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

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

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

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

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

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

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

Indian Pharmaceutical Industry to build on its acquired strength:

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

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

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

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

Increasing opportunity to collaborate with the global companies:

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

Contract research and manufacturing:

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

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

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

Some concerns in the new regime:

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

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

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

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

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

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

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

Conclusion:

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

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

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

By Tapan Ray

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

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

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

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

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

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

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

Why are these observations interesting?

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

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

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

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

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

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

Event 4

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

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

Event 3

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

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

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

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

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

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

Event 2

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

Event 1

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

Ground Zero:

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

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

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

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

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

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

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

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

By Tapan Ray

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