Dwindling Drug Innovation: Declining Image: Unchanged Business And Advocacy Models

Posted on February 20, 2017 by Tapan Ray

A report of ‘The United States International Trade Commission (USITC)’ released on December 22, 2014 suggested, if tariffs and investment restrictions were fully eliminated, and standards of IP protection were made comparable to the U.S and Western European levels, American exports to India would rise by two-thirds.

A year later, on February 01, 2015 an interesting news article highlighted that the flashpoint of this issue “has clearly been pharmaceutical companies and their lobby group Pharmaceutical Research and Manufacturers of America (PhRMA), which have made some of the strongest representations to the US government against India’s IPR regime.” The same report also indicated that many other companies including the aircraft maker Boeing and the generic drug giant Abbott felt that India offered adequate IP protection and that they had not experienced major IP problems in the country.

The above stance of USITC continued echoing right from the beginning of this year. In January 2017, the CEO of US Biotechnology Innovation Organization (BIO) reportedly told our Prime Minister Narendra Modi, ‘if he follows western practices on intellectual property protection, his country would see a “tidal wave” of biotech industry investment.’

On February 08, 2017, when the fifth edition of ‘U.S. Chamber International IP Index’ report was released by the ‘Global Intellectual Property Center (GIPC)’, India featured in the 43^rd rank out of 45 countries. With this India remained virtually at the bottom of the IP index for the fourth year on the trot. The GIPC report underscored India’s “anaemic IPR policy”, Section 3.d of the Indian Patents Act, besides several others, as major market access barriers.

On February 14, 2017, another news article reported that America’s pharma sector has asked the US Trade Representative (USTR) to continue to keep India on its Priority Watch List (PWL), which includes countries that are alleged violators of US patent laws, claiming that the environment on the ground remains ‘challenging’ in India. Among the areas of concern for the US pharma companies operating in India, unpredictable IP environment, high tariffs and taxes on medicines, regulatory data protection failure, discriminatory and non-transparent market access policies and unpredictable environment for clinical research were listed among others.

With this backdrop, the key question that haunts many industry watchers, when the World Trade Organization (WTO) has no complaint with the Indian Patents Act 2005, and finds it TRIPS compliant, why are these reports coming from the United States consistently emphasizing that the current IP regime of the country is a key barrier to market access, especially for research-based pharma companies?

Is the core issue of the global pharma industry in India is predominantly not encouraging innovation well enough, or the dearth of inadequate Intellectual Property (IP) protection – or it is something beyond that, and is more fundamental in nature. In this article, I shall dwell in this area, first in the global perspective, and then zeroing-in to India.

A global perspective:

“The past 60 years have seen huge advances in many of the scientific, technological and managerial factors that should tend to raise the efficiency of commercial drug research and development (R&D). Yet the number of new drugs approved per billion US dollars spent on R&D has halved roughly every 9 years since 1950, falling around 80-fold in inflation-adjusted terms. There have been many proposed solutions to the problem of declining R&D efficiency. However, their apparent lack of impact so far and the contrast between improving inputs and declining output in terms of the number of new drugs make it sensible to ask whether the underlying problems have been correctly diagnosed,” articulated an important article published on March 01, 2012 in the Nature Reviews Drug Discovery.

This trend continues, virtually unchanged. R&D efficiency continues to remain a cause of great concern to the research-based global pharmaceutical companies. Accordingly, a 2016 report of the Deloitte Center for Health Solutions titled, ‘Measuring the return of pharmaceutical innovation’, among other findings, has captured the following:

Annual projected pharma R&D return declines to 3.7 percent from 10.1 percent in 2010
Peak sales per asset fall 11.4 percent year-on-year since 2010

What then is its basic solution?

When the right solution eludes:

In this scenario, when the right solution is still eluding, to record growth in corporate profit and earning to meet shareholders’ expectations, keeping the existing business model intact, the global research-based pharma companies have the following two limited options, which they are actively pursuing:

Take high price increases for the existing products
Launch the limited new products at a very high price

A report published in The First Word Pharma on October 06, 2015 quoting The Wall Street Journal (WSJ) vindicated exercising the first option. It reported that many drug makers have succeeded in increasing revenue on products despite a flat or declining demand by consistently increasing prices. An analysis revealed that revenue for the top 30 products in the United States zoomed by 61 percent over the past five years, three times the increase in the number of prescriptions sold over that period. While another report by Credit Suisse illustrated that 80 percent of the growth in net profit for the top 20 drug makers was attributable to price hikes.

To substantiate application of the second option, I quote from the CBS News, which on April 05, 2016 reported that an investigation into the cost of prescription drugs revealed huge price hikes over the past five years. Several brand name medications more than doubled in price. Again, on August 24, 2016, it gave a sense of this trend with the following examples, covering the launch price of innovative drug, and price increases of generic drugs:

Gilead fixed their new hepatitis C drug Sovaldi’s cost at US$ 900 – 1,000 per pill
Mylan Pharmaceuticals’ increased the cost of its anti-allergic drug EpiPen from about US$ 57 in 2007 to more than US$ 500 in 2016
Turing Pharmaceuticals increased the price of the anti-malaria drug Daraprim by 5,000 percent last year, charging US$ 750 per pill for a drug that used to cost US$ 13.50 per pill.

PhRMA – the often quoted trade association in America, representing the country’s leading pharma and bio-pharmaceutical research-based companies, reportedly said in a statement: “Focusing solely on the list prices of medicines is misleading because it ignores the significant discounts and rebates negotiated by insurers and pharmacy benefit managers.”

Even if, this argument is accepted as such, the tough impact of regular hefty drug price increases on the consumers is real, unquestionably.

The current business model leaves behind many patients:

The ‘Access to Medicine Index 2016’ report also finds that companies generally do not systematically target populations with the highest needs in their registration, pricing and licensing actions. Although, we continue to make progress toward major public health goals, such as, polio is close to being eradicated, as is guinea worm; more than 45 percent of people living with HIV/AIDS have access to ARVs; important vaccines for malaria and dengue fever are being implemented, still business models for providing healthcare are leaving many people behind. Globally, two billion people cannot access the medicines they need, most of whom live hand to mouth.

Particularly, the big global pharma companies, as the innovators and producers of life-saving medicines, need to act much earlier in the patients’ value chain. Without or inadequate action by these companies, alongside governments, NGOs and others, it will be impossible to bring modern medicine to everyone.

Public outrage over high drug prices:

Many studies indicate that the research-based global pharma and biotech companies, still strive hard to stick to their existing overall business models with a sharp focus on improving both the top and bottom lines of the business, though the R&D projects are becoming lesser and lesser productive. This prompts them resorting to hefty price increases, and introducing new products with high price. Fueled by this self-serving mindset, a simmering public outrage, globally, over high drug prices is fast catching up, further undermining the trust in the industry, as another report says.

No wonder why in the Gallup Poll of August 15, 2016, pharmaceutical industry featured just one above the bottom among the ‘Worst-Rated U.S. Business Sectors’. Moreover, even the Harris Poll released on January 17, 2017 found that 91 percent of U.S. consumers believe pharmaceutical and biotechnology companies put profits over patients.

The industry continues chasing rainbows:

In response to this mounting stakeholders’ criticism, arguably the richest pharma association in the world in its member subscriptions – PhRMA, reportedly launched a new ad campaign costing tens of millions of dollars on January 25, 2017. It aims to highlight innovation and scientific breakthroughs to change the public’s negative perception of the industry. This campaign will span across television, print, digital, and radio, the report elaborates.

Following is an example, as reported, listing three important and interesting comments on this campaign for pharma image revamp from some of those who matter:

Lawmaker Peter Welch, who chairs the House Democratic Caucus’ task force on drug pricing, said, “The issue here is not whether drugs have some benefits … The issue is whether pharma is going to be able to kill us with their pricing power or whether we will get transparency and competition.” He added, “The campaign is all about defending their pricing power and pushing their product.”

Similarly, another lawmaker Sen. Chuck Grassley (R-Iowa) said, “This is [PhRMA] trying to change the subject and to try and divert people’s attention away from drug pricing. Continuing to ignore drug pricing is probably not going to work.”

Ameet Sarpatwari, a drug pricing policy researcher at Harvard University said, “It’s really a matter of being tone deaf in terms of thinking somehow that this is going to change public perception”

Isn’t a great example of chasing rainbows by the industry association, in the number one pharma and biotech market of the world, instead of amending to the root cause of this burning issue?

The situation in India:

In this backdrop, amid a tough global situation, let me assess the related Indian scenario.

The research-based global pharma companies, apparently want to introduce the whole range of their patented products at a high price and in a monopolistic situation in India too, for much higher growth in revenue and profits. Thus, they are consistently pushing hard, with all guns blazing, for major changes in the Indian Patents Act 2005, which would involve jettisoning many patients’ health interest related safeguard conditions enshrined in the Act, such as Section 3.d that restricts ever-greening of patents, and introducing several other tougher IP measures, such as data exclusivity under the garb of imaginary patient safety issues with generic drugs.

They don’t seem to like price control of essential drugs in India, either. While intensely lobbying for it, the lobbyists vehemently argue in favor of the absurd, which is the affordability of medicines does not help to increase drug access to all those who need these most, even when on the ground, the out of pocket expenses for drugs in the country is as high as around 65 percent and universal health care does exist in the country, much to the dismay of many.

It has now been generally established by many global experts, including our own National Pharmaceutical Pricing Authority (NPPA) that market competition does not necessarily bring down drug prices, including for generics, quite unlike many other industries, but various pressure groups, including the media, can catalyze it, and quite effectively. What has happened recently with the cardiac stents price in the country, is just an example.

Is the devil in the traditional pharma business model?

An article titled, “How Pharma Can Fix Its Reputation and Its Business at the Same Time”, published on February 03, 2017 in The Harvard Business Review, emphatically states: “It’s a fact that the current business model of pharma companies is not working efficiently.” It suggests, besides enhancing the current unenviable public image of the industry, expanding access to medicines will help pharma companies enhance shareholder value. The success of a new business model depends on both the willingness and the ability of pharmaceutical companies to fully integrate access to medicine into their business strategies, the article emphasizes.

A July 2015 paper of McKinsey & Company titled, “Pharma’s next challenge”, also reiterates that in the developed economies, market access is chiefly concerned with pricing, and with satisfying local conditions. Whereas, in the emerging markets, to overcome the barriers, pharma players need to shift the focus of their commercial models from marketing and sales to access, and from brand-by-brand access planning to integrated cross-brand planning.

In pursuit of a new model:

Based on the above premises, the search for a new pharma business model, especially for the research-based pharma companies, in my view, may broadly focus on the following areas:

Learn from innovation models of the IT industry: Win-Win collaborative innovation models, including ‘Open Source Drug Discovery’, if scaled up, could reduce the cost of innovation significantly and making the new innovative drugs generally affordable. Thus, larger volume sales may adequately offset a voluntary cut in the product margin, creating a multiplier effect.

Be a part of the solution and not the problem: Because of fiercely pushing the blatant self-serving agenda, inconveniencing many patients, the core mindset of the pharma industry is considered by many as an integral part of the main problem. While pharma industry, quite rightly, seek more market access, they need to act as a facilitator too, to improve general access to medicines, in various imaginative ways, which is, of course, possible. This will make the pharma industry to be a part of the solution to the national problem, over a period of time.

Walk the talk: While pharma industry speaks all right things, in terms of ethical conduct of business, at a time when both national and international media frequently expose their gross wrongdoings. This continues, unabated. Sales and marketing functions are indeed very important, but not at the cost of good corporate governance. I am aware, all compliance rules exist immaculately on paper for many companies, but the senior management officials should demonstrate that they walk the talk, giving exemplary punishment to the wrongdoers, including their peers.

Change the current advocacy model: The current advocacy model of the research-based pharma companies is too self-serving. For example, in India it mostly demands, which is bordering obsession, to change the IP laws of a sovereign country, when the World Trade Organization (WTO) has no problem with these, whatsoever. There is a need for them to demonstrate, sans any shade of arrogance, visible respect to any country’s general sentiment on its Patents Act, as it’s their own decision to operate in those countries. An imaginative win-win change in this area, would significantly help to create a strong bond and mutual respect with other important stakeholders.

Are senior citizens in pharma business a barrier to change?

A recent white paper of ‘Eye for Pharma’, says in its conclusion “many of those now running pharma organizations have come through the ‘golden age’ of pharma and so may be reluctant to change”. Does this issue need to be addressed first by the Independent Directors of the respective Boards of the pharma companies?

In conclusion:

Many questions do spring up while addressing this issue. One common belief is that, pharma industry, in general, is reluctant to change its traditional business model, beyond just tweaking, despite declining overall productivity and in its public image.

In advocacy initiatives, while drawing stakeholders’ attention to the core grievance agenda, though they try hard to project their business focus on patients, especially using the buzzwords, such as, ‘patient centric approach’ or ‘patient engagement’, among many others, has anything visibly changed, just yet?

As the business environment is getting tougher and consumer expectations are fast changing, drug innovation is also steadily dwindling, so is the declining industry image. However, pharma business and advocacy models continue to remain mostly unchanged. It remains intriguing, why are the ‘wise guys’ of pharma business still so deeply obsessed with chasing rainbows, with so much of zeal, hectic activity and money, while majority of patients keeps bearing the brunt?

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.

Indian Patents Act To Prevail Undiluted…Finally

Posted on July 27, 2015 by Tapan Ray

Curiously enough, what a little birdie told me just a couple of weeks ago, very similar to that I read in various media reports even less than a week later.

It was related to a somewhat trepidatious national policy in the making on Intellectual Property Rights (IPR) in India.

One major apprehension, besides a few others on this IPR Policy, was flying all over and nettling many. It was regarding the possibility of tweaking or dilution of the Indian Patents Act by the Government, coming under strong external pressure and also to get support on India’s food security in the World Trade Organization (WTO).

Probably to douse this simmering fire of trepidation, well calibrated, unambiguous and reassuring narratives on the subject were unfolded recently by the Government, that too in a quick succession, which were somewhat as under.

On July 20, 2015, at an event organized by the Federation of Indian Chambers of Commerce and Industry (FICCI), the Commerce and Industry Minister Nirmala Sitharaman reiterated that:

India’s IPR laws are quite in compliant with the TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement.

There is no need for apprehension in any corner of the world as to what India’s patent regime is like.

The Minister also indicated at the same event that following a transparent process of drafting…and redrafting; the final blue print of the IPR policy has now been circulated to all concerned ministries for inter-ministerial consultations. After completion of that process soon, her Ministry would submit the final version to the Cabinet for approval.

It is now anticipated that by the end of this year the first ‘IPR Policy’ of India would be operational.

The creeping angst for a possible twitching in the country’s otherwise robust Patents Act, was mostly originated from a pointed recent utterance of Prime Minister Modi on this issue that we shall quickly explore in this article.

Another stronger assertion:

Immediately thereafter, while commenting on a related article published in an Indian business daily dated July 24, 2015, Minister Nirmala Sitharaman reasserted the following points even more emphatically and virtually in so many words:

India’s IPR laws are fully compliant with international obligations under the TRIPS agreement. This includes the Patents Act, 2005, whose provisions have time and again stood the test of judicial scrutiny.

There is no question of permitting ‘evergreening’ of patents, or of realigning our IPR laws to comply with US laws.

There is no question of sacrificing our IPR laws to get support from a particular country even on food security.

A brief background:

In October 2014, almost immediately after Prime Minister Modi’s return to India from the United States, the the Department of Industrial Policy and Promotion (DIPP) formed a six-member ‘Think Tank’, chaired by Justice (Retd.) Prabha Sridevan, to draft the ‘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.

Taking quick strides, on December 19, 2014, the Think Tank’ released its first draft of 29 pages seeking stakeholders’ comments. According to Minister Nirmala Sitharaman, “Different people, countries, including the United States and other organizations have already given their inputs on the draft policy.”

The new policy would focus on stronger enforcement of IPR by increasing the manpower in IP offices and reducing pendency of IPR filings. It aims at bringing clarity to the existing laws and making changes wherever required to safeguard the interests of Indian industry and patent holders worldwide.

I reviewed this subject in my blog post of January 19, 2015 titled, New “National IPR Policy” of India – A Pharma Perspective.

Most recent apprehension:

The most recent spark for the speculation of a possible dilution in the Indian Patents Act 2005, came from the April 24, 20015 media report that quoted Prime Minister Modi expressing his intent on the issue, seemingly going overboard, as follows:

“India’s patent laws should be brought on par with global standards to make Asia’s third largest economy a hub for outsourced creative services.”

The basic purpose of making such an apparently ambiguous statement may be construed as an attempt to attract more Foreign Direct Investments (FDI) for the country.

Whatever it may be, this announcement of the Prime Minister sent a strong signal to many as an impending major shift in his Government’s thinking to move away from an otherwise robust and a decade old IPR regime in India, undoubtedly under intense external pressure.

The above pronouncement from an otherwise tough minded Prime Minister came as a bolt from the blue, as it were, to many stakeholders. This is mainly because; India has so far been maintaining in all forum that its IPR regime is fully TRIPS compliant and garnered enough international support from the experts in this area, including Nobel Laureates.

The Prime Minister made his intent even stronger, when he further elaborated his argument as under:

“If we don’t work towards bringing our intellectual property rights at par with global parameters, then the world will not keep relations with us. If we give confidence to the world on IPR, then we can become a destination globally for their creative work.”

Some American Government agencies reportedly lapped up Prime Minister Modi’s statement as they openly commented as follows:

“The United States also welcomes April 2015 statements made by Prime Minister Modi recommending that India align its patent laws with international standards and encourages India expeditiously undertake this initiative”

Intriguing comment:

Prime Minister Modi’s comment in this regard that “India needs to bring its patent laws on par with global standards,” comes of rather intriguing to many domain experts, as TRIPS agreement is the only universally accepted ‘Global Standard’ for IPR. Even the new Government has reiterated that Indian patent regime is fully TRIPS compliant.

India welcomes and encourages innovation:

With the enactment of Patents Act 2005, India has demonstrated that Intellectual Property Rights (IPR) and pharma patents in particular, help fostering innovation and is critical in meeting unmet needs of the patients.

However, the moot question still remains, what type pharmaceutical invention, should deserve market exclusivity or monopoly with overall freedom in pricing, keeping larger public health interest in mind.

There are still some loose knots in the process of speedy resolution of all IP related disputes and creation of a desirable ecosystem for innovation in the country, that the new IPR Policy is expected to effectively address, soon.

Two fundamental changes that the US is looking for:

Leaving aside the peripheral ones, the following two are the center pieces where the United States would want India to dilute its Patents Act 2005 considerably:

Patentability for all types of innovation, including ‘me-too’ ones and evergreening of patents, which would delay entry of affordable generic drugs.

“Compulsory Licensing (CL)” provisions, other than during natural calamities.

The status today:

Though the Prime Minister has not further spoken on this subject publicly, from the recent statements of the Union Minster of Commerce and Industry it seems rather clear that for greater public health interest, India has decided to keep its Patents Act undiluted, at least, for now.

The Union Government has distinctly explained its stand in the following two areas:

I. No…No, to ‘Evergreening’ of patents in India:

In line with this thinking, for quite sometime a raging global debate has brought to the fore that there are quite a large number of patents on drug variants that offer not very significant value to the patients over the mother molecules, yet are as expensive, if not more than the original ones.

In common parlance these types of inventions are considered as ‘trivial incremental innovations’ and described as attempts to ‘evergreening’ the patents.

A paper titled, “Pharmaceutical Innovation, Incremental Patenting and Compulsory Licensing” by Carlos M. Correa argued as follows:

“Despite decline in the discovery of New Chemical Entities (NCEs) for pharmaceutical use, there has been significant proliferation of patents on products and processes that cover minor, incremental innovations.”

The study conducted in five developing countries – Argentina, Brazil, Colombia, India and South Africa has:

Evidenced a significant proliferation of ‘evergreening’ pharmaceutical patents that can block generic competition and thereby limit patients’ access to medicines.

Found that both the nature of pharmaceutical learning and innovation and the interest of public health are best served in a framework where rigorous standards of inventive steps are used to grant patents.

Suggested that with the application of well-defined patentability standards, governments could avoid spending the political capital necessary to grant and sustain compulsory licenses/government use.

Commented, if patent applications were correctly scrutinized, there would be no need to have recourse to CL measures.

Indian Patents Act under its section 3(d), discourages the above practices for public health interest. This particular provision, though absolutely TRIPS compliant is not followed in the developed markets, predominantly for commercial reasons. Hence the mounting pressure is on India for its major dilution.

II. Compulsory License (CL) provisions would stay to prevent misuse and abuse:

This is another major safeguard provision for the patients against abuse and misuse of patents, including obscene price tags of patented drugs, non-working of patents as a commercial strategy, limited availability, besides extreme urgency and some other situations. Though TRIPS very clearly allows all such provisions, India has so far granted just one CL.

With these India has amply demonstrated that CL provisions are important safeguards for the country and not for abuse or misuse by any one, including the Government. Moreover, it has to pass the acid test of rigorous judicial scrutiny that includes the Supreme Court of India.

Despite all these, more scares are being created around CL provisions in India than what is the reality in the country.

Various safeguards and deterrents against misuse and abuse of patents are absolutely essential for public health interest. Hence there is naturally no question of going back from such provisions in the statute.

It is worth noting, if Indian Patent regime is not TRIPS compliant, why hasn’t any country complained against India to the World Trade Organization (WTO) for having all these provisions in the Indian Patents Act, as yet?

India shows the new IPR way:

According to available reports, the following countries are coming closer to the Indian pharma patent regime:

Argentina has issued guidelines to reject ‘frivolous’ patents
Peru, Columbia and some other South American countries have placed curbs
Philippines has similar provisions
South Africa is contemplating to incorporate such steps
Australia is deliberating on making the law tougher

Positive reverberations in the domestic pharma sector:

Home grown pharma players seem to be visibly happy too, as the overall stand of the Government in this regards is getting clearer.

This in many ways gets vindicated, when a promoter, chairperson and managing director of a mid-size Indian Pharma and Biotech company, with high media visibility, reportedly comments on the finalization of Indian IPR Policy as follows:

“There is a need to protect interest and disallow monopolies like big pharma or big companies/corporates that want to invest and take advantage of the Indian market.”

Concerns of some ‘Who’s Who’:

The following is just an example of such concern:

On February 10, 2015, the Nobel Laureate in Economics – Joseph E. Stiglitz, made the following comment in an article published in ‘The World Opinion Page’ of ‘Project Syndicate’:

“If the Obama administration succeeds in forcing India to strengthen its patent laws, the change would harm not only India and other developing countries; it would also enshrine a grossly corrupt and inefficient patent system in the US, in which companies increase their profits by driving out the competition – both at home and abroad. After all, generic drugs from India often provide the lowest-cost option in the US market once patent terms have expired.”

As things stand today, it would not be unreasonable to conclude that the Nobel Laureate Joseph E. Stiglitz’s worst apprehension on the Indian Patent regime, in all probability would not come true.

Conclusion:

For quite some time, Indian Government has been under intense nagging from the United States, other developed countries, many drug MNCs and the pharma lobby groups lavishly funded by them; to effect major changes in the Patents Act of the country that currently denies unreasonable commercial exploitations, in many ways. Section 3(d) of the statute is just one of the key examples.

The browbeaters of such ilk keep pontificating the importance of ‘innovation’ and that too with a condescending undertone, as if the Indian Government is blissfully ignorant about it.

They allegedly want the Government to dilute the robust safeguard provisions of Indian Patents Act, trying to unfairly tilt the balance of justice in their favor. Consequently, it would go against the patients’ health interest by considerably delaying entry of cheaper generic equivalents, of ‘me-too’ type of inventions, in the country.

Despite initial apprehensions based on the possible misconstrued observation of the Prime Minister Modi on this issue, clear and unambiguous recent assertions of the Government on the patent regime of India, especially in the ‘count-down’ days of the new IPR Policy announcements, is reassuring. It goes without saying, this cannot happen without the benediction of India’s all-powerful Prime minister.

As stated in the draft document, let us hope that the new IPR Policy would help establishing a dynamic, vibrant and balanced intellectual property system in India, to foster innovation and creativity in a knowledge economy and accelerate economic growth, employment and entrepreneurship.

Under this backdrop, it now emerges almost indubitably that Indian Patents Act 2005 would continue to prevail undiluted much to the dismay of its fiercest critics…Finally?

By: Tapan J. Ray

TPP: Discord Within A Strange Mélange And Impact On Access To Medicines

Posted on May 25, 2015 by Tapan Ray

On May 19, 2015, Bloomberg reported that a sizable number of President Barack Obama’s own party colleagues, besides teachers, seniors, Internet freedom groups and nuns, have joined the push to defeat the proposed Trans-Pacific Partnership (TPP) treaty.

Before I delve into the TPP, solely from the Indian pharmaceutical industry perspective, it is worth acknowledging upfront India’s firm assertion, repeatedly, to continue with its well-thought out and robust Patents Act 2005.

Even the final draft of the National IPR policy, which is now being circulated for inter-ministerial consultations and will soon be taken up by the Cabinet, reasserted that the country’s IPR policy is fully compliant with the Trade Related aspects of IPR (TRIPS) agreement of the World Trade Organization (WTO).

In this process, global demonstration of India’s firm resolve against dilution of the country’s Intellectual Property (IP) regime, coming under any form of intense external pressure, seems to have become a model to follow for the emerging economies of the world, in general.

This trend now gets reflected from some constituents even within the United States, besides several members of the 12-nation TPP, which is a proposed regional regulatory and investment treaty, aimed at strengthening relationship on economic policies and regulatory issues between the member nations.

Publicly articulated key objectives of the pact are to significantly reduce tariffs between the member nations and open up trade, boosting investment flows between its signatories, to accelerate economic growth.

The member countries of TPP have also agreed to work together on issues such as customs procedures, labor practices, intellectual property and competition policies.

Through its comprehensive coverage of issues and binding regulations, TPP is expected to set new benchmark for international trade. It is expected to eventually mature into a regional trade agreement covering the entire Asia-Pacific region.

Uneasy secrecy:

However, the uneasy secrecy surrounding the negotiations of the agreement makes its critics seriously apprehensive about its impact on the developing nations of the world. This is because; the concerned delegates of the negotiating team always remain tight lipped about the progress made in coming to an agreement on the scope of the pact. This information is critical for assessment of direct and indirect global impact of TPP on the trade, economy and society, in general.

According to reports, TPP members, such as, Brunei, Malaysia, Singapore and Vietnam are negotiating hard to get incorporated somewhat similar to Indian IP rules in the TPP agreement.

Besides the above countries, other members of TPP are United States, Australia, Japan, New Zealand, Canada, Chile, Mexico and Peru.

Large Asian economies are not a part:

Interestingly, large Asian economies, especially, four important members of the G20, namely, China, India, South Korea and Indonesia, are not a part of the TPP, just yet.

It is worth noting, TPP is being led by the world’s largest economy and the biggest trading nation – the United States, the country that sees Asia-Pacific as key to its future growth.

Noting all these, many experts in this field, across the world, have already raised a flag saying that the US may be trying to use TPP as a means to undermine China’s growing economic might in the region.

Many gaps still to bridge:

The real negotiations for this treaty started only in 2010 and are still continuing. However, the details of negotiations is so much shrouded under water tight secrecy, even to the lawmakers of the United States, it is indeed challenging for anyone to predict the timeframe of its coming to fruition.

Reuters reported on May 21, 2015, “Chief negotiators from the 12 TPP countries are trying to bridge gaps for a deal at a meeting in Guam that will run through to May 28, 2015. But ministers would need to meet to clinch an accord,”

In this article, I shall only focus on the possible impact of this pact on the access to medicines, especially in the developing world.

Leaked drafts of TPP negotiations:

As the progress of negotiations of this pact continue to remain under uneasy secrecy, on November 13, 2013, WikiLeaks released the secretly negotiated draft text for the entire IPR Chapter of the TPP.

30,000-word IP chapter of the leaked documents, besides others, reportedly contains proposals to increase the term of drug patents beyond 20 years, and lower global standards for patentability.

TPP and patents:

When it comes to the issue of access to affordable medicines for a vast majority of the global population, the overall patent ecosystem of a nation and how evergreening of patents with monopolistic high pricing are addressed, automatically enter into the broader framework of intense public and stakeholders’ discourse.

Article 8.1 of the draft agreement sets-forth the availability of patents, and provides that “patents shall be available for any new forms, uses, or methods of using a known product; and these may satisfy the criteria for patentability, even if such invention does not result in the enhancement of the known efficacy of the product.”

Interestingly, TRIPS agreement, on the other hand, specifies that patents are available “provided that the invention is new, involves an inventive step and is capable of industrial application.”

In that sense, the above provision in the Article. 8.1 is quite inconsistent with the patent laws of many TPP member countries, and especially India.

Consequently, experts have raised serious concerns about the impact of TPP on the IP laws of a country, in general, as it may extend the scope of drug patents, preventing free distribution of cheaper generic drugs to the needy patients.

Impact on access to medicines:

As stated earlier, there have been serious apprehensions that TPP would adversely impact the access to medicines.

According to widely reported leaked drafts of TPP negotiations, the US is demanding aggressive IP provisions in the agreement. It is believed, if accepted, these would directly undermine public health safeguards available in international law, making it harder for TPP member countries to gain access to cheaper generic drugs.

Many experts in this field reportedly construe, these stringent IP provisions that the US is demanding may be categorized as ‘TRIPS-plus’ and have the following serious impact adversely impacting access to medicines :

Make it impossible to challenge the validity of a patent before it is granted

Lower the requirements for patentability, so that minor alterations of existing medicines can be  given additional protected monopoly status, even if the alteration offers no therapeutic benefit

Require the patenting of diagnostic, therapeutic and surgical methods

Lengthen patent monopolies for pharmaceutical firms so that they keep generics out and inflate drug prices for longer periods of time

Make it harder for generic manufacturers to obtain regulatory approval for their drugs

Create additional monopolies based on clinical data

Impose new forms of IP enforcement that give customs officials excessive powers to impound legitimate generic medicines

Impose higher prices on national pharmaceutical reimbursement programs

Allow pharmaceutical companies to sue governments and limit governments’ abilities to effectively set prices for medicines and legislate in the interest of public health.

Discord within key TPP member countries:

Though Australia is one of the key signatories of TPP, in February 2015, the Medical Journal of Australia also commented that the leaked draft of the agreement includes patenting standards that would delay cheaper drugs.

Quoting the Medical Journal of Australia, ‘The Guardian’ too reiterated: “The most recently leaked draft of the international trade deal includes provisions proposed by the US that would further protect the monopoly pharmaceutical companies hold over drugs, and delay cheaper versions from entering the market. The draft agreement sets in stone low patenting standards, which allow drug companies to practice ‘evergreening’ – when a pharmaceutical company tries to maintain its market monopoly on a drug for longer by applying for extra patents. This prevents other companies entering the market with cheaper versions of the same medicine and imposes large and unnecessary costs on the health system and consumers.”

Similarly, across Canada, people are speaking out about the TPP. They are rallying against the secrecy of the 12-country negotiations and the corporate agenda behind the deal.

On February 12, 2015 legislators in seven of the 12 TPP countries issued the following joint statement about the negotiations:

“We, the undersigned legislators from countries involved in the negotiation of the Trans-Pacific Partnership Agreement, call on the Parties to the negotiation to publish the draft text of the Agreement before any final agreement is signed with sufficient time to enable effective legislative scrutiny and public debate.”

In Canada, the federal NDP and the Green Party of Canada endorsed the above statement. It is the simplest of demands for democracy on a “trade” deal that threatens to undermine the very notion of the public good, by giving corporations more power to undermine public policy.

As stated above, Brunei, Malaysia, Singapore and Vietnam are also negotiating hard to get incorporated somewhat similar to Indian IP rules in the TPP agreement.

Though not in the areas of access to medicines, Japan too expressed its concerns on TPP impacting its agriculture sector. Protests are forthcoming in the copyrights area, as well.

Apprehensions catching-up in the US too:

May 19, 2015 Bloomberg report also indicates, specifically from the pharmaceutical industry perspective, some key stakeholders are worried about the effects of more open markets on drug pricing that could increase their costs and “Foreign corporations or subsidiaries will be able to challenge a number of public health programs.”

In a letter of May 12, 2015 to the House and Senate, the Alliance for Retired Americans has reportedly underscored the possibility of this grave danger to them, if TPP comes into effect.

On May 21, 2015, Reuters reported, just 13 out of 44 Democrats (of President Obama’s own Party) backed the legislation in the Senate’s second procedural vote on last Thursday.

Earlier, a group of over 30 legal academics reportedly sent a letter to the US Trade Representative, expressing “profound concern and disappointment at the lack of public participation, transparency and open government processes in the negotiation of the intellectual property chapter of the TPP”.

Other important areas of criticism:

Other key areas of criticism of TPP are as follows:

Excessive emphasis on trade issues that have remained unresolved or unaddressed at the WTO due to differences between developed and emerging markets.

Adopting a negotiating style reflecting the US regulatory approach to international trade

Allowing companies to sue foreign governments, which would allow them to dodge health and environmental standards.

Giving shape to a geo-political road map of the US that supports its strategic rebalancing towards Asia.

A strange mélange:

An article published in the April 9, 2015 edition of Forbes, titled “TPP Is A Mistake”, very appropriately describes TPP as a strange mélange of 12 members countries that includes five from the Americas (Canada, Chile, Mexico, Peru and the US), five from Asia (Brunei, Japan, Malaysia, Singapore and Vietnam), along with Australia and New Zealand.

In terms of populations, the total American contingent which stands at 535 million, more than half the total population of the Americas (947 million), is significantly larger than the Asian population figures which amount to no more than 256.6 million (285 if one adds Australia and New Zealand), compared to Asia’s total population of 4.3 billion: almost half of the Asian contingent is accounted for by one member – Japan, the articles states.

In this article, former Malaysian Prime Minister Tun Dr Mahathir Mohamad, the architect of Malaysia’s impressive economic growth and development during his tenure from 1981 to 2003, was quoted saying:

“The strongest campaigner of TPP is America … which seeks … to contain China and to safeguard its own economic interests by exploiting all resources from small but growing independent nations such as Malaysia”.

He further adds, “TPP is not a fair or free trade partnership, but an agreement to tie down nations with rules and regulations that would only benefit American conglomerates”.

Is TPP more than just a trade agreement?

Many experts feel, that TPP is basically a geopolitical tool to contain China with ‘trade’ as its façade.

The votaries of TPP argue that it aims to achieve a very high standard trade agreement and thus the reason of keeping China out of it is not geopolitical. Other Asian nations, including China, can apply and qualify for membership once they commit to meeting these high standards, they reiterate.

The above argument does not seem to be a robust one, as that would mean, a sizable proportion of its smaller current members, such as, Vietnam, already conform to so called ‘high standards’, as required for the TPP agreement.

Besides geopolitical issue, many are also questioning whether TPP is what the developing countries need, especially, at this stage of their development.

Conclusion:

One may quite pertinently ask, in what way TPP is relevant to India?

TPP is relevant to India in the sense that it is expected to eventually mature into a regional trade agreement covering the entire Asia-Pacific region.

Be that as it may, if I restrict myself only to the drug patent related area of the proposed pact, it appears, unless the damaging provisions in the concerned chapters are removed through negotiations before the agreement is finalized, the TPP would possibly turn out to be the most harmful trade pact ever, especially from the perspective of access to medicines in the developing countries of the worlds.

May 2015 issue of ‘amfAR’ – The Foundation for AIDS Research based in Washington DC of the United States captured the essence of possible healthcare related issues with TPP – the pact of a strange mélange of 12 member countries, with the following words:

“By providing avenues for pharmaceutical companies to extend IP protection beyond what is required by current international standards, the TPP could greatly delay the entrance of generic competition for much-needed medicines and keep prices high. Doing so would continue an unacceptable and dangerous trend of irrevocable expansion of IP protections at the expense of access to medicines and would serve as a justification for even more aggressive measures in future FTAs.”

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.

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

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.

‘Data Protection’: Needs A Clear Direction…But Is It An IPR Issue?

Posted on March 2, 2015 by Tapan Ray

The terminologies ‘Data Exclusivity’ and ‘Data Protection’ are quite often used interchangeably by many, creating a great deal of confusion on the subject. However, in a true sense these are quite different issues having critical impact on public health interest of a nation.

In several media reports as well, one can notice the interchangeable use of these two terms. It is especially happening when the reports are speculating whether or not the Government of India is considering putting in place ‘Data Exclusivity’/ ‘Data Protection’ along with ‘Patent Linkage’ through administrative measures, without making any amendments in the Patents Act 2005 of the country.

Tracking this development, the last week, I wrote about ‘Patent Linkage’. In this article, I shall dwell on the same area, but from ‘Data Exclusivity’/ ‘Data Protection’ perspective.

A brief overview:

Close to a decade ago, Government of India constituted ‘Satwant Reddy Committee’ to recommend a direction that India should follow on ‘Data Protection’ in the country involving pharmaceutical and agricultural products.

In 2007 the Committee submitted its report recommending ‘Data Protection’ in the country to be introduced for pharma products in a calibrated manner. However, the report did not specify a timeline for its implementation.

Interestingly, even this committee did not differentiate between the terminologies ‘Data Protection’ and ‘Data Exclusivity, as we now see in the first draft of the ‘National IPR Policy.’

According to available reports, after due deliberation, the erstwhile Government decided not to take any action on the committee’s recommendations for ‘Data Protection’ in India.

Difference between ‘Data Protection’ and ‘Data Exclusivity’:

In an article published in ipHandbook, titled “Data Protection and Data Exclusivity in Pharmaceuticals and Agrochemicals”, the author Charles Clift with a great deal of experience in the U.K. Department of International Development (DFID) and a former Secretary, Commission on Intellectual Property Rights, Innovation and Public Health, World Health Organization; differentiated these two terminologies as follows:

Data Protection (DP): Protection of commercially valuable data held by the drug regulator against disclosure and unfair commercial use.

Data Exclusivity (DE): A time bound form of Intellectual Property (IP) protection that seeks to allow companies recouping the cost of investment in producing data required by the regulatory authority.

Arguments in favor of ‘Data Exclusivity’:

International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), Geneva, in its website argues in favor of ‘Data Exclusivity’ as follows:

- Health authorities require, as part of a submission for a marketing authorization, that proprietary information be disclosed in order to ensure public health and patient safety.

- The innovator assumes the entire risk for the generation of the data, what requires expensive and lengthy clinical trials.

- ‘Data Exclusivity’ is necessary to provide a measure of certainty to the innovator that they will be provided with a period of protection for their efforts of testing a drug.

- Patents and ‘Data Exclusivity’ are different concepts, protect different subject matter, arise from different efforts, and have different legal effects over different time periods

Arguments suspecting the intent of ‘Data Exclusivity’:

The above paper of Charles Clift highlights the following on DE:

- The effect of DE is to prevent entry of generic competitors, independent of the patent status of the product in question.

- DE law, wherever applicable, prevents generic manufacturers from using innovators’ test data, though it would allow the drug regulator to analyze this data prior to market approval.

- Even if the patent period has expired or there is no patent on a product, DE will act independently to delay the generic entry until the period of DE is over.

- In that way DE compensates innovators for delayed market entry and concomitant loss of potential profits.

- DE is a much stronger right than a patent, mainly because, unlike patent law, there is no exceptions or flexibilities that allow the governments to provide the equivalent of Compulsory License (CL).

- DE acts as a barrier to CL of a patent on the same product by preventing marketing approval for a CL.

TRIPS Agreement talks about DP, but not DE:

Article 39 of TRIPS Agreement on “Protection of Undisclosed Information” contains a general clause on the obligations of the members of the WTO, where Article 39.3 specifies three obligations for its member countries as follows:

- To protect data on New Chemical Entities (NCE), the collection of which involves considerable effort, against unfair commercial use.

- To protect these data against disclosure, except where necessary to protect the public

- To protect such data against disclosure, unless steps are taken to ensure that the data are protected against unfair commercial use

According to Charles Clift, Article 39.3 only articulates widely accepted trade secret and unfair competition law, and is not an invitation to create new IP rights per se for test data. Nor does it prevent outside parties from relying on the test data submitted by an originator, except in case of unfair commercial practices.

Some developed countries, such as the United States and the European Union have argued that Article 39.3 of TRIPS requires countries to create a regime of DE, which is a new form of time-limited IP protection. However, it is worth noting that in both these countries DE regime was adopted prior to TRIPS Agreement. Hence, many experts construe such approaches and pressure, thus created for DE, as ‘TRIPS Plus’.

What is ‘TRIPS Plus’?

The ‘TRIPS-Plus’ concept would usually encompass all those activities, which are aimed at increasing the level of IP protection for the right holders, much beyond what is required for conformance of TRIPS Agreement by the World Trade Organization (WTO).

Some section of the civil society nurtures a view that ‘TRIPS Plus’ provisions could significantly jeopardize the ability, especially, of developing countries to protect the public health interest adequately.

Some common examples of ‘TRIPS Plus’ provisions:

Common examples of ‘TRIPS Plus’ provisions could include:

- Extension of the patent term beyond usual twenty-year period

- Introduction of provisions, which could restrict the use of CL

- Delaying the entry of generics

Is ‘Data Protection’ an IPR issue?

In my view, the issue of ‘Data Protection’ is more a drug regulatory than an IPR related subject and should be treated as such. This is because ‘Data Protection’ is more related to the ‘Drugs and Cosmetics Act’ of India rather than the ‘Patents Act 2005′.

Thus, it is quite intriguing to make out why ‘Data Protection’, which will be governed by ‘Drugs and Cosmetics Act’, is featuring in the IPR Policy of the country.

I wrote on the draft National IPR Policy in my blog post of January 19, 2015, titled “New “National IPR Policy” of India – A Pharma Perspective”.

Conclusion:

After jettisoning the ‘Satwant Committee Report’ on ‘Data Protection’, the Government was in no mood, until recently, to discuss anything about DP and DE, despite intense pressure from the pharma MNC lobby in India. However, the issue first resurfaced during EU-FTA negotiation, when India rejected these provisions outright and unambiguously.

However, the ghost started haunting India, yet again, when the US Government started flexing its muscle on this issue, at the behest of the American pharma companies.

Although DP is a drug regulatory issue, curiously, it features in the draft National IPR Policy. Even there, the subject has taken an interesting turn, when in the first draft of ‘National IPR Policy’ of India, the six-member ‘Think Tank’ chaired by Justice (Retd.) Prabha Sridevan clearly recommended “Protection of undisclosed information not extending to data exclusivity.”

In my opinion this is indeed a very pragmatic recommendation. It deserves support from all concerned so that the profound intent continues to feature in the final IPR Policy of India, to protect public health interest of the nation.

Just like ‘Patent Linkage’, as I discussed in my last week’s article, finding a middle ground to put ‘Data Protection’ in place through administrative measures, without making any amendments either in the Drugs & Cosmetics Act or in the Patents Act of the country, seems to be desirable and very much possible, as well.

However, the very thought of considering ‘Data Exclusivity’ in India, in my view, should prompt a clear ‘No…No’ response from the present Government of India.

This is mainly because, besides all other reasons as mentioned above, even if the patent period for a molecule has expired or there is no patent on a product, DE will act independently to delay the generic entry until the period of ‘Data Exclusivity’ gets over.

By: Tapan J. Ray

Reverberations Around The Proposed New IPR Policy Of India

Posted on February 16, 2015 by Tapan Ray

The above sharp, piercing and precise comment did not come from any health activist from India or elsewhere. It came from a team of highly credible academic experts working in the United States.

On February 10, 2015, Nobel Laureate in Economics – Joseph E. Stiglitz, who is also University Professor at Columbia University, former Chairman of President Bill Clinton’s Council of Economic Advisers and Chief Economist of the World Bank, made this comment in an article published in ‘The World Opinion Page’ of ‘Project Syndicate’.

The article is co-authored by Dean Baker, Co-Director of the Center for Economic and Policy Research in Washington DC and Arjun Jayadev, Professor of Economics at the University of Massachusetts, Boston.

The authors arrived at the above conclusion based on some sound arguments. I am highlighting below some of those important ones (may not be in the same order):

A patent that raises the price of a drug a hundred-fold has the same effect on the market as a 10,000 percent tariff.

India’s Patents and Act and policies allow drugs to be sold at a small fraction of the monopoly prices commanded by patent holders. For example, the Hepatitis-C drug Sovaldi is sold for US$84,000 per treatment in the US; Indian manufacturers are able to sell the generic version profitably for less than US$1,000 per treatment.

The threat of competition from Indian generics is partly responsible for major pharmaceutical companies’ decision to make some of their drugs available to the world’s poor at low prices. If the US compels India to tighten its patent rules substantially, so that they resemble US rules more closely, this outcome could be jeopardized.

Multilateral approach, using the World Trade Organization (WTO), has proved less effective than the major multinational pharmaceutical companies hoped, so now they are attempting to achieve this goal through bilateral and regional agreements.

In the view of America’s pharmaceutical industry, TRIPS did not go far enough. The Indian government’s desire to enhance its trade relations with the US thus provides the industry an ideal opportunity to pick up where TRIPS left off, by compelling India to make patents easier to obtain and to reduce the availability of low-cost generics.

In September 2014, during his visit to the US, Indian Prime Minister Narendra Modi agreed to establish a working group to reevaluate the country’s patent policy. The US participants in that group will be led by the Office of the US Trade Representative, which serves the pharmaceutical companies’ interests, rather than, say, the National Academy of Sciences, the National Science Foundation, or the National Institutes of Health.

Any comparable voice in favor of changes in Indian Patents Act?

I don’t seem to have heard or read as strong arguments from as credible sources as Nobel Laureate Joseph E. Stiglitz, Dean Baker and Arjun Jayadev – the authors of the above article, in favor of the changes that American pharma companies want in the Indian Patents Act.

India at the center stage in IPR debate:

In the IPR debate, India is continuously being seen at the center stage for various reasons. The key one being the size, scale and economic efficiency that the home grown Indian pharma players have attained to cater to the needs of a large number of global population, including those residing in the United States and Europe, with a wide range of high quality generic drugs at affordable prices.

Fast evolving scenario:

It is now absolutely clear that being rattled by several refusals of India’s granting product patent to very similar molecules with minor tweaking under section (3d) of the country’s Patents Act, together with the nation’s uprightness in issuing Compulsory License (CL) for an enormously expensive cancer drug reducing its price by over 95 percent, United States now intends to directly intervene into India’s IPR policy environment.

As Nobel Laureate Stiglitz wrote, keen desire of the new dispensation of the Indian government to enhance its trade relations with the US has provided a golden opportunity to American pharma companies and their paid lobbyists to jump into the fray. They have started exerting enormous pressure on their own Government to compel India, at bilateral discussions, dilute its well-balanced Patents Act, ignoring India’s sovereign right to play by the flexibilities as provided by the WTO to protect public health interest in the country.

Both the domestic and international civil society organizations, including public health activists have expressed their serious concerns on this aggressive intent of US and India’s seemingly vulnerable position in this regard.

“The US is pushing India to play by its rules on Intellectual Property, which we know will lead to medicines being priced out of reach for millions of people,” commented the Executive Director of MSF’s Access Campaign, according to media reports.

Non-pharma American Organizations reacted differently:

14 American organizations in a letter to their President Barack Obama dated January 20, 2015, just prior to his visit to India, asked him “to support India’s central role in providing high-quality, low-cost generic medicines -which are essential for health care around the world. Recent U.S. policy stances have sought to topple parts of India’s intellectual property regime that protect public health in order to advance the interests of multinational pharmaceutical corporations in longer, stronger, and broader exclusive patent and related monopoly rights. India’s laws fully comply with the WTO TRIPS Agreement. Millions around the world depend on affordable generic medicines that would disappear if India acceded to these proposals, including many beneficiaries of US-funded programs. Instead of using your trip to promote the narrow interests of one segment of the pharmaceutical industry, we ask you to support the interests of people who need affordable medicines, whether they live in the U.S., in India, in Africa or elsewhere. Our world is safer and healthier because of India’s pro-health stance and we ask you to say so publicly while you are there.”

The letter re-emphasized at the end:

“From Detroit to New Delhi, health is increasingly interconnected. Our world is safer when it is healthier, and it is healthier because India’s laws appropriately balance health and IP.”

An interesting development:

It is interesting to note that after Winter Session of the Indian Parliament, the Modi Government announced a number of important policy changes at the end of December 2014.

Interestingly, one more critical policy – National Intellectual Property Rights (IPR) Policy has been left open for public comments and the final IPR Policy is yet to be announced despite enormous American pressure on India in this regard.

Without any specifics, the first draft of the National IPR policy just states that India will “review and update IP laws, where necessary, and remove anomalies and inconsistencies, if any.” It does emphasize though, the need of “more innovation” in the country, unequivocally and quite justifiably.

I wrote on the draft National IPR Policy in my blog post of January 19, 2015, titled “New “National IPR Policy” of India – A Pharma Perspective”.

Conclusion:

It is generally believed that the National Intellectual Property Rights (IPR) Policy is undoubtedly a positive step to clarify the Government’s stand in maintaining a balanced IP regime in the country that would encourage innovation to add speed to the progress of the nation.

In just 10 years Indian IPR regime has, by and large, attracted enormous global attention mostly for balancing IP and public health interest, admirably. Experts like Nobel laureate Joseph E. Stiglitz sincerely hope that India will not change this course under pressure of any kind or form.

Be that as it may, several recent media reports also speculated, around the same time, that Government of India is probably considering putting in place ‘Data Exclusivity’ and ‘Patent Linkage’ through administrative measures, without making any amendments in the Patents Act of the country.

In my subsequent articles in this blog, I shall deliberate on these two contentious issues, keeping the evolving scenario in perspective.

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.

Unilateral American Action on Agreed Bilateral Issues: Would India Remain Unfazed?

Posted on October 20, 2014 by Tapan Ray

I discussed in one of my earlier blog posts titled “Has Prime Minister Modi Conceded Ground To America On Patents Over Patients?” of October 6, 2014 that on April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘priority watch list country’.

Special 301 Report and OCR – A brief Background:

According to the Office of USTR, Section 182 of the US Trade Act requires USTR to identify countries that deny adequate and effective protection of IPR or deny fair and equitable market access to US persons who rely on Intellectual Property (IP) protection. The provisions of Section 182 are commonly referred to as the “Special 301” provisions of the US Trade Act.

Those countries that have the ‘most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on relevant US products’ are to be identified as Priority Foreign Countries. In addition, USTR has created a “Priority Watch List” and a “Watch List” under Special 301 provisions. Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IP.

In the 2014 Special 301 Report, USTR placed India on the Priority Watch List and noted that it would conduct an Out of Cycle Review (OCR) of India focusing in particular on assessing progress made in establishing and building effective, meaningful, and constructive engagement with the Government of India on IPR issues of concern.

An OCR is a tool that USTR uses on IPR issues of concern and for heightened engagement with a trading partner to address and remedy such issues.

For the purpose of the OCR of India, USTR had requested written submissions from the public concerning information, views, acts, policies, or practices relevant to evaluating the Government of India’s engagement on IPR issues of concern, in particular those identified in the 2014 Special 301 Report.

The Deadlines for written submissions were as follows:

Friday, October 31, 2014 - Deadline for the public, except foreign governments, to submit written comments.

Friday, November 7, 2014 - Deadline for foreign governments to submit written comments.

India’s earlier response to 2014 Special 301 Report:

On this report, India had responded earlier by saying that the ‘Special 301’ process is nothing but unilateral measures taken by the US to create pressure on countries to increase IPR protection beyond the TRIPS agreement. The Government of India has always maintained that its IPR regime is fully compliant with all international laws.

The issue was raised during PM’s US visit:

According to media reports, Prime Minister Narendra Modi, during his visit to America last month, had faced power packed protests against the drug patent regime in India from both the US drug industry and also the federal government.

The Indo-US joint statement addresses remedial measures:

In view of this concern, Indo-US high-level working group on IP was constituted as a part of the Trade Policy Forum (TPF), which is the principal trade dialogue body between the two countries. TPF has five focus groups: Agriculture, Investment, Innovation and Creativity, Services, and Tariff and Non-Tariff Barriers.

The recent joint statement issued after the talks between Prime Minister Narendra Modi and US President Barack Obama captures the essence of it as follows:

“Agreeing on the need to foster innovation in a manner that promotes economic growth and job creation, the leaders committed to establish an annual high-level Intellectual Property (IP) Working Group with appropriate decision-making and technical-level meetings as part of the TPF.”

Unilateral measures resurface within days after PM’s return from the US:

Almost immediately after Prime Minister Narendra Modi’s return from the US, USTR ‘s fresh offensive with OCR against India’s IP regime, could have an adverse impact on the proposed bilateral dialogue with Washington on this issue.

However, dismissing this unilateral action of America, the Union Commerce Ministry, has reiterated the country’s stand, yet again, as follows:

“As far as we are concerned, all our laws and rules are compliant with our commitments at WTO. A country can’t judge India’s policies using its own yardsticks when there is a multilateral agreement.”

As many would know that several times in the past, India has unambiguously articulated, it may explore the available option of approaching the World Trade Organization (WTO) for the unilateral moves and actions by the US on IPR related issues, as IPR policies require to be discussed in the multilateral forum, such as WTO.

A fresh hurdle in the normalization process:

Many see the latest move of USTR with OCR as a fresh hurdle in the normalization process of a frosty trade and economic relationship between the two countries. More so, when it comes almost immediately after a clear agreement inked between Prime Minister Modi and President Obama in favor of a bilateral engagement on IPR related policies and issues. Let me hasten to add, USTR has now clarified, “The OCR will not revisit India’s designation on the 2014 Priority Watch List.”

What does US want?

The initiatives taken by the USTR, no doubt, are in conformance to the US law, as it requires to identify and prepare a list of trade barriers in the countries with whom the US has trade relations, and with a clear focus on IPR related issues.

Washington based powerful pharmaceutical industry lobby group – PhRMA, which seemingly dominates all MNC pharma associations globally, has reportedly urged the US government to continue to keep its pressure on India, in this matter. According to industry sources, PhRMA has a strong indirect presence and influence in India too.

It is pretty clear now that to resolve all IP related bilateral issues, the United States wants the Indian Patents Act to be amended as an exact replica of what the American lawmakers have enacted in their country, including evergreening of patents and no compulsory licensing unless there is a national disaster or emergency. They require it, irrespective of whatever happens as a result of lack of access to these new drugs for a vast majority of Indian patients.

Thus, it is understandable, why the Indian government is not surrendering to persistent American bullying.

A series of decisions taken by the Union government of India on both patents and drug pricing is a demonstration of its sincere endeavor to increase access to drugs, as less than 15 percent of 1.2 billion people of the country are currently covered by some sort of health insurance.

Global healthcare NGOs strongly reacted:

The Doctors Without Borders’ (MSF) Access Campaign articulated, “India’s production of affordable medicines is a vital life-line for MSF’s medical humanitarian operations and millions of people in the developing countries.”

It further added, “India’s patent law and practices are favorable to public health, were put in place through a democratic legislative process, and are in line with international trade and intellectual property rules… Every country has the right to set policies that balance private business interests with public health needs.”

MSF reportedly warned Prime Minister Modi that US officials and Big Pharma would continue to try to lobby and pressurize him over India’s current patent regime and urged him, “Don’t back down on drug patents”.

“The world can’t afford to see India’s pharmacy shut down by US commercial interests,” MSF reiterated.

Under US bullying, is India developing cold feet?

In the midst of all these, an international media reported:

“Prime Minister Narendra Modi got an earful from both constituents and the US drug industry about India’s approach to drug patents during his first visit to the US last month. Three weeks later, there is evidence the government will take a considered approach to the contested issue.”

Quoting an Indian media report, the above international publication elaborated, the Department of Industrial Policy and Promotion (DIPP) of India, has delayed a decision on whether to grant a Compulsory License (CL) for Bristol-Myers Squibb’s (BMS) leukemia drug Sprycel. DIPP has sent a letter to the Health Ministry, questioning its rationale for saying there was a “national emergency” when chronic myeloid leukemia affects only 0.001% of the population. The letter asked how much the government is spending on the drug, and pointed out that there is no indication of a growing trend in the disease.

This Indian report commented, if the DIPP had agreed to issue a CL for Sprycel on the recommendation of the Union Ministry of Health, it would have ‘cheered’ the public health activists, but would have adversely impacted Indo-US relations that the Indian Prime Minister wants to avoid for business interests.

A Superficial and baseless interpretation:

In my view, the above comments of the Indian media, which was quoted by the international publications, may be construed as not just superficial, but baseless as well.

This is because, DIPP has become cautious on the CL issue not just now, but at least over a couple years from now (please read: Health Min’s compulsory license proposal hits DIPP hurdle, DIPP seeks details on 3 cancer drugs for compulsory licensing).

This is also not the first time that DIPP has sought clarification from the Ministry of Health on this subject.

Hence, in my view, this particular issue is being unnecessarily sensationalized, which has got nothing to do with hard facts and far from being related to the PM’s visit to America.

Conclusion:

The Indian Parliament amended the Patent Act in 2005, keeping the interest of public health right at the center. The Act provides adequate safeguards, including checks on evergreening of patents and broader framework for CL. All these conform to the Doha Declaration, which categorically states “TRIPS Agreement does not and should not prevent WTO members from taking measures to protect public health”.

For similar reasons, the Indian Act does not provide for ‘evergreening’ of patents. The Supreme Court judgment on Glivec is a case in point. If the Indian patent regime is weak and not TRIPS-compliant, the aggrieved country should approach the dispute settlement body of the WTO for necessary action. Thus, it is intriguing if the US, which took India to WTO over the latter’s solar power policy, is not doing the same for pharma IP. Is it really sure that the allegation that ‘the Indian Patent Act is non-TRIPS compliant’ is a robust one?

There is no denying that innovation is the wheel of progress of any nation and needs to be rewarded and protected. However, there is an equally important need to strike the right balance between patent regimes and safeguarding public health interest. In that sense, the Indian Patents Act occupies a position of strength, not weakness.

Considering all these, unilateral American measures against India for amendment of the country’s Patents Act in sync with theirs, ultimately would prove to be foolhardy.

The high-level working group on IP constituted as a part of the bilateral Trade Policy Forum (TPF), would be the right platform to sort out glitches in this arena, keeping Indian patients’ health interests at the center, and at the same time without jeopardizing justifiable business interests of the innovator companies.

Otherwise in all probability, India would continue to hold its justifiable ground on IPR steadfastly, remaining unfazed under pressures and provocations of any kind.

By: Tapan J. Ray

Has Prime Minister Modi Conceded Ground To America On Patents Over Patients?

Posted on October 6, 2014 by Tapan Ray

Unprecedented high profile engagement of the Indian Prime Minister with various interested groups during his recent visit to the United States under equally unprecedented media glare, has invited overwhelmingly more kudos than brickbats, from across the world.

However, in the context of upholding patients’ health interest in India, a lurking fear did creep in, immediately after his visit to the United States. This was related to whether or not demonstrably tough minded Prime Minister Modi has yielded to enormous pressure created by all powerful American drug lobby against the current Intellectual Property (IP) regime in India.

The backdrop:

This apprehension started bothering many as the Prime Minister appeared to have moved away from a much-reiterated stand of India that any IP related issue would be discussed only in a multi-lateral forum.

That India’s Patents Act is TRIP’s compliant, has been categorically endorsed by a vast majority of international and national experts, including, a key intellectual belonging to Prime Minister Modi’s ‘Think -Tank’ – Arvind Panagariya, Professor of Economics at Columbia University, USA.

Subsequent to my blog post of February 5, 2014, an article dated March 4, 2014 titled “India Must Call The US’ Bluff On Patents” penned by Panagariya stated as follows:

“Critics of the Indian patent law chastise it for flouting its international obligations under the TRIPS Agreement. When confronted with these critics, my (Arvind Panagariya) response has been to advise them:

To urge the US to challenge India in the WTO dispute settlement body and test whether they are indeed right.

Nine years have elapsed since the Indian law came into force; and, while bitterly complaining about its flaws, the USTR has not dared challenge it in the WTO. Nor would it do so now. Why?

There is, at best, a minuscule chance that the USTR will win the case.

Against this, it must weigh the near certainty of losing the case and the cost associated with such a loss.

Once the Indian law officially passes muster with the WTO, the USTR and pharmaceutical lobbies will no longer be able to maintain the fiction that India violates its WTO obligations.

Even more importantly, it will open the floodgates to the adoption of the flexibility provisions of the Indian law by other countries.

Activists may begin to demand similar flexibilities even within the US laws.

On possible actions against India under the ‘Special 301’ provision of the US trade law, Professor Arvind Panagariya argues:

“Ironically, this provision itself was ruled inconsistent with the WTO rules in 1999 and the US is forbidden from taking any action under it in violation of its WTO obligations. This would mean that it couldn’t link the elimination of tariff preferences on imports from India to TRIPS violation by the latter. The withdrawal of preferences would, therefore, constitute an unprovoked unilateral action, placing India on firm footing for its retaliatory action.”

Examples of some global and local views:

On this score, a large number of business experts from all over the world have expressed their views, recently. Some examples are as follows:

The former Chairman of Microsoft India reportedly advised the new ‘Modi Regime’ as follows:

“While the new government must work hard to make India more business friendly, it must not cave in to pressure on other vital matters. For instance, on intellectual property protection, there is enormous pressure from global pharmaceutical companies for India to provide stronger patent protection and end compulsory licensing. These are difficult constraints for a country where 800 million people earn less than US$ 2 per day.”

Maruti Suzuki, India’s largest car manufacturer, aircraft maker Boeing, global pharma major Abbott and technology leader Honeywell have reportedly just not supported India’s IP regime, but have strongly voiced that IPR regime of India is “very strong” and at par with international standards.

The Chairman of the Indian pharma major – Wockhardt also echoes the above sentiment by articulating, “I think Indian government should stay firm on the Patents Act, which we have agreed.”

Other domestic pharma trade bodies and stakeholder groups in India expect similar action from the ‘Modi Government’.

Who are against Indian IP regime?

By and large, American pharma sector and their well-paid lobbyists representing drug multinationals are the strongest critics of Indian Patents Act 2005. They allege that Indian IP law discriminate against US companies and violates global norms, severely affecting their investments in India.

Recent stand of India on unilateral US measures:

Just to recapitulate, on April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘priority watch list country’.

On this report, India responded by saying that the ‘Special 301’ process is nothing but unilateral measures taken by the US under their Trade Act 1974, to create pressure on countries to increase IPR protection beyond the TRIPS agreement.

The Government of India has always maintained that its IPR regime is fully compliant with all international laws.

The Indo-US working group on IP:

The Indo-US high-level working group on IP would be constituted as part of the Trade Policy Forum (TPF). The US-India TPF is the principal trade dialogue body between the countries. It has five focus groups: Agriculture, Investment, Innovation and Creativity, Services, and Tariff and Non-Tariff Barriers.

The recent joint statement issued after talks between Prime Minister Narendra Modi and US President Barack Obama states:

This part of the Indo-US joint statement on IPR created almost a furore not just in India, but in other parts of the world too, interpreting that Prime Minister Modi has conceded ground to America on patents over patients.

IP experts’ expressed concerns even in the US:

Commenting on this specific move by the Obama Administration to push India on issues related to IP, even the independent American healthcare experts expressed grave concern.

Professor Brook K. Baker from the Northeastern University School of Law has reportedly said:

“This working group will give the US a dedicated forum to continue to pressure India to adopt TRIPS-plus IP measures, including repeal of Section 3(d) of the India Patents Act, adoption of data exclusivity/monopolies, patent term extensions, and restrictions on the use of compulsory licenses”.

Professor Baker further said:

“The US, in particular, will work to eliminate local working requirements that India is seeking to use to promote its own technological development…. The fact that this working group will have ‘decision-making’ powers is particularly problematic as it places the US fox in the Indian chicken coop.”

“FDI and innovation are also always rhetorically tied to strong IPRs despite inclusive evidence that typically shows that most low and middle-income countries do not benefit economically from IP maximization, since they are net importers of IP goods. It is also because the path to technological development is ordinarily through copying and incremental innovation – development tools that are severely undermined by IP monopoly rights and their related restrictive licensing agreements,” Baker elaborated.

Jamie Love, Director, Knowledge Ecology International, an NGO working on knowledge governance also reportedly said:

“It is very clearly going to be used to pressure India to expand liberal grants of drug patents in India, and to block or restrain the use of compulsory licenses on drug patents.”

Has India conceded to American bullying?

On this backdrop, during Indian Prime Minister’s interaction with the President of the United States and his aids, it was reportedly decided to set up a high-level working group on IP, as a part of the TPF, to sort out contentious issues which have been hampering investments. This was interpreted by many experts that India has conceded to American bullying, as it apparently deviated from its earlier firm stand that the country would discuss IP issues only in multilateral forum such as the World Trade Organization (WTO).

No change in India’s position on patents:

Taking note of this humongous misunderstanding, on October 4, 2014, the Union Ministry of Commerce in an official clarification reiterated that during Prime Minister Modi’s visit to America:

There has been no change in India’s stated position on Intellectual Property Rights (IPR).

India has reaffirmed that the IPR legal regime in India is fully TRIPS-compliant.

A bilateral Innovation and Creativity Focus Group already exists in the Trade Policy Forum (TPF) since 2010. Any IP related issues have to be discussed by the United States only in the TPF. This group consults each other no less than twice a year on improving intellectual property rights protection and enforcement, enhancing awareness of intellectual property rights, fostering innovation and creativity, and increasing collaboration between American and Indian innovators.

The Indo-US joint statement issued now merely reiterates whatever has existed in the earlier Trade Policy Forum. IPR issues are critical for both the countries and India has been repeatedly raising the issue of copyright piracy and misappropriation of traditional knowledge with the US.

The US agreeing to discuss IPR issues through the bilateral mechanism of the Trade Policy forum is in fact a re-affirmation of India’s stand that issues need bilateral discussion and not unilateral action. The statement on the IPR issue will only strengthen the bilateral institutional mechanism.

Conclusion:

Most part of the above statement is indeed quite consistent to what happened even immediately before the Modi regime.

In September 2013, the Commerce Secretary and India’s Chief trade Negotiator, Rajeev Kher, while terming the decision by the US Trade Representative for not labeling India with its worst offender tag in IP as a ‘very sensible decision’, strongly defended India’s right to overrule patents in special cases to provide access to affordable innovative medicines to its 1.2 billion people.

Moreover, many recent judicial verdicts have vindicated that a strong and balanced patent regime of the country not just secures the bonafide rights of the patentee, but at the same time ensures genuine needs of the public and in case of pharma of the ailing patients.

The Indian Supreme Court judgment on Glivec of Novartis in the recent past, have re-established, beyond an iota of doubt, that to secure and enforce patents rights of genuine inventions, other than evergreening, India provides a very transparent IP framework.

Taking all these into consideration, it seems unlikely to me that Prime Minister Modi, who is a self-confessed nationalist and holds India’s interest first, would in any way compromise with the country’s TRIPS compliant patent regime, sacrificing millions of Indian patients’ health interest at the altar of American business needs.

The above official clarification by the Union Ministry of Commerce is expected to tame the fire of this raging debate to a great extent. However, the grave concern expressed in the following lines by the independent healthcare experts, such as Professor Baker, on the high-level IP working group, cannot just be wished away:

“The fact that this working group will have ‘decision-making’ powers is particularly problematic as it places the US fox in the Indian chicken coop.”

That said, from your government Mr. Prime Minister “Yeh Dil Maange Much More”.

By: Tapan J. Ray

PILMAN

A Tapan Ray Website

Tag Archives: TRIPS

Dwindling Drug Innovation: Declining Image: Unchanged Business And Advocacy Models

Indian Patents Act To Prevail Undiluted…Finally

TPP: Discord Within A Strange Mélange And Impact On Access To Medicines

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

‘Data Protection’: Needs A Clear Direction…But Is It An IPR Issue?

Reverberations Around The Proposed New IPR Policy Of India

Has Prime Minister Modi Conceded Ground To America On Patents Over Patients?