India is now expected to come only after the new Government takes charge, post General Election of the country. The new policy is expected to articulate the details on this important subject both for patented and generic medicines, in India.

A determined and focused approach of the Government on the above three elements would effectively address the key healthcare issues of India.

Small Scale Enterprises in India – expecting large scale consolidation:

In India over 70% of the small-scale units, within the pharmaceutical industry, currently operate as contract manufacturers, either for the domestic or multinational companies. These small scale units with their low operating cost ,make the contract sourcing model an attractive proposition. Many of these small scale enterprises, are mostly catering to the export business in non-regulated markets.

The demand for high quality standard by the drug regulatory authorities of various countries is fast increasing. It is, therefore, essential for these units to make significant investments to qualify for such stringent quality requirements. Some units would be able to invest enough to meet such regulatory standards. However, the cost of production for those units, which will invest towards facility up gradation is expected to increase significantly, leading to fierce cut throat competition. In a situation like this, we can expect to witness a large scale consolidation process within the industry.

Intense competition from China – cannot be ignored:

Globalisation of the markets could lead to significant dumping of products in different countries. Such a situation may adversely affect the cash flow of business, making the domestic industry highly vulnerable. Currently, Indian manufacturers are facing intense competition from China, in Pharmaceutical Intermediates (PI) and Active Pharmaceutical Ingredient (API) segments. This is mainly because China has a much better economies of scale in manufacturing, which gives them a pricing edge over their Indian counterparts.

PI and he API manufacturers in the small scale enterprise segments of India have already been very adversely impacted, leading to closure of many units in various states like, Andhra Pradesh, Karnataka and Gujarat.

Conclusion:

The issue of a robust world class patent regime in India has sparked off an intense debate with a heavy dose of acrimony. The key areas of concern of various stakeholders are as follows:

1. General public: inadequate access of affordable modern medicine to the common man
2. Domestic generic industry: overall industry growth and to some extent its survival
3. The Government of India: combination of 1&2

After many years of tough resistance mainly from the domestic generic pharmaceutical industry, in January 1, 2005, India re-entered into the pharmaceutical product patent regime. In this article, I have tried to give a snapshot of this new regime, for a quick reading.

Despite tough competition from China and increased possibility of consolidation within small scale pharmaceutical units, overall emerging scenario in India is indeed encouraging. Imbibing innovation culture and with the opportunities available in the new IPR regime, Indian pharmaceutical industry, I believe, will be able to catapult itself to newer heights of global success.

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.

The stormy debate on wrongful grant of pharma product patents – a countdown of the news events, for a quick perspective.

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To give a quick perspective to this debate, I reckon, a countdown of five reported news events on the subject will be helpful. I start from February, 2009 and gradually go one year back, to February, 2008, to capture the key elements of this stormy debate. Finally, I move to ‘ground zero’ to explore the basic remedial measures to effectively address the issue.Event 5‘The Economic times’ (ET) dated February 24, 2009 reported an interesting news item titled, “Dichotomy between patent law and practice”. The timing of this article, with its various quotes, highlighting the following points, evokes interest:

1.“Indian patent authorities are virtually not following the spirit of the Sections 3(d) and 3(e)”.

2.“A large number of patents granted in India since 2005 pertain to products first patented in 1970s, 1980s, and 1990s, most of which were launched in Indian markets long before 2005, the year of introduction of product patenting in the country”.

3.“The patent applicants are not making adequate disclosures, making it difficult for potential challengers to file post-grant objections which the law provides for. Since the International Non-proprietary Name (INN) is not of the drug is often not given along with the Title of the Patent, it is cumbersome for anyone to trace the patent to the original PCT (Patent Cooperation Treaty) application and have an idea about how new it is”.

4.“Many law firms refuse to take briefs from Indian companies, because their multinational clients do not permit them to do so! The result— post-grant objection facility is not effectively used by Indian companies.”

Why are these observations interesting?

These observations are interesting because for point number 1 to 3, as stated above, following three recourses are available to all:

1. After publication of the patent applied for, in the patent journal, one can file a pre-grant opposition.

2. Assuming that someone has missed this opportunity, the provision for filing post grant opposition will still be there.

3. Assuming that both the opportunities have been missed due to some reasons and one could not understand the details of the patent applied for, during the patent granting process, the opportunity of going to a Court of law with a request to make such patents (which have violated section 3.d) invalid, will still exist.

It is indeed very difficult to understand why such measures are not being taken by the aggrieved parties, as specified in the law.

Point number four is even more difficult to understand. When lawyers are available to the domestic companies to defend alleged patent infringement, why then lawyers will not be available to them to take such objections to a court of law?

Event 4

Mint dated October 7, 2008 in its article titled; “Cozy deals and conflicting interest mark patent granting process” reported the following:

“There are even local and multinational corporates who ‘seek’ help of examiners and controllers to get their applications drafted, thereby ensuring a grant for a price”.

Event 3

‘The Economic Times’ dated July 1, 2008 reported in its article titled, “Cipla gets patent for Nexium, Fosamax modified versions” that Mumbai Patent office granted these two patents to Cipla in April, 2008 for new forms of two well known blockbuster drugs, Esomeprazole (Nexium of Astra Zeneca) and Alendronate (Fosamax of Merck). This news came as a big surprise because Cipla is well known for its continuous accusation to innovator companies for trying to extend ‘monopoly’ period by ever-greening patent through similar means. The report, therefore, raised a very valid question, whether Cipla has ‘walked the talk’ in India? It will be interesting to know on what basis Cipla managed to overcome the ‘efficacy’ barriers under section 3(d).

On this ET report, well known IPR expert Shamnad Basheer wrote the following in his blog dated July 6, 2008:

“Reading the ET piece, Nathan Evans of Finnegan Henderson, who’s a very astute commentator on the Indian patent scene and has written a couple of articles in this regard posed this question to me:

“This makes me wonder if the patent office in India will apply the laws less strictly to Indian pharmas than MNCs (kind of like they apply the patent laws more strictly for essential medicines)”

Shamnad Basheer concluded his comment on this subject with the following observations:

“How ought section 3(d) to be interpreted when our very own generic manufacturers are applying for supposedly “incremental” inventions?”

Event 2

According to Federation of Indian Chambers of Commerce (FICCI) report dated March 7, 2008, FICCI and the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry have joined hands to set up a working group to improve Intellectual Property regime in India.
It will be interesting to know the view of this joint working group between the Government and the Industries, in this matter. I have not read anywhere any comments of this important working group on such matter, so far.

Event 1

‘Thomson and Reuters patent focus report’ dated February, 2009 observed absence of clear guidelines (Manual of Patent Practice and Procedure) about some of the complex provisions of patent law, particularly section 3(d). The report indicated that there should be clarity on what would qualify as “enhanced efficacy” under section 3(d) so that it can help the patent examiners to clearly make out which patent applications would fall under section 3(d).

Ground Zero:

Let us now try to ponder, realize and fathom the core issue of this problem, which lies at the ‘Ground Zero’. Thus far we have been reading constant allegations about the functioning of Indian Patent Offices and even on their integrity and honesty.

In absence of a well drafted, long overdue, Patent Manual, all concerned, including patent examiners will have their own ways of looking into “enhanced efficacy”. In such a situation, I shall not be surprised if the Patent Examiners suffer from the dilemma as to what exactly will constitute “enhanced efficacy”.

Protracted debate with the stakeholders on the ‘draft patent manual’ appears to be over now. The last stakeholders’ meeting on this subject was concluded in Kolkata following Delhi, Mumbai and Bangalore, several months ago. However, the final Patent Manual is still not in place, which has been kept for public inspection since 2005.

To address this stormy debate, in my view, we need to:

1. Push for expeditious release and implementation of the Patent Manual (Manual of Patent Practice
and Procedure).

2. Let FICCI – DIPP working group work more effectively and cohesively for better functioning of the
new IPR (Intellectual Property Rights) regime.

3. Let ‘capacity building’ exercise at the Indian Patent office (IPO) continue with greater speed.

Mere accusation and constant bashing of the IPOs, as we now see around, may not yield much result. After having taken the above measures, if similar dissatisfaction in any quarter still remains, let law take its own course. Despite great apprehensions by some, as quoted above under point 1, never mind, enough lawyers will be available to fight such cases.

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.

On ‘Patent Linkage’ – a rational argument on an emotive debate

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WTO TRIPS Article 28.1a says that the member countries agree to ensure exclusive rights to patent holder for a specific time period. In case of India, like most other countries, this time period is for 20 years.During this period the member countries agree to prevent third parties from making, using, offering for sale the patented product without the owner’s consent.In India, during last twelve months, at least 4 patents were infringed by the local generic companies. All these cases are currently under litigation. No one at this stage will possibly be able to hazard a guess as to when will these cases ultimately get resolved. If it takes another two to three years to get the final verdict from the honourable High Courts, the revenue of the innovator companies who have already launched their patented products in India will get shaved off, at least for this period, leaving a very adverse commercial impact on them. There is a theoretical possibility that it may take even more time for the honourable High Courts to resolve these cases and during the remaining period of limited patent life of these products the cases may not get resolved, at all.

Moreover, in India there is no known strong deterrent for patent infringement. In absence of which, the opportunity to make significant commercial gain through patent infringement, on the pretext of extending benefits to patients could indeed be, many a times, difficult to resist. Media reports that the National Pharmaceutical Pricing Authority (NPPA) has raised huge demand in crores of rupees for overcharging the common man, flouting the drug pricing norms, by some of these large companies involved in patent infringement litigations, vindicates the point of their basic overall intention of significant commercial gain over extending pricing benefits to the patients. The moot question that follows is who is responsible to ensure the sanctity of the product patent system in India?

The prevailing situation warrants a strong regulatory system which could prohibit marketing approval of generic equivalents of patented molecules during their patent period.

The question that is often raised in this context is who exactly be held responsible for implementation of such a system in our country? While addressing this question one should realize that it is the Government in its entirety and not just the Patent offices or any particular ministry or ministries of the Governments is bound by the WTO TRIPS Agreement. Therefore, it is justifiably the responsibility of all Government departments/ministries to ensure that TRIPS obligations of the Government on proper enforcement of patent are properly met.

The process of granting marketing approval for patented molecules, in general, rests on the Ministry of Health (MoH) of WTO member states. Thus for WTO member states to meet TRIPS obligations effective communication between the MoH and the Patent offices of the country is absolutely essential. Such a system will help prevent approval of generic versions of patented molecules before expiration of the product patents.

Establishing this communication process will ensure that one department/ministry of the Government (say DCGI) does not impair the efforts of another Government department/ministry (say IPOs) to provide effective intellectual property protection as articulated in Article 28.1 of the WTO TRIPS Agreement.

This system will ensure that Health Regulatory Authorities do not, even unintentionally, undermine the commitment of the Government to conform to the TRIPS Agreement.

My experience of the last three years of post product patent regime in India prompts the need for establishing a “Patent Linkage” system without further delay, not only for effective patent protection but also to encourage innovators to get more involved and engaged in the process of innovation in India.

Will India be the unique country if such a system of “Patent Linkage” is put in place? The answer is obviously ‘no’.

In the largest market of the global pharmaceutical industry, the USA, such a system exists. US FDA maintains a listing of pharmaceutical products known as the ‘Orange Book’. The soft copy of the ‘Orange Book’ is also available through internet at: http:/www.fda.gov/cder/ob/.

US FDA does not authorize marketing approval of generic versions of patented molecules listed in the ‘Orange Book’.

What then happens in the second largest market of the global pharmaceutical industry, the European Union (EU)? In the EU, sanctity of the product patent is ensured by granting 10/11 years data exclusivity. Thus, if any company intends to introduce a generic version of a patented molecule, it will have to generate its own sets of entire regulatory data through a very long and expensive process, which may take several years. Even after spending huge amount money and time towards generation of their own clinical data, there is no guarantee that such companies will be able to market the product without getting involved into expensive patent infringement litigation. Thus in the EU, the deterrent to make such an ambitious attempt is humongous.

Various types of ‘Patent Linkage’ system also exists in Australia, Canada, Mexico, Jordan, UAE, Singapore, China etc. While putting in place of such a system is reportedly in progress in countries like, Chile, Dominican Republic – Central America, Bahrain, Morocco, Oman etc.

To conclude, in my view, when the Government of India is the sole authority to grant product patents in India, it is the responsibility of the same Government to protect those patents through its Health Regulatory System i.e. DCGI’s office. I reckon, such a system already exists in India. The procedure of (‘Patent Linkage’) checking the patent status before granting marketing approval already exists in FORM 44, which is an application to the DCGI for grant of permission to import or manufacture a New Drug or to undertake clinical trial in India. In the first page of FORM 44 (available in the website of the DCGI) under ‘Particulars of New Drug’ in point 8, it seeks details of the ‘Patent Status of the drug’. Can this information be not effectively utilized to justifiably deny marketing approval of a generic version of a patented molecule during its patent life in India? If not, it is difficult to make out what purpose will the DCGI utilize this information for?

Thus in my view, the procedure to be followed for ‘Patent Linkage’ in India is already in place. There is hardly any need to reinvent this wheel either. The Health Regulatory Authority of India should now make this procedure work effectively in its obligation to adhere to the commitment of the national Government to honour Article 21.1 of WTO TRIPS Agreement.

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.

We need to encourage the new product patent regime

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Ushering in the Product Patent Regime in India heralds the dawn of a new era. The era that vindicates not only the need to encourage, protect and reward innovation for the rapid progress of our nation but also to compete effectively, in the knowledge economy with the best in the world to establish India as a leading country with a significant share of the global economy.However, it is quite unfortunate that the patents that protect today’s innovations and drive research and development to create tomorrow’s life-saving treatments are under criticism from some quarters.India chose to follow an alternative to Product Patent regime for many years. In 1970, the Government of India amended its IP laws with a clear objective in mind to reduce the prices of medicines to improve their access to the ailing population of the country.

As a result, some drugs were made cheaper. However, the moot question that we need to address now: was it a panacea? While looking back, it does not really appear so. On the contrary, the situation remained as gloomy thereafter, so far as the access of medicines is concerned. After almost 4 decades of continuation with the above policy, around 65% of Indian population still do not have access to cheaper off-patent medicines against comparative figures of 47% in Africa and 15% in China (Source: International Policy Network, November 2004).

Children still go without routine vaccinations, though the Government has made the primary vaccination programs free in our country, for all. Even in a situation like this, where affordability is no issue, only about 44% of infants (12 – 23 months) are fully vaccinated against six major childhood diseases – tuberculosis, diphtheria, pertussis, tetanus, polio and measles.

Moreover, as we know, despite distribution of cheaper generic HIV-AIDS drugs by the Government and others mostly free for years, only 5% of India’s AIDS patients were receiving any drugs by the end of 2006.

The above two important examples prove the point very clearly that, addressing the issue of price alone will not help our country to solve the issue of poor access of medicine to the ailing population of India. Only a sharp focus on rejuvenation of our fragile healthcare system, healthcare financing and rapid development of healthcare infrastructure of the country by the Government or through Public Private Partnership (PPP), will help address this pressing issue.

Indian Patent Act 2005 has paved the way for innovation and hi-tech research and development within the country. Contrary to adverse forecasts from some quarters, prices of medicines have not gone up.

However, while medicines play a relatively small role in rising overall health care spending including hospitalization, it is important to ensure that individuals with large healthcare expenses have affordable access to their medicines. Thus a good affordable insurance coverage (both Government and Private) available to all Indians belonging to various socio-economic strata, together with the above measures, will help address the key issues of both access and affordability of medicines for all, in a holistic way.

The attack on patents is not really a defense of patients or the poor. Such attacks help diverting attention from the core healthcare issues, as mentioned above, which are healthcare system, healthcare financing and healthcare infrastructure. Health of our nation will depend on how well these key issues are being addressed by the policy and decision makers. Our country cannot afford to ignore that Intellectual Property is one of the keys to prosperity of a great nation like India and it should be encouraged, protected and rewarded under a robust Patent Act of the country for inclusive growth.

By Tapan Ray

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