Will ‘Patent Thicket’ Delay Biosimilar Drug Entry in India?

Posted on April 22, 2019 by Tapan Ray

Do pharma and biotech investors encourage companies indulging in ‘patent thicket?’ This question recently grabbed media headlines. On April 02, 2019, one such report brought out: AbbVie investors are calling for the Chair-CEO power split, flagging the CEO’s USD 4 million bonus payout, fueled by the company’s Humira ‘patent thicket’ strategy related aggressive price hikes. It prolonged the brand’s market monopoly, blocking entries of its cheaper biosimilar equivalents.

I have discussed some related issues in this blog, previously. As the issue is gaining relevance also in the Indian context, this article will deliberate the ill-effects of ‘patent thicket’ on patient health-interest. The sole beneficiaries for the creation of this self-serving labyrinth are the manufacturers of high-priced patented drugs, as reported above. Before I proceed further, let me recapitulate what exactly is a ‘patent thicket.’

‘Patent Thicket’:

The dictionary definition of patent thicket is: ‘A group of patents in a field of technology which collectively impede a party from commercializing its own patents or products in that field.’In the current context, it means a dense web of overlapping patent rights that restrict a generic or a biosimilar drug maker from commercializing its cheaper equivalents post expiry of the original patent.

This scenario has been well-captured by the above media report, which states: “AbbVie leadership has also been accused of creating a ‘patent thicket’ in its battle to stave off biosimilar competitors to Humira.” Boehringer Ingelheim is among the few still fighting AbbVie’s ‘patent thicket’ hoping to launch its Humira biosimilar - Cyltezo, even after receiving US-FDA approval on August 29, 2017. ‘Top biosimilar makers, including Novartis’ Sandoz unit and Mylan, have settled their own Humira patent fights with deals that put off launches until 2023,’ the report indicated.

In its favor: AbbVie says, Cyltezo infringes about 70 patents the company currently holds for Humira. Whereas, ‘Boehringer’s lawyers say AbbVie’s copious patents overlapped in an attempt to exclude competitors from the market.’ Notably, in March this year, New York’s UFCW Local 1500 Welfare Fund, reportedly, also accused AbbVie of using overlapping patents to exclude biosimilars.

‘Patent thicket’ – a way of ‘evergreening’ beyond 20 years patent term:

Much concern is being raised about various ploys of especially by the drug MNC and their lobby groups – directly or under a façade, to delay entry of cheaper generic drugs for greater patient access. Mostly the following two ways are followed for patent ‘evergreening’ beyond the term of 20 years:

‘Incremental innovation’ of the existing patented drugs through molecular manipulation, with its clinical performance and safety profile remaining similar to the original one. As the cost benefits of such drugs are not shared with patients, cannibalizing the sales of the older molecular version with the newer one highlighting its newness, the sales revenue can be protected. With this approach, coupled with marketing muscle power with deep-pocket the impact of generic entry of the older version can almost be made redundant. For example: Omeprazole was first marketed in 1989 by AstraZeneca, under the brand name Losec (later changed to Prilosec at the behest of the US-FDA). When Prilosec’s US patent expired in April 2001, AstraZeneca introduced esomeprazole (Nexium) as a patented replacement drug. Both are nearly identical in their clinical efficacy and safety.

‘Patent thicket’ is yet another tool for ‘evergreening’, delaying launch of similar drugs, or resorting to ‘pay for delay’ sort of deals. As another recent report reiterates, AbbVie’s ‘patent thicket’ for Humira, has deterred other potential challengers, such as Amgen, Samsung Bioepis and most recently Mylan, each of which struck settlements with AbbVie to delay their biosimilar challenges in the United States.

Goes against patients’ health interest:

On May 09, 2018, the Biosimilars Council reported, just as generic medicines saved Americans USD 1.67 trillion in the last decade, biosimilars are poised to do the same – ‘if they aren’t thwarted by delaying tactics instituted by some pharmaceutical companies.’ Echoing similar concern, the outgoing US-FDA Commissioner Scott Gottlieb also, reportedly said, ‘some drugmakers are using unacceptable tactics such as litigation and rebate schemes to stall the entry of cheaper copies.’

‘Of the nine biosimilars the FDA has approved to date, only three have made it into the hands of patients – an alarmingly small number. Patients can’t access the six others due to barriers thrown in their way by pharmaceutical companies that want to protect their monopolies and keep prices high,’ highlights the Biosimilars Council report. Net sufferer of this self-serving ‘patent thicket’ strategy of pharma and biotech players to extend product patents beyond 20 years, are those patients who need these drugs the most – to save their lives.

Despite law, patent ‘evergreening’ still not uncommon in India:

With section (3d) on the Indian Patents Act 2005 in place, the country is expected to protect itself from patent ‘evergreening’ through ‘incremental innovation.’ This section articulates:“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.”

On this ground, Indian Patent Office (IPO) rejected Novartis’ drug Glivec (imatinib mesylate) patent application, which was ultimately upheld by the Supreme Court in 2013. Nevertheless, a study report of April 30, 2018 emphasized: ‘Though the law with regard to anti-evergreening, upheld and clarified by Indian courts, remains on the books, its application by the IPO has been far from satisfactory.’

The esteemed author of the report, after analyzing about 2,300 drug patents, granted between 2009 and 2016 concluded that evergreening practices may be rampant in India. The report pointed out, ‘the IPO could be operating with an error rate as high as 72 percent for secondary patents, despite provisions to keep them in check.’

Are these IPO’s mistakes, or due to external pressure?

As the paper, published in the January 2016 edition of the Journal of Intellectual Property Rights (JIPR) said,‘The multi-national pharma companies (MNCs) and the US-India Business Council (USIBC) have suggested in their report for elimination of Section 3 (d) so that drug patents can be granted in India for incremental improvement and modification. As per US 301 report, India is listed among countries with inadequate IP regime.’ Keeping all these aspects into consideration, the article expressed some key concerns pertaining to the impact of Section 3 (d) with special emphasis on its interpretation. Does it mean any possibility of wilting under such extraneous and high impact pressure?

A fresh pressure from drug MNC on the DCGI:

Since long drug MNCs have been attempting to delay the entry of even those generics, which are fully compliant with the Indian Patent Law 2005. One such effort was their demand for ‘patent linkage’ with the marketing approval of new generic drugs. However, it could not pass through legal scrutiny – first by the Delhi High Court in the Bayer Cipla case in 2010, and then by the Supreme Court – on the same case. The Court, reportedly, ‘noted the Indian patent system was distinct from the drug regulatory system with no linkage between them and so Bayer can’t prevent DCGI from granting marketing approval to generic versions of patented drugs.’

According to another recent media report of April 04, 2019, in a fresh endeavor ‘to delay launch of low priced generic medicine, multinational drug makers have asked the government to create a registry providing information about all drug applications pending manufacturing and marketing approval. The proposal, which is still pending with the Department of Pharmaceuticals (DoP), if accepted, could involve the generic players into expensive and time-consuming litigations, delaying early market entry of the cheaper generic or biosimilar equivalents.

To date, the health ministry has opposed the proposal, as it will be “unfair to local drug manufacturers to disclose their product strategy” and also has “the potential to substantially increase health care costs for the public.” The government further argued, “such information about product applications filed for approval are not disclosed anywhere in the world.”

India encourages new drug innovation, but not at any cost:

Despite shrill and disparaging comments of MNC lobbyists and the strong vested interests, that India’s Patent Law 2005, doesn’t encourage innovation, many independent international experts do praise the same for the following reasons:

Does encourage new drug innovation
Does extend product exclusivity for twenty years
Strikes a right balance with patients’ health interest
Indian judicial system deals with patient infringements and disputes, just as any other developed countries
Even 14 years after the enactment of patent laws, just one compulsory license has been granted, which is much less than other countries, including the United States.

What India doesn’t legally allow is, unfettered profit making through ‘evergreening of drug patents’ – at the cost of millions of patients-lives. Nonetheless, powered by deep pockets, the pharma and biotech players are unlikely to cease from this practice, anytime soon. Only patient-awareness, and stringent counter-legal measures can contain this unfair game of drug monopoly practices – in the name of ‘encouraging innovation’.

Conclusion:

The article titled, ‘Over patented, overpriced: How Excessive Pharmaceutical Patenting is Extending Monopolies and Driving up Drug Prices’ revealed:“Top grossing drugs have on average 125 patent applications, which are filed with a strategic intent to extend the commercial monopolies far beyond the intended twenty years of protection.” It also quoted American President Donald Trump as saying, “Our patent system will reward innovation, but it will not be used as a shield to protect unfair monopolies.”

Coming back to ‘patent thicket’ and the same classic case, another report of March 20, 2019 indicated, a new class action lawsuit filed by New York’s largest grocery union has accused AbbVie of violating antitrust and consumer protection laws, which AbbVie has defended by saying that its patent strategy for Humira has protected the investments that are necessary to “advance healthcare.”

Pharma and biotech companies’ maintaining patent monopolies far beyond twenty years has significant consequences on India’s healthcare system. Only patent lawyers and experts can possibly answer whether or not the Indian Patent Law 2005 can effectively deal with the practice of ‘evergreening’ with patent thicket. Intriguingly, taking a cue from recent developments, it seems many pharma and biotech investors too, deem ‘patent thicket’ rather distracting for longer-term undiluted focus on new product development, and sustainable investors’ return.

That apart, the question also comes, whether just as ‘antitrust and consumer protection laws’ in the US, the Competition Law of India will be able to do contain such unfair practices? Otherwise, with MNC lobbyists’ renewed activities in this area, ‘patent thicket’, especially for expensive biologic drugs, will delay market-entry of their cheaper biosimilar versions in India, as well, just as what is happening in the developed nations.

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.

For Drug Safety Concern: “Whistleblower’s Intention Should Be Nationalistic”

Posted on March 14, 2016 by Tapan Ray

In the recent weeks, three significant developments related to the Pharmaceutical Industry in India, have triggered rejuvenated concerns in the following critical areas:

A. Overall drug safety standards in the country

B. Self serving interest, rather than patients’ interest, dominate the prescribing decisions

C. Government assurance to American Trade Organization on ‘Compulsory License (CL)’ in India.

These important issues fall under three key regulatory areas of India, as follows:

The Central Drugs Standard Control Organization (CDSCO)
The Medical Council of India (MCI)
The Indian Patent Office

It is worth mentioning here that the Department Related Parliamentary Committee on Health and Family Welfare in its 59^th Report, placed before both the houses of the Parliament on May 08, 2012, on the functioning of the Central Drug Standards Control Organization (CDSCO), begins with the following observations:

Medicines apart from their critical role in alleviating human suffering and saving lives have very sensitive and typical dimensions for a variety of reasons. They are the only commodity for which the consumers have neither a role to play nor are they able to make any informed choices except to buy and consume whatever is prescribed or dispensed to them, for the following reasons:

Drug regulators decide which medicines can be marketed
Pharmaceutical companies either produce or import drugs that they can profitably sell
Doctors decide which drugs and brands to prescribe
Consumers are totally dependent on and at the mercy of external entities to protect their interests.

Most importantly, all these concerns, if not properly clarified and appropriately addressed by the Government, soon enough, have the potential to create an adverse snowballing impact on the uniform access to affordable quality medicines, for all sections of the society in India.

Under this backdrop, I shall discuss in this article briefly, my perspective on each of these critical areas, as they are today, and not just the drug safety concerns.

The headline of this article is expected capture not only the prevailing mood of some key regulators, but also their inertia to address critical healthcare concerns and above all how the core public health related issues are getting lost, and the trivial ones are gradually occupying the center stage.

A. Overall drug quality and safety  standards in India:

A Public Interest Litigation (PIL) suit, filed against the Drugs Consultative Committee and the Central Drugs Standard Control Organization (CDSCO), was listed on the Supreme Court website for hearing on March 11, 2016.

The PIL has been filed by one Dinesh Thakur, requesting the Supreme Court to lay down guidelines by which manufacturers could be made liable for violating drug standards and also give a direction to the government to set up a ‘Drug Approvals Review Committee’ for examining criminality in the manner in which faulty drug approvals were granted.

Many may recall that the same Dinesh Thakur worked for Ranbaxy from 2003 for two years, and is now the Chief Executive of MedAssure Global Compliance based in Florida, US. Thakur’s Company now advises pharma manufacturers on drug safety and quality standards.

As reported by Reuters, Thakur had earlier exposed how the erstwhile largest drug maker of India, Ranbaxy Laboratories, failed to conduct proper safety and quality tests on drugs and lied to regulators about its procedures. Consequently, USFDA fined Ranbaxy US$500 million for violating federal drug safety laws, and making false statements to the US regulator.

This news report further states: “Indian Parliamentary Committee, thereafter, reportedly demanded an investigation and the drugs regulator committed to one in 2013. Thakur received a statement from the health ministry last year, seen by Reuters, showing no inquiry had begun.”

On the last Friday, however, the Supreme Court of India refused to entertain this PIL of Dinesh Thakur, saying it does not have time to adjudicate academic issues, such as, need for guidelines to regulate quality of medicines.

The core issue:

The core issue here is not at all the above PIL, not at the very least. The issue is the much reported concern being expressed, over a period of time, regarding the drug safety standards in India. The reasons include breach of of data integrity, and gross violation of the ‘Good Manufacturing Practices’ standards. Such instances are being detected, almost regularly, by the foreign drug regulators, in several manufacturing facilities run by many large and small Indian drug producers.

It is well vindicated by the fact that around 45 Indian drug manufacturing plants have been banned by the USFDA alone, from shipping generic drugs to the United States, as these were considered unsafe for consumption of patients in the US. Some other foreign regulators too had taken similar action, citing similar reasons. The USFDA website specifies the details of gross violations made in each of these cases.

Ironically, all such facilities can manufacture and sell their drugs in India, as they conform to the quality requirements of the Indian drug regulator. Consequently, the Indian patients consume even those medicines, which are considered unsafe by the USFDA for American patients, innocently, as and when prescribed by the doctors.

Arising out of these incidents, when asked about the drug safety standards in India, and the public health-safety, instead of giving credible and action oriented answers for public reassurance, some of the apparently brazen replies of the DCGI are quite stunning for many stakeholders, both within and outside the shores of India.

I would now quote below just a few of those replies, just as examples.

“…Whistleblower’s Intentions Should Be Nationalistic” - DCGI:

According to Reuters, it has received the following response from the Drug Controller General of India (DCGI), on the above PIL related to the drug safety standards in India:

“We welcome whistleblowers, we have got great respect, but their intentions should be genuine, should be nationalistic… I don’t have any comment on this guy.”

Thus, many industry watchers feel that in a situation like this, the honorable Supreme Court of India would possibly require to intervene, just as what it did on alleged ‘Clinical Trial’ malpractices in the country or for drug price control, solely for public health interest.

The same attitude continues:

Such brazen response of the Central Drug Regulator, and that too on a serious subject, is indeed bizarre. It becomes increasingly intriguing, as the same attitude continues without any perceptible meaningful intervention from the Ministry of Health.

For example, on February 22, 2014, in the midst of a more intense scenario on a similar issue, instead of taking transparent and stringent measures, the DCGI was quoted by the media commenting:

“We don’t recognize and are not bound by what the US is doing and is inspecting. The FDA may regulate its country, but it can’t regulate India on how India has to behave or how to deliver.”

On February 26, 2014, presumably reacting to the above remarks of the DCGI, the American Enterprise Institute reportedly commented, “Indian drug regulator is seen as corrupt and colliding with pharma companies…”

Such apparently irresponsible and loose comments keep continuing, despite the 2012 report of the Parliamentary Committee of India alleging collusion between some pharmaceutical companies and officials of the CDSCO, which oversees the licensing, marketing and trials of new drugs. The report also commented that the agency is both chronically under-staffed and under-qualified.

Some possible remedial measures:

As the saying goes, “better late than never”, considering all these continuing developments, it is about time to reconsider some of the key recommendations of Dr. R. A. Mashelkar Committee on a similar subject and make amendments in the relevant Act accordingly, soon, to facilitate creation of a robust with high accountability ‘Central Drugs Authority (CDA)’. It would introduce a centralized licensing system for drug manufacturing, along with stringent drug safety standards; besides, sale, export and distribution of drugs. Perhaps, the draft bill on CDA is now lying in the heap of archival documents with the change in Government.

Why does India need CDA?

I believe, the formation of a robust CDA with high accountability, besides meeting with drug safety concerns, would provide the following significant benefits, both to the Industry and also to the Government:

Achieving uniform interpretation of the provisions of the Drugs & Cosmetics Act & Rules
Standardizing procedures and systems for drug control across the country
Enabling coordinated nationwide action against spurious and substandard drugs
Upholding uniform quality standards with respect to exports to foreign countries from anywhere in India
Implementing uniform enforcement action in case of banned and irrational drugs
Creating a Pan-Indian approach to drug control and administration
Evolving a single-window system for pharmaceutical manufacturing and research undertaken anywhere in the country.

B. Self serving interest dominates the prescribing decision:

That the self serving interest, rather than patient interest, dominate the prescribing decision, was vindicated by a key announcement of the Medical Council of India (MCI) last month.

In February 2016, apparently succumbing to continuous and powerful external pressure, the MCI announced an amendment in a clause of its Code of Ethics Regulations 2002, exempting doctors’ associations from the ambit of its ethics code, as applicable to doctors now across the country. Prior to the amendment, this section used to read as: “code of conduct for doctors and professional association of doctors in their relationship with pharmaceutical and allied health sector industry”.

In other words, it means that the professional associations of doctors will no longer come under the ambit of ethics regulations, legitimizing their indulgence in the identified unethical and corrupt practices, by receiving gifts in cash or kind from the pharma or healthcare industry.

A large section of the key stakeholders believes that this amendment would help creating an additional large space for the pharmaceutical marketing malpractices to thrive, unabated, at the cost of patients.

The latest report of the Parliamentary Standing Committee on MCI:

In its 92nd Report, the Department-Related Parliamentary Standing Committee on Health and Family Welfare titled, “The Functioning of Medical Council of India”, presented to the Rajya Sabha and laid on the Table of Lok Sabha on 8th March, 2016, the Committee observed on this amendment as “an action that is ethically impermissible for an individual doctor cannot become permissible, if a group of doctors carry out the same action in the name of an association.”

The report also noted the failure of MCI to instill respect for a professional code of ethics in the medical professionals and take disciplinary action against doctors found violating the code of Ethics, etc.

The Committee called for a complete restructuring of the MCI, since it believes that the Council has failed as a regulator of medical education and the profession. Casting serious aspersions on the functioning of the MCI, the house panel of the Parliament recommended that the Act under which the MCI was set up be scrapped and a new legislation be drafted “at the earliest”.

The report castigated the health ministry:

The lawmakers castigated the Health Ministry in this report saying, “The committee also finds it intriguing that instead of intervening to thwart attempts of MCI at subverting the system, the ministry meekly surrendered to MCI.”

While summing up, the report states, “the Committee exhorts the Ministry of Health and Family Welfare to implement the recommendations made by it in this report immediately and bring a new Comprehensive Bill in Parliament for this purpose at the earliest.”

How will it pan out now?

I reckon, it will now be immensely interesting now for all concerned to follow, how does the Government deal with this report to curb, among others, the strong interference of mighty and powerful vested interests to continue with the rampant pharma marketing malpractices, at the cost of patients in India.

C. Reported Government assurance on ‘Compulsory License’:

On March 3, 2016, a media report quoted a submission by the US Chamber of Commerce to the office of the US Trade Representative (USTR) as follows:

“While the Government of India has privately reassured (American) industry that it would not use compulsory licenses for commercial purposes, a public commitment to forgo using (this) would enhance legal certainty for innovative industries.”

This is an interesting development, primarily because there are a number of legal provisions for granting Compulsory Licenses (CL) in the Indian Patents Act 2005, including, when a drug is not widely available, extremely expensive and some other situation. In some these provisions, law should follow its own course and there is no legally permissible scope for Government’s administrative interference. Grant of CL for Nexavar of Bayar is one such example, and incidentally, that’s the sole CL that India has granted, so far, from the date of amendment of the country’s Patents Act in 2005.

Thus, a blanket assurance of not invoking any of the provisions of the CL, as provided in the Indian Patents Act 2005, if true, would possibly require to pass through intense legal scrutiny, as that would adversely impact the access to key medicines in a necessary situation, for the public health interest.

So far, India has amply demonstrated to all, time and again, that the country does not grant a CL at the drop of a hat. That situation should continue to encourage and protect innovation.

Nevertheless, “a written public commitment to forgo using the CL provisions for enhancing legal certainty for innovative industries,” as demanded by the US Chamber of Commerce, appears to be unreasonable, goes against the spirit of India’s Patents Act, and perhaps is not legally tenable either, unless the IP Act is amended accordingly in the Parliament.

Conclusion:

All these three areas, as discussed above, are critical from the healthcare perspective of the country.

Ironically, while deliberating on the subject, the capability, credibility and competence of some of the key regulators of the country, are being repeatedly questioned. These doubts emanate not just from Tom, Dick and Harry, but from an illustrious spectrum of constitutional institutions of India, spanning across the lawmaking Parliament, through its various committee reports, to the ultimate legal justice provider – the Supreme Court of India, through is various orders and key observations.

Regrettably, in this specific space, which is primarily related to healthcare, nothing seems to be changing on the ground, since long. The same tradition continues, without any visible sense of urgency, even from the Government.

On the contrary, we now read a new genre of comments, even from a key regulator, on the stakeholder concerns. For example, reacting to concern on drug safety standards, instead of articulating tangible actions to usher in a perceptible change, the chief action taker reportedly specified a totally judgmental and an outlandish requirement: “…Whistleblower’s intentions should be Nationalistic.”

Together with these incidents, the key public healthcare concerns of India too, are now apparently getting drowned in the high decibel ‘Nationalistic’ versus ‘Anti-nationalistic’ cacophony. But, the hope still lingers… for a change…for our nation’s sound health!

By: Tapan J. Ray

The Curious Imbroglio: Innovation, IPR, India and ‘Uncle Sam’

Posted on May 4, 2015 by Tapan Ray

Last week, the Office of the United States Trade Representative (USTR) released the “2015 Special 301 Report”, which is its annual review of the global state of Intellectual Property Rights (IPR) protection and enforcement.

While looking through the Kaleidoscope of business interests of the United States, variegated changing patterns of a wide variety of country-specific observations can be noted in this report.

It is widely believed that the report ‘pontificates’ about the adequacy and effectiveness of IPR protection and enforcement of its trading partners against USTR’s own yardstick, hinting unhesitantly at the possible consequences, if found lacking.

USTR reviewed seventy-two (72) trading partners for this year’s Special 301 Report, and placed thirty-seven (37) of them on the ‘Priority Watch List’ or ‘Watch List’. Thirteen (13) countries – Algeria, Argentina, Chile, China, Ecuador, India, Indonesia, Kuwait, Pakistan, Russia, Thailand, Ukraine, and Venezuela, are on the ‘Priority Watch List’. These countries will be the subjects of particularly intense bilateral engagement during the coming year.

India specific significant elements of the 2015 Special 301 Report include the following:

Increased bilateral engagement in 2015 between the United States and India on IPR concerns, following the 2014 Out-of-Cycle Review (OCR) of India on this issue.

India will remain on the ‘Priority Watch List’ in 2015, but with the full expectation of US about substantive and measurable improvements in India’s IPR regime for the benefit of a broad range of innovative and creative industries.

The US offered to work with India to achieve these goals.

No OCR at this time for India, but US will monitor progress in India over the coming months, and is prepared to take further action, if necessary.

The 2015 report also highlights:

“While it is impossible to determine an exact figure, studies have suggested that up to 20% of drugs sold in the Indian market are counterfeit and could represent a serious threat to patient health and safety.”

According to media report, a senior Commerce & Industry Ministry official has commented, “India is disappointed at being featured yet again in the US ‘Priority Watch List’ of weak IPR countries. But it is not worried.”

Recent Action by India:

In October 2014, almost immediately after Prime Minister Modi’s return to India from the US, the Government formed a six-member ‘Think Tank’ to draft ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas.

The notification mandated the ‘Think Tank’ to examine the current issues raised in such reports and give suggestions to the ministry of Commerce & Industry as appropriate.

However, the domestic pharma industry, many international and national experts together with the local stakeholders, continue to strongly argue against any fundamental changes in the prevailing robust patent regime of India.

In the same month, the Department of Industrial Policy and Promotion (DIPP) constituted a six-member ‘Think Tank’ chaired by Justice (Retd.) Prabha Sridevan to draft the ‘National IPR Policy’ of India. Taking quick strides, on December 19, 2014, the Think Tank’ released its first draft of 29 pages seeking stakeholders’ comments and suggestions on or before January 30, 2015. A meeting with the stakeholders was also scheduled on February 5, 2015 to take it forward.

Possible reasons of US concern on the draft ‘National IPR Policy’:

As I discussed in my blog post of January 19, 2015 titled, “New “National IPR Policy” of India – A Pharma Perspective”, I reckon, there are three possible key areas of concern of American pharma industry against Indian patent regime. However, in the draft National IPR Policy India seems to have stood its ground in all those areas.

The draft IPR policy responded to those concerns as follows:

Concern 1: “India’s patentability requirements are in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.” (Though it has not yet been challenged at the WTO forum)

Draft IPR Policy states: “India recognizes that effective protection of IP rights is essential for making optimal use of the innovative and creative capabilities of its people. India has a long history of IP laws, which have evolved taking into consideration national needs and international commitments. The existing laws were either enacted or revised after the TRIPS Agreement and are fully compliant with it. These laws along with various judicial pronouncements provide a stable and effective legal framework for protection and promotion of IP.”

A recent vindication: On January 15, 2015, Indian Patent Office’s (IPO’s) rejection of a key patent claim on Hepatitis C drug Sovaldi (sofosbuvir) of Gilead Sciences further reinforces that India’s patent regime is robust and on course.

Gilead’s patent application was opposed by Hyderabad based Natco Pharma. According to the ruling of the IPO, a new “molecule with minor changes, in addition to the novelty, must show significantly enhanced therapeutic efficacy” when compared with a prior compound. This is essential to be in conformity with the Indian Patents Act 2005. Gilead’s patent application failed to comply with this legal requirement.

Although Sovaldi ((sofosbuvir) carries an international price tag of US$84,000 for just one treatment course, Gilead, probably evaluating the robustness of Sovaldi patent against Indian Patents Act, had already planned to sell this drug in India at a rice of US$ 900 for the same 12 weeks of therapy.

It is envisaged that this new development at the IPO would prompt entry of a good number of generic equivalents of Sovaldi. As a result, the price of sofosbuvir (Sovaldi) formulations would further come down.

However, reacting to this development Gilead has said, “The main patent applications covering sofosbuvir are still pending before the Indian Patent Office…This rejection relates to the patent application covering the metabolites of sofosbuvir. We (Gilead) are pleased that the Patent Office found in favor of the novelty and inventiveness of our claims, but believe their Section 3(d) decision to be improper. Gilead strongly defends its intellectual property. The company will be appealing the decision as well as exploring additional procedural options.”

For more on this subject, please read my blog post of September 22, 2014 titled, “Gilead: Caught Between A Rock And A Hard Place In India”

Concern 2: “Future negotiations in international forums and with other countries.”

Draft IPR Policy states: “In future negotiations in international forums and with other countries, India shall continue to give precedence to its national development priorities whilst adhering to its international commitments and avoiding TRIPS plus provisions.”

Concern 3: “Data Exclusivity or Regulatory Data Protection.”

Draft IPR Policy states: “Protection of undisclosed information not extending to data exclusivity.”

I discussed a similar subject in my blog post of October 20, 2014 titled, “Unilateral American Action on Agreed Bilateral Issues: Would India Remain Unfazed?”

Confusion with the Prime Minister’s recent statement:

It is worth noting that in end April 2015, Prime Minister Narendra Modi reportedly remarked to align India’s patent laws with “international standards”.

What the Prime Minister really meant by patent laws with “international standards” could be of anybody’s guess. This is because, even the World Trade Organization (WTO) considers Indian Patents Act compliant to TRIPS Agreement, which has been globally accepted as the ‘Gold Standard’ in the realm of IPR…unless, of course, Prime Minister Modi intends to accept ‘TRIPS Plus’ provisions for India, under US pressure and at the cost of health interest of majority of Indian patients.

It is noteworthy though, his own Ministry of Commerce & Industry has categorically emphasized and re-emphasized several times in the past that India’s patent regime is fully TRIPS compliant.

To add greater credence to this argument, the noted free market economist and Professor of Economics at Columbia University – Arvind Panagariya, who has recently been appointed to run Prime Minister Narendra Modi’s new NITI Aayog, has also endorsed it in his published articles, unambiguously.

As usual, leaving nothing to chance, immediately after the above remark of the Indian PM to align India’s patent laws with “international standards”, the USTR urged India to ‘expeditiously undertake’ initiatives stated by PM Modi, flashing across a long list of changes that the US wants to get incorporated in the Indian IP Acts and policies.

Pressure for amendment of Indian Patent Law:

From the intensity of pressure that the US Pharma industry is generating on the US Government, it is clear that American pharma industry will not be satisfied till Modi Government brings in changes in the Indian Patents Act 2005, as dictated by its constituents.

At the top of much publicized US wish list on IPR, features abolition of Section 3(d) of the Indian patent law. This provision of the Act denies patents to frivolous and incremental innovations without offering any significant value to the patients in terms of improved clinical efficacy of the drug. Many would term such innovation as attempts towards evergreening of patents through minor molecular manipulation or similar other means. This kind of innovation gives already a very high priced blockbuster drug another full term of patent monopoly, often with even higher price, at the cost of patients.

Pressure for a relook at the National IPR Policy:

In fact, the USTR 2015 report, also asks India to have yet another round of consultations with stakeholders before finalizing its IPR policy. This is widely construed as an attempt on the part of the US Government and industry to conclude their unfinished IPR agenda for India.

Whether Modi Government would be bullied by the American Pharma industry to succumb to its pressure at the cost of the Indian patients and going against the national and international experts’ opinion, only time would tell.

Benefits of Innovation and India:

India has amply demonstrated time and again that it does understand the value and benefits of innovation in different facets of life and business. The country endeavors to protect it too, according to the law of the land. However, there are still some procedural loose knots existing in the IPR environment of the country.

As stated above, for effective remedial measures in those areas, a ‘Think Tank’ has already been constituted by Modi Government to formulate a robust and comprehensive National IPR Policy.

In this context, a media report quoted a senior official from the Union Ministry of Commerce & Industry saying, “We hope this year we can convince the US that our laws are drafted in a way so as to protect both our consumer and industry’s interest. The new IPR policy that we are coming out with will take care of any anomalies or vagueness in our existing regime and make it tight and also fast-track clearances of patent applications.”

Would there be a ‘Ghost Writer’ for Indian IPR Policy?

The first draft of the policy has already been circulated in January 2015 and discussed in the following month with the stakeholders. However, American Pharma industry does not seem to be satisfied with its overall content, leave aside the nitty-gritty.

Going by this development some apprehends that a powerful lobby group probably wants to be the ‘Ghost Writer’ for the IPR Policy of India. Coincidentally enough, we also see the USTR blowing hot and cold on this critical issue…blowing hot through its ‘Special 301 Report’ and cold by praising Prime Minister Modi’s remark to align India’s patent laws with “international standards”.

India should play a catalytic role in changing the drug innovation model:

A paradigm shift in the drug innovation model can materialize only when there will be a desire to step into the uncharted frontier…coming out of the comfort zone of much familiar independent money spinning silos of all kinds of drug innovations…from break-through drugs to me-too varieties. Dove tailing scientific and business excellence with patients’ health interest, dispassionately, would then be the name of the game.

Though arduous, playing a catalytic role to bring out this transformation sooner, is extremely important for India. This is because, drug innovation with significant value addition would continue to remain as critical as access to important medicines for all, in perpetuity. India understands that just as clearly as USTR …for its ‘make in India’ campaign or otherwise. No well-orchestrated and spoon-fed pontification required in this area…uncalled for.

Conclusion:

The bottom line is, the US Pharma industry continues to flex its muscle relentlessly under the very often used, misused and even abused façade that India does not understand the value of innovation.

On the other hand, the general sentiment in this area, both national and international, favors India.

As the new Vice Chairman of NITI Aayog of India, Dr. Arvind Panagariya wrote, “India must call the US’ bluff on patents,” it’s indeed time to demonstrate the same, once and for all.

However, in the context of upholding patients’ health interest in India, a lurking fear does creep in, after PM Modi’s well publicized recent remark to align India’s patent laws with “international standards”, especially when Indian Patents Act 2005 is already TRIPS compliant, according to WTO requirements.

That said, in the midst of a raging debate involving innovation, IPR, India and ‘Uncle Sam’, the moot question that floats at the top of mind is:

Has seemingly tough-minded Prime Minister Modi already yielded to ‘Uncle Sam’s’ bullying tactics to effect changes in an otherwise robust Indian patent regime, and that too at the cost of health interest of needy patients of the country?

By: Tapan J. Ray

Awaiting ‘The Moment of Truth’ on ‘Working of Patents’ in India

Posted on November 3, 2014 by Tapan Ray

By a letter dated October 21, 2014 addressed to the Secretary, Department of Industrial Policy and Promotion (DIPP) of India, the domestic pharma major Cipla has sought for the revocation of five patents of Novartis AG’s respiratory drug Indacaterol (Onbrez) in India, under Sections 66 and 92 of the Indian Patents Act.

Launch of a generic equivalent:

Cipla also announced its decision to launch shortly a generic equivalent of Indacaterol with the brand name Unibrez Rotacaps to satisfy the unfulfilled requirement of the new drug in India.

The Maximum Retail Price for a strip of 10 capsules of Unibrez Rotacaps 150 mcg would cost Rs.130.00 to patients against the equivalent strength of Onbrez of Novartis costing Rs.677.00, which is 420 percent more expensive than the price at which Cipla would sell this drug.

What do the Sections 66 and 92 of the Indian Patents Act say?

- Section 66 of the Indian Patents Act:

“66. Revocation of patent in public interest: Where the Central Government is of the opinion that a patent or the mode in which it is exercised is mischievous to the State of generally prejudicial to the public, if any, after giving the patentee an opportunity to be heard, make a declaration to that effect in the Official Gazette and thereupon the patent shall be deemed to be revoked.”

- Section 92 of the Indian Patents Act:

“92. Special provision for compulsory licenses: (1) If the Central Government is satisfied, in respect of any patent in force in circumstances of national emergency or in circumstances of extreme urgency or in case of public non- commercial use, that it is necessary that compulsory licenses should be granted at any time after the sealing thereof to work the invention, it may make a declaration to that effect, by notification in the Official Gazette, and thereupon the following provisions shall have effect, that is to say –

(i) The Controller shall on application made at any time after the notification by any person interested, grant to the applicant a license under the patent on such terms and conditions as he thinks fit;

(ii) In settling the terms and conditions of a license granted under this section, the Controller shall endeavor to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.

(2) The provisions of sections 83, 87, 88, 89 and 90 shall apply in relation to the grant of licenses under this section as they apply in relation to the grant of licenses under section 84.

(3) Notwithstanding anything contained in sub- section (2), where the Controller is satisfied on consideration of the application referred to in clause (i) of sub- section (1) that it is necessary in –

(i) A circumstance of national emergency; or

(ii) A circumstance of extreme urgency; or

(iii) A case of public non- commercial use, which may arise or is required, as the case may be, including public health crises, relating to Acquired Immuno Deficiency Syndrome, Human Immuno Deficiency Virus, tuberculosis, malaria or other epidemics, he shall not apply any procedure specified in section 87 in relation to that application for grant of license under this section:

Provided that the Controller shall, as soon as may be practicable, inform the patentee of the patent relating to the application for such non-application of section 87.”

Two key reasons:

Anchored on the above two sections of the Indian Patents Act, the two key reasons cited by Cipla for revocation of five patents granted to Indacaterol of Novartis AG are, very briefly, as follows:

Lack of inventive steps and ‘evergreening’ of patents:

The exclusivity given to five patents of Indacaterol is contrary to law due to lack of inventive step, being obvious inventions. Novartis allegedly has indulged in ‘evergreening’ with a number of patents to extend monopoly of the drug much beyond the term of the first patent. Indian law expressly bars ‘evergreening’ as it impedes drug access to a large majority of the patients.

Lack of working of the patents:

Cipla also claimed lack of “working” of those patents in the country, as a mere 0.03 percent of the drug requirement is currently being fulfilled in India. This leaves the percentage of inadequacy in the requirement of the drug per year at a staggering number of around 99.97 percent.

With supporting details, Cipla has stated in its letter that Indacaterol under the brand name Onbrez is imported by Novartis through its licensee Lupin Pharma only. It further pointed out that the Indian law requires all patents to be “worked” within the territory of India.

While adequate quantity of imports may qualify as working, the present case is one in which the patents in question have not been worked through imports of adequate quantity of the drug. Thus reasonable requirements of the public have not been fulfilled, at all.

Abysmally low drug access to Indian patients:

According to Cipla, when there has been a necessity for the availability of Indacaterol to a much larger number of patients afflicted by COPD, that has assumed magnitude of an epidemic, just a miniscule of 0.03 percent of the total drug requirement is currently being met in the country. In 2013, the import of Indacaterol, as reportedly declared in Form 27 by Novartis to the Patent office, was just 53,844 units, which could meet this drug requirement at best of only 4,500 out of 15 million patients, annually.

Despite accepted drug benefits, the doctors are unable to adequately prescribe Indacaterol in India, due to low quantity of the drug import for the public.

Thus, while announcing the launch of cheaper generic equivalents of the drug, Cipla emphasized that its Unibrez Rotacaps would fulfill the requirements of the public, meet public health interest and at the same time increase access to this medicine, with an affordable alternative, for a large number of patients.

Increasing incidence of COPD in India:

In its application to the DIPP, Cipla underscored that Indacaterol is one of the preferred medications to treat widely prevalent Chronic Obstructive Pulmonary Disease (COPD) that has reached the magnitude of an epidemic in India with about 15 million Indians afflicted with the ailment.

COPD is now among the top ten causes of disease burden in India. According to Indian Council of Medical Research (ICMR), the overall prevalence rates of COPD in India are 5.0 and 3.2 percent respectively in men and women of and over 35 years of age. The World Health Organization (WHO) also reported that COPD is the cause of death of more people than HIV-AIDS, Malaria and Tuberculosis all put together in the South East Asian Region.

Cipla quoted an Indian Study on “Epidemiology of Asthma, Respiratory Symptoms and Chronic Bronchitis in Adults (INSEARCH)”, which estimated that about 7 percent of deaths annually are a result of Chronic Respiratory Diseases in India.

Importance of Indacaterol in COPD treatment:

Cipla reiterated that Indacaterol is the preferred drug over other beta adrenoceptor agonists, as it has to be consumed only once a day. Moreover, it has a higher potency and prolonged effect as compared to other beta adrenoceptor agonists.

Strong arguments make the case interesting:

Though appropriate legal authorities would take a final call on the subject, prima facie, Cipla seems to have a strong case resting on the pillars of Sections 66 and 92 of the Indian Patents Act.

Since, Cipla has already gone ahead and announced the launch of cheaper generic equivalent of Indacaterol in India, it gives a sense about the company’s confidence in its argument against five valid patents of Novartis on this drug.

On the other hand, one may also justifiably say that Cipla should have waited for the final verdict of the court of law on the validity of five Indacaterol patents in India, before deciding to actually launch a generic version of the patented drug.

It is worth noting that in 2013, Novartis lost a legal battle related to patent grant for its anti-leukemia drug Glivec in the Supreme Court of India. The case lasted over seven years in various courts of law. Interestingly, Cipla had followed similar course of action in the Glivec case too, and had won the case decisively.

‘Form 27’ and the Indian Patent office (IPO):

At this stage it is worth noting, a ‘Public Notice’ dated December 24, 2009 was issued by the Controller General of Patents, Design & Trade Marks, directing all ‘Patentees and Licensees’ to furnish information in ‘Form No.27’ on ‘Working of Patents’ as prescribed under Section 146 of the Patents Act read with Rule 131 of the Patents Rule 2003.

The notice also drew attention to penalty provisions in the Patents Act, in case of non-submission of the aforesaid information.

The information sought by the IPO in ‘Form 27’ can be summarized as follows:

A. The reasons for not working and steps being taken for ‘working of the invention’ to be provided by the patentee.

B. In case of establishing ‘working of a patent’, the following yearly information needs to be provided:

The quantity and value of the invention worked; which includes both local manufacturing and importation.
The details to be provided, if any licenses and/or sub-licenses have been granted for the products during the year.
A statement as to whether the public requirements have been met partly/adequately to the fullest extent at a reasonable price.

The ‘Public Notice’ also indicated that:

• A fine of up to (US$ 25,000 may be levied for not submitting or refusing to submit the required information by the IPO.

• And providing false information is a punishable offence attracting imprisonment of up to 6 months and/or a fine.

The important point to ponder now is, if Cipla’s allegation is correct, what has been the IPO doing with the ‘Form 27’ information to uphold the spirit of Indian Patents Act 2005, thus far?

Conclusion:

For various reasons, it would now be interesting to follow, how does the IPO deal with this case right from here. In any case, information provided through ‘Form 27’ cannot remain a secret. ‘The Right to Information Act (RTI)’ will help ferret more such details out in the open.

As the ‘Moment of Truth’ unfolds in this case, one would be quite curious to fathom how the strong voices against ‘non-working of patents’ and ‘evergreening’ drive home their arguments before the court of justice.

On the other hand, the global innovator companies, their highly paid lobby groups and the USTR are expected to exert tremendous pressure on the Indian Government to protect the global pharma business interests in India, come what may. All these would indeed create a potboiler, as expected by many.

In this complex scenario, striking a right balance between rewarding genuine innovation, on the one hand, and help improving access to affordable modern medicines to a vast majority of the population in the country, on the other, would not be an enviable task for the Indian Government.

As the juggernaut of conflicting interest moves on, many would keenly await for a glimpse of ‘the moment of truth’ based on the judicial interpretation of ‘evergreening’ and ‘working of patents’, for this case in particular.

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.

MNCs to Challenge MNC Patents in India: Boon for Patients?

Posted on September 16, 2013 by Tapan Ray

Close on the heels of a reasonably successful patent challenge by the German pharma Multinational Corporation (MNC) Fresenius Kabi for the breast cancer drug Tykerb of GlaxoSmithKline (GSK) in India, another MNC Mylan, with its headquarter in the United states, has explicitly expressed its plan to challenge frivolous and weak patents of MNCs, in conformance to the Indian Patents Act, to provide less expensive generic drugs to patients.

This is indeed another interesting development, which could possibly culminate into robust, cleverly crafted and fiercely competitive business strategies of many other MNCs, revolving around patent challenges in India, for business excellence in the country.

Mylan develops new products in India:

Mylan is now reportedly working with the local Indian player Biocon to develop a strong new product pipeline, which would include a portfolio of biosimilar drugs. The advanced breast cancer drug Trastuzumab (Herceptin) of Roche is just one of many in the list. Mylan has also expressed its intent to market ‘Herceptin’ at a price, which will be affordable to many more cancer patients of India.

It is worth mentioning that some other domestic Indian companies like, Reliance Life Sciences and BDR Pharma are reportedly working on generic Trastuzumab (Herceptin), besides some South Korean bio-pharma players.

Mylan has also inked an agreement with Biocon to develop and market an insulin drug derived from the global major Sanofi’s expensive patented product Lantus.

All these developments apparently augur well for India.

Weak patent?…Recapitulating Herceptin saga in india:

Though Roche decided to discontinue its patent rights for Herceptin in India, it reportedly lost this patent earlier in Europe. This vindicates the views of experts that Herceptin patent was weak, as it would probably not be able to clear the litmus test of a stringent patent scrutiny. The report, therefore, argues that core reason for withdrawal of Herceptin patent in India by Roche cannot be attributed, even remotely, to the ‘weak IP ecosystem’ in India.

To extend the patent right for Herceptin, in early September 2013, Roche reportedly announced that the European Commission has approved a new formulation of its breast cancer drug Herceptin, which allows the medicine to be administered more quickly.

A tough market, yet difficult to ignore:

For global innovator pharma majors, India still remains a tough market to crack, despite strong overseas political pressures of various types, intense collective and individual lobbying efforts and deployment of expensive global ‘Public Relations’ firms working in full steam.

Their strong success factors of the yesteryears in this area, which worked so well across the world, are getting mostly negated by the ‘evolving patient friendly IP laws’ of the emerging economies.

Considering the vast business potential of the pharmaceutical market of 1.2 billion people in India, it is now envisaged by many, more like-minded MNCs will gradually jump into this fray with similar intent of patent challenges in conformance with the Indian Patents Act 2005.

If this scenario assumes a cascading effect on a broader canvas, ultimate beneficiary will be the ailing patients, having much greater access to more affordable newer drugs for many dreaded diseases, like cancer.

Other countries too tightening up the patent laws:

To provide less-expensive generic drugs to patients, other countries also have started following India to leash astronomical prices for new drugs, especially for life threatening and intensely debilitating ailments. China has reportedly strengthened its compulsory licensing provisions already for dealing with costly drugs, paving the way to force entry of generic drugs in the Chinese market well before patent expiry.

In 2012, Indian Patent Office, in a path breaking decision granted Compulsory License (CL) to a local company, Natco Pharma, to manufacture the patented kidney-cancer drug, Nexavar of Bayer reportedly at a cost of Rs. 8,800 (around US$ 176) for a month’s therapy of 120 capsule against Bayer’s price of Rs. 280,000 (around US$ 5,600) for the same.

This is the first-ever case of CL granted in India thus far to make life saving drugs affordable to patients.

On September 3, 2012, the Indonesian government took the unprecedented step of overriding the patents on seven HIV and hepatitis treatments, citing urgent need to improve patient access. These drugs were reportedly beyond the reach of most of the patients in Indonesia.

Thailand has also used this provision more than once, and countries like, Brazil has reportedly threatened quite often for invoking CL during price negotiations of such drugs with global pharma majors.

Winds of Change in South Africa:

Now South Africa has also exhibited its firm intent to have a tight leash on the grant of pharmaceutical patents of all types.

A recent report indicates that the Department of Trade and Industry (DTI) of the Government of South Africa is calling for comments on its proposed ‘National Policy on Intellectual Property’ by October 4, 2013, which if implemented, would significantly curb patent evergreening and expand production of generics.

The same report mentions that at present, South Africa does not examine patent applications. Instead, the system allows pharmaceutical companies to obtain multiple patents on the same drug, even for inventions, which do not fall under the country’s definition of innovation. This allows the pharma players to extend their respective patent lives, blocking competition and charging exorbitant prices.

The report also points out, while in 2008, South Africa granted 2,442 pharmaceutical patents, Brazil approved only 278 in the 5 years between 2003 and 2008.

Patents revoked in India:

Since November 2010 following 8 MNC patents have been revoked in India after respective patent challenges:

Combigan and Ganfort of Allergan (for specified eye conditions)
Tykerb of GSK (for breast cancer)
Sutent of Pfizer (for liver and kidney cancer)
Pegasys of Roche (for hepatitis C)
Iressa of AstraZeneca (Anti-cancer)
Anti-asthma FDC aerosol suspension of Merck & Co (Anti-asthma)
Dulera of Novartis (Anti-asthma)

China and Brazil revoked patents:

In August 2013, 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 (APIs) 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.

Top 10 ‘jaw-dropping’ most expensive medicines of the world:

No.	Name	Disease	Price US$ /Year
1.	ACTH	Infantile spasm	13,800,00
2.	Elaprase	Hunter Syndrome	657,000
3.	Soliris	Paroxysmal nocturnal hemoglobinuria	409,500
4.	Nagalazyme	Maroteaux-Lamy Syndrome	375,000
5.	Folotyn	T-Cell Lymphoma	360,000
6.	Cinryze	Hereditary Angioedema	350,000
7.	Myozyme	Pompe	300,000
8.	Arcalyst	Cold Auto-Inflammatory Syndrome	250,000
9.	Ceredase / Cerezyme	Gaucher Disease	200,000
10.	Fabrazyme	Fabry Disease	200,000

(Source: Medical Billing & Coding, February 6, 2012)

The good news is, protests against such ‘immoral and obscene pricing’ have started mounting, which are expected to have a snow-balling effect in the years ahead.

Mounting global protests:

Probably due to this reason, drugs used for the treatment of rare diseases are being reported as ‘hot properties for drug manufacturers’, all over the world.

The above report highlighted a changing and evolving scenario in this area.

In 2013, the Dutch Government had cut the prices of new enzyme-replacement therapies, which costs as high as US$ 909,000. Similarly, Ireland has reduced significantly the cost of a cystic fibrosis drug, and the U.K. rejected a recommendation to expand the use of a drug for blood disorders due to high costs.

Soon, the United States is also expected to join the initiative to reduce high prices of orphan drugs as both the government and private insurers increasingly come under the cost containment pressure.

Emerging markets – the Eldorado:

Competition within MNCs is expected to be even more fierce in the coming years as the developed markets continue to slow down, as follows, due to various reasons:

No.	Country	USD Bn.	% Share	Val. Gr.
	Global Pharma Market	961	100	5
	USA	329	38	-1
	Japan	112	13	0
	China	82	10	24
	Germany	42	5	-6
	France	37	4	-8
	Brazil	29	3	6
	Italy	27	3	-8
13.	India	14	1	11

Source: IMS Knowledge Link Global Sales 2012

This compelling scenario is prompting a change in the dynamics of competition within MNCs in the emerging pharmaceutical markets. The intents of Fresenius Kabi and Mylan, as enunciated above, I reckon, are just very early signals of this challenge of change.

All these would probably help turning the tide in favor of a seemingly win-win solution to bring down the prices of patented medicines at an affordable level, improving their access to vast majority of patients in the world.

Scope for more patent challenges in India:

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.”

Therefore, this process is expected to gain momentum in the years ahead as more MNCs join the fray of patent challenges, though driven primarily by business interests, but nevertheless, would benefit the patients, in the long run.

Further, as indicated in my previous columns, a study 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 challenged, some experts envisage, these patents may not be able to stand the scrutiny of section 3(d) of the Indian Patents Act.

In that sense, if the pharma MNCs with deep pockets, challenge these patents, there stands a good chance of making generic equivalents of those products at affordable prices for the Indian patients.

However, considering different degree and elements of market entry barriers, it appears, most of the patent challenges in India by the MNCs would probably be for biologics, as compared to small molecule chemicals.

Flow of newer drugs in the Indian market is now irreversible:

Taking stock of the emerging scenario, it appears, India will continue to see newer drugs coming into the market at a lower price in the years ahead, come what may. This flow seems to be unstoppable due to the following reasons:

Stricter implementation of Section (3d) of the Patents Act in India will ensure that NCEs/NMEs not conforming to this act will not be granted patents. In that case, those products will be open to generic copying by all, in India. Thus, in the absence of a market monopoly situation and fuelled by intense price competition, the patients will have access to those newer drugs.

More patent challenges of already granted patents could lead to revocation of more number of patents paving the way for entry of their generic equivalents.

If any MNC decides not to launch a new product in India having obtained its patent from the IPO, after three years, as per the statute, the same product becomes a candidate for CL in the country.

If any patented new product is launched without ‘reasonably affordable price’, again as per statute, the possibility of applications for CL coming to the IPO from the local players will loom large.

Hence, considering all these points, it appears, if the new products do not conform to the Indian Patents Act and are not launched with responsible pricing, the possibility of their generic entry at much lower prices is almost inevitable.

Conclusion:

Legal battle is expensive, even in India, and patent challenges are perhaps more expensive. All those new products, which are not patentable in India or may otherwise be challenged against other statutes of the Patents Act, will carry risks of getting caught in protracted litigations or generic competition.

MNCs with deep pockets coming forward with such intent, though may be based purely on their business interest in India, would ultimately offer spin-off benefits of affordable pricing, especially, to the patients suffering from life threatening and fast debilitating illnesses like, cancer.

That said, do all these developments unravel yet another way to improve access to newer medicines in India, signaling a boon for patients?

By: Tapan J. Ray

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

Posted on August 12, 2013 by Tapan Ray

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.

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

Does the Landmark Glivec Judgment Discourage Innovation in India?

Posted on April 8, 2013 by Tapan Ray

No, I do not think so. The 112 pages well articulated judgment of the Supreme Court of India delivered on April 1, 2013, does not even remotely discourage innovation in India, including much talked about ‘incremental innovation’. This landmark judgment reconfirms the rules of the game for pharmaceutical innovation, as captured in the Indian Patents Act 2005.

When one reads the judgment, point 191 in page number 95 very clearly states as follows:

Thus all ‘incremental innovations’, which some people always paint with a general broad brush of ‘evergreening’, should no longer be a taboo in India. The judgment just says that Glivec is not patentable as per Section 3(d) of Indian Patents Act based on the data provided and arguments of Novartis.

To me, the judgment does also not signal that no more Glivec like case will come to the Supreme Court in future. It vindicated inclusion of Section 3(d) in the amended Indian Patents Act 2005.

It is interesting to note that honorable Supreme Court itself used the terminology of ‘incremental innovation’ for such cases.

That said, I find it extremely complex to imagine what would have happened, if the judgment had gone the opposite way.

A critical point to ponder:

The judgment will also mean that all those products, having valid product patents abroad, if fail to meet the requirements of Section 3(d), will not be patentable in India, enabling introduction of their generic equivalents much sooner in the country and at the same time causing a nightmarish situation for their innovators.

However, this again, in no way, is an outcome of this judgement or a new development, as stated above. It is just vindication of the intent behind inclusion of Section 3(d) in the amended Indian Patents Act, when it was enacted by the Parliament of India in 2005.

Patentability of ‘Incremental Innovations’ in India:

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

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.”

Supreme Court interpretation of the term “Efficacy” in Section 3(d):

The Honorable Supreme Court in page 90 of its above order under point 180 stated that in case of medicines, efficacy can only be “therapeutic efficacy”, which must be judged strictly and narrowly. The interpretation goes as follows:

180. “What is “efficacy”? Efficacy means ‘the ability to produce a desired or intended result’. Hence, the test of efficacy in the context of section 3(d) would be different, depending upon the result the product under consideration is desired or intended to produce. In other words, the test of efficacy would depend upon the function, utility or the purpose of the product under consideration. Therefore, in the case of a medicine that claims to cure a disease, the test of efficacy can only be “therapeutic efficacy”.

The Honorable Court under the same point 180 further elaborated:

“With regard to the genesis of section 3(d), and more particularly the circumstances in which section 3(d) was amended to make it even more constrictive than before, we have no doubt that the “therapeutic efficacy” of a medicine must be judged strictly and narrowly…Further, the explanation requires the derivative to ‘differ significantly in properties with regard to efficacy’. What is evident, therefore, is that not all advantageous or beneficial properties are relevant, but only such properties that directly relate to efficacy, which in case of medicine, as seen above, is its therapeutic efficacy.”

Based on this interpretation of Section 3(d), the Honorable Supreme Court of India ordered that Glivec does not fulfill the required criteria of the statute.

The rationale behind Section 3(d):

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.

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.

IPA challenges: 86 pharmaceutical patents granted by IPO fall under Section 3(d):

Possible implications to IPA challenge:

If the argument, as expressed above in the IPA study, is true by any stretch of imagination, in that case, there exists a theoretical possibility of at least 86 already granted product patents to get revoked. This will invite again another nightmarish situation for innovators.

Examples of revocation of patents in India:

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

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

Prior to this, on November 2, 2012 the IPAB revoked the patent of Pegasys (Peginterferon alfa-2a) – the hepatitis C drug of the global pharmaceutical giant Roche.

Though Roche was granted a patent for Pegasys by the Indian Patent Office (IPO) in 2006, this was subsequently contested by a post-grant challenge by the large Indian pharma player – 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 Section 3(d) of Patents Act of India 2005.

It is worth noting, although the IPO had rejected the patent challenges by Wockhardt and SRT in 2009, IPAB reversed IPO’s decision revoking the patent of Pegasys.

Similarly the patent for liver and kidney cancer drug of Pfizer – Sutent (Sunitinib) granted by 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.

Patent challenges under section 3(d) may come up even more frequently in future:

Some observers in this field have expressed, although ‘public health interest’ is the primary objective for having Section 3(d) in the Indian Patents Act 2005, many generic companies, both local and global, have already started exploiting this provision as a part of their ‘business strategy’ to improve business performance in India, especially when an injunction is usually not being granted by the honorable Courts for such cases on public health interest ground.

Thus, as stated above, there is likely to be many more cases like, Glivec coming before the Supreme Court in the years ahead.

Another related development of the last week:

It has been reported that American pharma major MSD has last week filed a suit in the Delhi High Court against Indian pharma major – Glenmark for alleged patent violation of its leading anti-diabetic drugs Januvia and Janumet. In this case also no interim injunction has reportedly been granted to MSD by the Honorable Delhi High Court.

Glenmark has stated through a media report, “It is a responsible company and has launched the products after due diligence and research.” The company has also announced that their version of the molecule named Zita and Zita Met will be available to patients at a 20 percent discount to MSD’s price.

Hence, once again, the Indian court to decide, the balance of justice would now point to which direction.

Government has no role to play – patent challenge is a legal process across the world:

The proponents of ‘no change required in the Section 3(d)’ argue, ‘Patent Challenge’ is a legal process all over the world, the Government has hardly got any role to play in settling such 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 for vested interests.

Arguments against Section 3(d):

Opposition to the Section 3(d) counter-argues by saying, this is a critical period for India to help fostering an appropriate ecosystem for innovation in the country. This group emphasizes, “Providing the right incentives for incremental pharmaceutical innovation can move India forward on this path and encourage the development of drug products that meet the needs of Indian patients. Reforming Section 3(d) to encourage and protect incremental pharmaceutical innovation would create such incentives and help India become a true powerhouse of innovation.”

Another group says that the main reason in favor of Section 3(d) being the provision will prevent grant of frivolous patents, the ultimate fallout of which will result in limited access to these drugs due to high price, is rather irrelevant today. This, they point out, is mainly because the Government is now actively mulling a structured mechanism of price negotiation for all patented drugs to improve their access to patients in India.

Importance of ‘Incremental Innovation’ in India:

Incremental innovations are indeed very important for the country and have been benefiting the patients immensely over decades, across the world.

A report titled, “The Value Of Incremental Pharmaceutical Innovation” highlighted as follows:

As per the National Knowledge Commission, while 37.3% of Indian companies introduced breakthrough innovations in recent years, no fewer than 76.4% introduced incremental innovations.

60 percent of the drugs on the World health Organization’s essential Drug list reflect incremental improvements over older drugs.

The report indicates some of the benefits of ‘Incremental Pharmaceutical Innovation’ for India as follows:

Improved quality of drug products, including products that are better suited to India’s climate.
Development of treatments for diseases that are prevalent in India for which new drug discovery is currently limited or otherwise inadequate.
Increasing likelihood that for every therapeutic class, there is a treatment to which an Indian patient will respond.
Development of the R&D capacity and expertise  of Indian pharmaceutical companies.
Reduction of healthcare and other social costs in India through improved drug quality and selection.
Increased access to medicine as a result of price competition.

The study concluded by saying that Section 3(d) potentially precludes the patenting of hundreds of incremental pharmaceutical innovations that Indian companies are attempting to patent and commercialize outside India.

There are umpteen numbers of examples that can ably demonstrate, ‘incremental innovation’ of the pharmaceutical innovators help significantly improving the efficacy and safety of existing drugs. All such innovations should in no way be considered “frivolous” as they have very substantial and positive impact in improving conditions of the ailing patients.

Be that as it may, the Supreme Court judgment has categorically mentioned that all ‘Incremental innovations’ should conform to the requirement of the Section 3(d) of the statute.

“West should learn from India’s high patent standards”

An article appeared just yesterday written by a well-regarded Indian economist recommended, “West should learn from India’s high patent standards”. It observed that over-liberal patent system of the West is now broken and it should learn from India’s much tougher patent system.

Patent monopolies needs to be given only for genuine innovations, as defined in the Indian Patents Act 2005, where the public benefits clearly exceed the monopoly cost.

The author concluded by saying, “This means setting a high bar for innovation. High standards are desirable for patents, as for everything else.”

View of the Glivec inventor:

In another interview titled, “If you erode patents, where will innovations come from?” Dr Brian Druker, whose work resulted in the development of Glivec, re-emphasizing the need for R&D by the pharmaceutical industry, commented, “I’m going to stay away from the legal judgment … but as a physician, I do recognize that the advances will come from new products, not modifications.”

Are discordant voices out of step with time?

The interpretation of the Section 3(d) of the statute by the Honorable Supreme Court of India is the last word for all, despite a few voices of discord from within and mostly outside India. These voices, many would reckon, could well be out of step with time, especially in relatively fast growing, modern, independent, thinking and assertive young India.

Conclusion:

In my view, nothing materially has changed on the ground before and after the Supreme Court judgment on the Glivec case so far as the Indian Patents Act is concerned and also in its interpretation.

While encouraging all types of innovations, including incremental ones and protecting them with an effective IPR regime are very important for any country. No nation can afford to just wish away various socioeconomic expectations, demands and requirements not just of the poor, but also of the growing middle class intelligentsia, as gradually getting unfolded in many parts of the globe.

Available indicators do point out that the civil society would continue to expect in return, just, fair, responsible and reasonably affordable prices for the innovative medicines, based on the overall socioeconomic status of the local population.

This critical balancing factor is essential not only for the progress of the pharmaceutical industry, but also to alleviate sufferings of the ailing population of the country, effectively.

For arguments sake, in an ideal scenario, if the Central and State Governments in India decide to buy such drugs to supply to all patients free of cost, just like any ‘welfare state’, will even the Government be able to afford these prices and fund such schemes in India?

It is, therefore, now widely expected that innovator pharmaceutical companies, which play a pivotal role in keeping population of any nation healthy and disease free to the extent possible, should also proactively find out ways to help resolving this critical issue in India, working closely with the Government of 1.2 billion Indians, including other concerned stakeholders.

In that context, the landmark Supreme Court judgment on the Glivec case has vindicated the need of striking a right balance between encouraging and protecting innovation, including incremental ones and the public health interest of India.

By: Tapan J. Ray

Government Ups the Ante for More Compulsory Licenses in India

Posted on January 21, 2013 by Tapan Ray

On January 12, 2013, one of the leading dailies of India first reported that in a move that is intended to benefit thousands of cancer patients, Indian Government has started the process of issuing Compulsory Licenses (CL) for three commonly used anti-cancer drugs:

- Trastuzumab (or Herceptin, used for breast cancer),

- Ixabepilone (used for chemotherapy)

- Dasatinib (used to treat leukemia).

For a month’s treatment drugs like, Trastuzumab, Ixabepilone and Dasatinib reportedly cost on an average of US$ 3,000 – 4,500 or Rs 1.64 – 2.45 lakh for each patient in India.

CL through a different route:

This time the government can reportedly notify its intent to grant CL under Section 92 of the Indian Patents Act 2005, only if any of the following three conditions are met:

- National emergency

- Cases of extreme urgency

- Public non-commercial use

After such Government notification in the gazette, any company interested in manufacturing any or all of these three products can directly apply for a CL to the Indian Patent Office (IPO).

This route is also expected to save usual litigation costs for the interested pharmaceutical players.

In such case, this will be the first time in India, when instead of pharmaceutical players applying for CL the Government on its own will trigger the CL process.

A situation like this will undoubtedly signal immense unpredictability in the IPR environment of the country.

Incongruent with the New Drug Policy 2012:

Interestingly, section 4(xv) of the National Pharmaceutical Pricing Policy 2012 (NPPP 2012) under ‘Patented Drugs’ states as follows:

“There is a separate Committee constituted by the Government order dated 1st February, 2007 for finalizing the pricing of Patented Drugs, and decisions on pricing of patented drugs would be taken based on the recommendations of the Committee.”

A media report also highlighted that an inter-ministerial group constituted for regulating prices of patented medicines in India has recommended using a per capita income-linked reference pricing mechanism for such products.

Thus, it is rather intriguing for many to fathom, why is the Government contemplating to grant CL on the above three anti-cancer drugs in January 2013, despite the decision of the Union Cabinet on the same in the new Drug Policy as recent as December, 2012.

Medicines come at the third stage of a medical treatment process:

For all patients, including the cancer victims, medicines will come at the earliest in the third stage of any treatment process, the first two or in some cases first three stages being:

A doctor’s intervention
Correct diagnosis through diagnostic processes
Surgical interventions (in some cases)

In India, there is no regulation to address the ‘cost issues’ of the first two or three stages of treatment, though there is a dire need to facilitate the entire process and not just one. Coming straight to cancer medicines considering these as the only ‘magic wands’ to improve access to treatment, may well be considered as ‘jumping the gun’ by the Government, if not an imprudent decision.

Skewed healthcare distribution in India:

Healthcare distribution in India is rather skewed and cancer treatment is no exception mainly because of the following reasons:

Medical personnel are concentrated in urban areas.
74 percent of doctors work in urban settlements, which is just around 1/4^th of the population.
61 percent of the medical colleges are in the 6 states of Maharashtra, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Pudicherry.
Whereas, just 11 percent of these are located in Bihar, Jharkhand, Orissa, West Bengal and the north-eastern states
369,351 government beds are in urban areas and a mere 143,069 beds in the rural areas.
Rural “doctors to population” ratio is lower by 6 times as compared to urban areas.

(Source: KPMG Report 2011)

Huge healthcare Infrastructural Deficiencies:

In India, not just compared to the developed nations, even as compared BRIC countries, there is a huge infrastructural deficiencies as follows:

Indicators	Year	India	US	UK	Brazil	China
Hospital Bed Density(Per 10000 population)	2011	12	31	39	24	30
Doctor Density(Per 10000 population)	2011	6	27	21	17	14

(Source: WHO, World Health Statistics 2012)

0.6 doctors per 1000 population as against the global average of 1.23 suggests an evident manpower gap in the very first stage of a treatment process.
Number of beds available per 1000 people in India is only 1.2, which is less than half of the global average of 2.6.

Coming to Medical Colleges, the scenario is equally dismal, as follows:

Year	Number of Medical Colleges	Total Admissions
2011-2012	314	29,263
	No of dental Colleges	Total Admissions
2011-2012	289	2783

(Source: Medical Council of India & Dental Council of India)

Thus, India needs to open around 600 medical colleges (100 seats per college) and 1500 nursing colleges (60 seats per college) in order to meet the global average of doctors and nurses.

(Source: KPMG Report 2011)

Shortages in other healthcare professionals:

It has been reported that a deficit of 64 lakh (6.4 million) allied healthcare professionals India with highest gaps in Maharashtra, Uttar Pradesh, West Bengal, Bihar and Andhra Pradesh, is a stumbling block in providing basic and quality healthcare to Indian population, as follows:

Healthcare Professionals	Shortage
Anesthetists and technicians	850,000
Dental staff	2.04 Million
Ophthalmologists and optometrists	127, 000
Rehabilitation specialists	1.8 Million
Medical laboratory technicians	61,000
Radiographers	19,000
Audiology and speech language specialists	7,500
Medical staff	230,000

(Source: Times Of India, December 20, 2012)

Is the Government ‘missing the woods for the trees’?

In a scenario like this, it is rather impractical to envisage that routine grant of compulsory licenses by the Indian Patent Office will be able to resolve the critical issue of improving access to patented medicines on a long term basis.

Not many CL granted between 1995-2012:

Despite having the provisions of CL in the Patents Act of many countries, not many CLs have been granted across the world from 1995 to date for the obvious reasons.

The details are as follows:

Country	Medicine	CL granted in:
Israel	Hepatitis B Vaccine	October 1995
Italy	Imipenem (antibiotic)	June 2005
Italy	Sumatriptan Succinate (migraine)	February 2006
Canada	Oseltamivir (influenza)	July 2006
Brazil	Efavirenz (HIV/AIDS)	May 2007
Thailand	Erlotinib, Docetaxel (cancer)	January 2008
India	Sorafenib Tosylate (cancer)	March 2012

Source: DNA, March 9, 2012

An interesting paper:

However, I hasten to add that despite all these, the provision of CL in the Indian Patents Act 2005 has immense relevance, if invoked in the right kind of circumstances.

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.

Right pricing of patented drugs is critical:

While there is no single or only right way to arrive at the price of an IPR protected medicine, how much the pharmaceutical manufacturers will charge for such drugs still remains an important, yet complex and difficult issue to resolve, both locally and globally. Even in the developed nations, where an appropriate healthcare infrastructure is already in place, this issue comes up too often mainly during price negotiation for reimbursed drugs.

A paper titled, “Pharmaceutical Price Controls in OECD Countries”, published by the US Department of Commerce after examining the drug price regulatory systems of 11 OECD countries concluded that all of them enforce some form of price controls to limit spending on pharmaceuticals. The report also indicated that the reimbursement prices in these countries are often treated as de facto market price.

In India, the Government is already mulling to put in place a similar mechanism for patented medicines, as captured in the NPPP 2012.

Further, some OECD governments regularly cut prices of even those drugs, which are already in the market. The values of health outcomes and pharmacoeconomics analysis are gaining increasing importance for drug price negotiations/control by the healthcare regulators even in various developed markets of the world to ensure responsible pricing of IPR protected medicines.

An evolving global trend:

To address such pricing issues, global pharmaceutical majors, like GSK and Merck (MSD) have already started following the differential pricing model, based primarily on the size of GDP and income status of the people of the respective countries. This strategy includes India, as well.

Reference pricing model is yet another such example, where the pricing framework of a pharmaceutical product will be established against the price of a reference drug in reference countries.

An innovative approach to address patented products’ pricing:

To effectively address the challenge of pricing of patented medicines in India, Swiss drug major Roche, has reportedly entered into a ‘never-before’ technology transfer and manufacturing contract for biologics with a local Indian company – Emcure Pharma, for its two widely acclaimed Monoclonal Antibodies’ anti-cancer drugs – Herceptin and MabThera.

The report says that in the past, Emcure had signed licensing deals with US-based bio-pharmaceutical drug maker Gilead Life Sciences for Tenafovir and with Johnson and Johnson for Darunavir. Both are anti-HIV drugs.

In this regard, media reports further indicated that Roche would offer to Indian patients significantly cheaper, local branded versions of these two anti-cancer drugs by early this year. The same news item also quoted the Roche spokesperson from Basel, Switzerland commenting as follows:

“The scope is to enable access for a large majority of patients who currently pay out of pocket as well as to partner with the government to enable increased access to our products for people in need”.

Such ‘out of box’ strategies and initiatives by the global innovator companies could help keeping prices of patented products affordable to the Indian patients, improving their access significantly and making the likes of the current Government initiative on CL irrelevant.

Conclusion:

It is generally accepted that the provisions for CL in the Indian Patents Act 2005 has utmost relevance in terms of public health interest for all concerned.

However, keeping in view of recent policy announcement in the NPPP 2012, as approved by the Union Cabinet, on price negotiation for patented products, the reported Government move of invoking these provisions for three anti-cancer drugs is rather intriguing.

Moreover, even for the cancer patients, there seems to be a greater urgency to attend to basic healthcare infrastructural and delivery issues, besides providing Universal Health Coverage (UHC) as recommended by the High Level Experts Group (HLEG) constituted for this purpose by the Government.

Far encompassing critical decisions like grant of CL, I reckon, should be taken only after exhausting all other access improvement measures.

Thus, recent news reports on the possibility of further grant of three more CLs could make the pharmaceutical business environment for the innovator companies in India more uncertain.

Demonstrable predictability for an innovation friendly environment is critical for the economic growth of India, which the Government should not lose sight of. Just upping the ante for more CL of anti-cancer drugs will not necessarily help improving access to cancer treatments in India.

By: Tapan J. Ray

PILMAN

A Tapan Ray Website

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