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:

(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.