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Does the Landmark Glivec Judgment Discourage Innovation in India?

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

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

“191. We have held that the subject product, the beta crystalline form of Imatinib Mesylate, does not qualify the test of Section 3(d) of the Act but that is not to say that Section 3(d) bars patent protection for all incremental inventions of chemical and pharmaceutical substances. It will be a grave mistake to read this judgment to mean that section 3(d) was amended with the intent to undo the fundamental change brought in the patent regime by deletion of section 5 from the Parent Act. That is not said in this judgment.”

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

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

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

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

A critical point to ponder:

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

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

Patentability of ‘Incremental Innovations’ in India:

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

“The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.

Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”

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

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

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

The Honorable Court under the same point 180 further elaborated:

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

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

The rationale behind Section 3(d):

A report on ‘Patentability of the incremental innovation’ indicates that the policy makers keeping the following points in mind formulated the Indian Patents Act 2005:

  • The strict standards of patentability as envisaged by TRIPS pose a challenge to India’s pharmaceutical industry, whose success depended on the ability to produce generic drugs at much cheaper prices than their patented equivalents.
  • A stringent patent system would severely curtail access to expensive life saving drugs to a large number of populations in India.
  • Grant of a product patents should be restricted only to “genuine innovations” and those “incremental innovations” on existing medicines, which will be able to demonstrate significantly increased efficacy over the original drug.

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

A study by the ‘Indian Pharmaceutical Alliance (IPA)’ indicates that 86 pharmaceutical patents granted by the IPO post 2005 are not breakthrough inventions but only minor variations of existing pharmaceutical products and demanded re-examination of them.

Possible implications to IPA challenge:

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

Examples of revocation of patents in India:

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

The report also states that AstraZeneca suffered its first setback on Gefitinib in June 2006, when the Indian generic company Natco Pharma opposed the initial patent application filed by the global major in a pre-grant opposition. Later on, another local company, GM Pharma, joined Natco in November 2006.

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

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

Though Roche was granted a patent for Pegasys by the Indian Patent Office (IPO) in 2006, this was subsequently contested by a post-grant challenge by the large Indian pharma player – Wockhardt and the NGO Sankalp Rehabilitation Trust (SRT) on the ground that Pegasys is neither a “novel” product nor did it demonstrate ‘inventiveness’, as required by Section 3(d) of Patents Act of India 2005.

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

Similarly the patent for liver and kidney cancer drug of Pfizer – Sutent (Sunitinib) granted by IPO in 2007, was revoked by the IPAB in October, 2012 after a post grant challenge by Cipla and Natco Pharma on the ground that the claimed ‘invention’ does not involve inventive steps.

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

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

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

Another related development of the last week:

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

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

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

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

The proponents of ‘no change required in the Section 3(d)’ argue, ‘Patent Challenge’ is a legal process all over the world, the Government has hardly got any role to play in settling such disputes. The law should be allowed to take its own course for all disputes related to the Patents Act of the country, including Section 3(d).

They also opine that India must be allowed to follow the law of justice without casting aspersions on the knowledge and biases of the Indian judiciary for vested interests.

That said, there is certainly an urgent need to add speed to this legal process by setting up ‘Fast-track Courts’ for resolving all Intellectual Property (IP) related disputes in a time bound manner.

Arguments against Section 3(d):

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

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

Importance of ‘Incremental Innovation’ in India:

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

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

  • As per the National Knowledge Commission, while 37.3% of Indian companies introduced breakthrough innovations in recent years, no fewer than 76.4% introduced incremental innovations.
  • 60 percent of the drugs on the World health Organization’s essential Drug list reflect incremental improvements over older drugs.

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

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

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

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

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

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

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

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

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

View of the Glivec inventor: 

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

Are discordant voices out of step with time?

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

Conclusion:

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

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

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

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

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

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

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

By: Tapan J. Ray

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

The Ghost Keeps Haunting: NCD Dogs Cancer in ‘Compulsory License’ Debate of India

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In November 2012, as a part of the ‘Campaign for Affordable Trastuzumab’ for the treatment of breast cancer, a citizens’ collective, reportedly sent an ‘Open Letter’ signed by around 200 cancer survivors, women’s groups, human rights and health rights campaigns and treatment activists from across the world to the Indian Prime Minister, urging him to ensure that the breast-cancer drug Trastuzumab is made affordable for treating cancer patients in the country.

Trastuzumab was named because of the following reasons:

  • Breast-cancer affects around 28-35 per cent of all cancers among women in major cities of India.
  • No other drug against HER+2 cancer can reduce patients’ mortality as Trastuzumab and reduce the spread of malignancy to other parts of the body.
  • Majority of women with HER+2 breast cancer do not have access to a complete course of the drug, which reportedly costs anywhere between Rs 6 to 8 lakhs (US$ 11,000 to US$ 14,500).

Reaping reach harvest: 

According to a media report, three homegrown Indian companies are currently developing biosimilar drugs to this protein molecule to reap a reach harvest arising out of the emerging opportunities.

However, this is expected to be an arduous, expensive and challenging endeavor, as the concerned companies will require pursuing a complicated biotechnological route to create follow-on biologics for Trastuzumab.

The ‘Trigger Factor’: 

It is widely believed that the above ‘Open Letter’ to the Prime Minister had prompted the Ministry of Health to form an ‘Experts Committee’ to evaluate the situation and make recommendations accordingly.

Thereafter, within a short period of time, in January, 2013, in a move that is intended to benefit thousands of cancer patients, Ministry of Health forwarded the report of the above ‘Experts Committee’ to the Department of Industrial Policy and Promotion (DIPP) for its consideration to issue Compulsory Licenses (CL) for three commonly used anti-cancer drugs namely, Trastuzumab (used for breast cancer), Ixabepilone (used for chemotherapy) and Dasatinib (used to treat leukemia). Public Health Foundation of India (PHFI), among other experts, also reportedly had participated as a member of this ‘Experts Committee’,

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

 A ‘Technology Transfer’ discouraged: 

Such a rapid development in the CL landscape of India is indeed intriguing, especially after a voluntary announcement by Roche in 2012 that it will produce Trastuzumab and Rituximab in India through transfer of technology to an Indian contract manufacturer.

Consequently for a month’s treatment, the price of Trastuzumab will come down from around US$ 2,000 to US$ 1, 366, i.e. by 31 percent and Rituximab from around US$ 1,456 to US$ 682 i.e. by 53 percent. This was reportedly announced by none other than the Minister of State of Chemicals and Fertilizers of India Mr. Srikant Jena.

Despite this voluntary decision of technology transfer and price reduction of two life saving drugs in India by Roche, reported Government consideration for grant of CL for Trastuzumab, without getting engaged in any form of a win-win dialogue with the Company, could ultimately prove to be counter productive and may discourage further technology transfer of expensive patented drugs to India.

Increasing incidence of cancer in India: 

Cancer is just not a dreaded disease, but also making a devastating impact, financial and otherwise, on the lives and families of thousands of sufferers in India.

According to ‘The Lancet’, published on 28 March 2012, in India 556 400 people died of cancer only in 2010.

The paper also comments that only half of the estimated 9.8 million total deaths per year is captured by the CRS in India, fewer than 4 percent are medically certified, while more than 75 percent of deaths occur at home.

The Lancet study clearly highlights that most cancer patients in India die without medical attention and drugs. Cancer is, therefore, increasingly becoming a public sensitive disease area with high socioeconomic impact in the country. High treatment cost of this near terminal disease is beyond reach of majority of population in the country.

In a written reply to a question in the ‘Upper House’ of the Indian Parliament, the Minister of State for Health and Family Welfare on March 4, 2012 said that according to “Three Year Report on Population Based Cancer Registries 2006 – 08″ of the Indian Council of Medical Research (ICMR), the estimated numbers of cancer patients for 2015 and 2020 are 1.16 million and 1.27 million respectively. There is a gradual rise in the prevalence of cancer in India, though the government has initiated several measures in this area.

High incidence of breast cancer: 

As per a recent report, an estimated 1, 00,000 – 1, 25,000 new patients suffer from breast cancer every year in India and this number is expected to double by 2025.

Government is mulling CL for NCD: 

Currently the DIPP appears to be planning to extend the provision of Compulsory License  (CL) beyond cancer drugs to other Non-Communicable Diseases (NCD) in the country, like diabetes. 

Domestic Pharma Association supports the move: 

A major domestic pharmaceutical industry association, as per media reports, supports this move by clearly articulating, “Over the years, more deaths are taking place on account of Non-Communicable Diseases (NCDs) than communicable ones. It is, therefore, natural that this provision (CL) will be used for NCDs as well.”

UN declaration on NCD provides flexibilities in TRIPS Agreement: 

Experts believe that this new move on CL for drugs related to NCDs is a consequence of India’s signing the United Nation (UN) declaration on the prevention of NCDs in the country by, among others, using flexibilities in the TRIPS Agreement to increase availability of affordable drugs for such diseases.

The Government has already launched a “National Program for Prevention & Control of Cancer, Diabetes, Cardio Vascular Diseases and Stroke (NPCDCS)” as a pilot project covering 150 million people in 100 inaccessible and most backward districts during the financial year 2011-2012 at a cost of US$ 275 million.

Socio-economic impact of NCDs in India: 

Indian Journal of Community Medicine (IJCM) in an article titled, “Social and Economic Implications of Non-Communicable Diseases (NCDs) in India” has highlighted, among others as follows:

  • NCDs account for 62 percent of the total disease burden in India with a significant ascending trend both in terms of overall mortality and morbidity.
  • This burden is likely to increase in the years to come.
  • Due to chronic nature of the disease and technological advancements in care, costs of treatment are high leading to access barriers, or ‘catastrophic expenditures’ for those who undergo treatment.
  • There are evidences of greater financial implications for the poorer households suffering from NCDs.
  • Most estimates suggest that the NCDs in India account for a significant economic burden ranging from 5 to 10 percent of GDP.
  • An urgent multi-sectoral Government action is strongly warranted both on grounds of economic arguments and social justice.
  • Action needs focus on addressing the social determinants of NCDs for prevention and strengthening of health systems to meet the challenge.
  • A framework for monitoring, reporting, and accountability is essential to ensure that the returns on investments in NCDs meet the targets and expectations set in the national plans.

Innovator companies contemplating legal recourse: 

Reacting to all these developments, the global pharmaceutical companies have, once again, expressed strong commitment to protect and continue to defend their Intellectual Property Rights (IPR) within the legal framework of India.

They have also reiterated their belief that a robust IPR regime will encourage innovation in the country making available more and more innovative drugs for the patients in India.

An interesting WHO report on a ‘robust IPR regime’: 

In this regard a World Health Organization (WHO) research report titled “Patents, Price Controls and Access to New Drugs: How Policy Affects Global Market Entry” makes some interesting observations on a ‘robust IPR regime’.

The report highlights the following four important points:

1. Increasing the strength of a patent system to include long-term protection on pharmaceutical products appears to spur market entry mostly in the high-income countries.

For the low- and middle-income countries that are currently being encouraged to move to stronger protection through trade policies, the evidence that extending protection enhances access to new pharmaceuticals is mixed.

2. There is some evidence that high level of protection might encourage more frequent entry of innovative products in the short term. However, in the longer term the same domestic capacity could well be an alternative source of entry of such drugs.

3. Intellectual Property (IP) holders frequently assert that the poor quality of enforcement in developing countries undermines the value of their patent rights. However, it is quite evident now that patent laws in these countries are at least broadly meaningful commensurate to their respective domestic requirements.

4. The standard argument on price regulation that it will dissuade market entry for innovative drugs appears to have more relevance among the high-income countries and not so for the poorer countries.

The authors further indicate:

“There we find that while price regulation makes it less likely that new drugs will be available quickly, it does not appear to prevent new products from being launched eventually.”

Conclusion: 

Following all these recent developments and weighing pros and cons, one could well imagine that pressure on the Government from various stakeholders for CL on drugs for Cancer and NCDs will keep mounting, unless an alternative measure like, ‘Price Negotiation for Patented Drugs’ is put in place by the Department of Pharmaceuticals, sooner than later, in 2013.

The recent judgment of the ‘Intellectual Property Appellate Board (IPAB)’ on CL to Natco may further add fuel to this raging debate.

It is now quite clear from the Finance Minister’s speech on the ‘Union Budget Proposal’ for 2013-14 that eagerly awaited ‘Universal Health Coverage’ or ‘Free Distribution of Essential Medicines to all’ schemes will not be implemented, at least for now.

Thus in all probability, the ghost of CL will keep haunting the innovators in India unabated, unless an effective, scalable and sustainable model for improving access to patented drugs for majority of population in the country is put in place. This will call for demonstrative, innovative and constructive Public-Private-Partnership (PPP) initiatives, sooner. In this effort  all concerned should at first be aligned with the cause, in principle, and try to be a constructive partner to get it translated into reality together, rather than just playing the role of vociferous critics in perpetuity .

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.

Balancing Strong IP Protection, Public Health Safeguards and Declining R&D Productivity – A Crafty Gutsy Ball Game

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Pharmaceutical innovation has always been considered the lifeblood for the pharmaceutical industry and very rightly so. However, many studies do point out that such innovation has benefited the developed world more than the developing world.

Product Price and Access:

In the paper titled ‘TRIPS, Pharmaceutical Patents and Access to Essential Medicines: Seattle, Doha and Beyond’, published in ‘Chicago Journal for International Law, Vol. 3(1), Spring 2002’, the author argues, though the reasons for the lack of access to essential medicines are manifold, there are many instances where high prices of drugs deny access to needed treatments for many patients. Prohibitive drug prices, in those cases, were the outcome of monopoly due to strong intellectual property protection.

The author adds, “the attempts of Governments in developing countries to bring down the prices of patented medicines have come under heavy pressure from industrialized countries and the multinational pharmaceutical industry”.

While the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) of the World Trade Organization (WTO) sets out minimum standards for the patent protection for pharmaceuticals, it also offers adequate safeguards against negative impact of patent protection or its abuse in terms of extraordinary and unjustifiable drug pricing. The levels of these safeguards vary from country to country based on the socio-economic and political requirements.

The Doha Declaration:

Many independent experts in this field consider the Doha Declaration as an important landmark for recognizing the primacy to public health interest over private intellectual property and the rights of the members of WTO to use safeguards as enumerated in TRIPS, effectively.

To protect public health interest and extend access to innovative medicines to majority of their population whenever required, even many developed/OECD countries do not allow a total freehand for the patented products pricing in their respective countries.

Early signals of global empathy:

While expressing similar sentiment ‘The Guardian’ reported that Andrew Witty, the global CEO of GlaxoSmithKline, has decided to slash prices on all medicines in the poorest countries, give back profits to be spent on hospitals and clinics and more importantly share knowledge about potential drugs that are currently protected by patents.

Witty further commented that he believes, drug companies have an obligation to help the poor patients getting appropriate treatment and reportedly challenged other pharmaceutical giants to follow his lead.

An interesting study:

A study titled, ‘Pharmaceutical innovation and the burden of disease in developing and developed countries’ of Columbia University and National Bureau of Economic Research, to ascertain the relationship across diseases between pharmaceutical innovation and the burden of disease both in the developed and developing countries, reported that pharmaceutical innovation is positively related to the burden of disease in the developed countries but not so in the developing countries.

The most plausible explanation for the lack of a relationship between the burden of disease in the developing countries and pharmaceutical innovation, as pointed out by the study, is weak incentives for firms to develop medicines for the diseases of the poor.

Point – Counterpoint:

A contrarian view to this study argues that greater focus on the development of new drugs for the diseases of the poor should not be considered as the best way to address and eradicate such diseases in the developing countries. On the contrary, strengthening basic healthcare infrastructure along with education and the means of transportation from one place to the other could improve general health of the population of the developing world quite dramatically.

The counterpoint to the above argument articulates that health infrastructure projects are certainly very essential elements of achieving longer-term health objectives of these countries, but in the near term, millions of unnecessary deaths in the developing countries can be effectively prevented by offering more innovative drugs at affordable prices to this section of the society.

A solution emerging:

Responding to the need of encouraging pharmaceutical innovation without losing focus on public health interest, in 2006 the ‘World Health Organization (WHO)‘ created the ‘Inter-governmental Working Group on Public Health, Innovation and Intellectual Property (IGWG)‘. The primary focus of IGWG is on promoting sustainable, needs-driven pharmaceutical R&D for the diseases that disproportionately affect developing countries.

Declining R&D productivity:

Declining R&D productivity adds another dimension to this raging debate with a snowballing effect, as it were.

Over a period of decades, the business models for small-molecule based blockbuster drugs have successfully catapulted the global pharmaceutical business to a high-margin, dynamic and vibrant industry. However, a time has now come when the golden path from the ‘mind to market’ of the drug discovery process is becoming increasingly arduous and prohibitively expensive.

Deploying expensive resources to discover a New Chemical Entity (NCE) with gradually diminishing returns in the milieu of very many ‘me too’ types of new drugs, does no longer promise a strong commercial incentive.

The impact of the above scenario also gets reflected in the status of International patent filings under the Patent Cooperation Treaty (PCT) of the ‘World Intellectual Property Organization (WIPO)’ as follows:

A. Last five years, PCT filings:

The last five years’ PCT filing status does not seem to be encouraging either.

Year

PCT Filings

Change %

2007

159,926

2008

163,240

2.1

2009

154,406

(5.4)

2010

164,316

6.4

2011

181,900

10.7 *(E)

* Estimate

B. Country-wise PCT Filing in 2011:

While having a closer look at the data, it becomes quite evident that in terms of percentage increase in the PCT filings two Asian countries, China and Japan, have registered their overall dominance. However, in terms of absolute number USA still ranks first.

County

No. Of PCT Filings

% Increase

USA

48,596

8

China

16,401

33.4

Japan

38,888

21

Germany

18,568

5.7

South Korea

10,447

8

C. Technical-field-wise PCT Filing in 2011:

In terms of the technical fields, pharmaceuticals ranked fifth in 2011.

Rank

 Industry

No. Of PCT Filings

1.

 Electrical Machinery, Apparatus, Energy

11,296

2.

 Digital Communication

11,574

3.

 Medical technology

10,753

4.

 Computer technology

10,455

5.

 Pharmaceuticals

7,683

6.

 Organic fine chemistry

5,283

7.

 Biotechnology

5,232

D. Biotech/Pharma companies featuring in WIPO’s Top 100 filers list:

Very few biotech and pharmaceutical companies featured in the Top 100 PCT filers’ list of WIPO as follows:

Company
1. Procter & Gamble
2. Sumitomo Chemical
3. DuPont
4. Dow Global
5. Novartis AG
6. Roche
7. Merck GmbH
8. Sanofi-Aventis GmbH
9. Bayer CropScience AG

E. The top five university PCT filers in 2011:

Universities of the US dominated among the PCT filings by the Academic institutions as follows:

University

No. Of PCT Filings
University of California, US

277
Massachusetts Institute of Technology, US

179
University of Texas System, US

127
Johns Hopkins University, US

111
Korea Advanced Institute of Science and Technology, South Korea

103

Need to encourage pharmaceutical innovation:

Based on the WIPO data, as mentioned above, the current status of the global pharmaceutical innovation does not seem to be very encouraging.

That said, in the environment of declining R&D productivity of the global pharmaceutical industry, there is indeed a strong requirement to encourage pharmaceutical innovation across the globe, based on the socio-economic environment of each country, together with adequate safeguards in place to protect public health interest.

Why protect patent?

The pharmaceutical major Eli Lilly has very aptly epitomized the reason for patent protection in their website called ‘LillyPad’, as follows:

“Pharmaceutical companies continue to invest in innovation not only because it is good for business, but it is what patients expect. If we want to continue to have breakthrough products, we need patent protection and incentives to invest in intellectual property.  The equation is simple, patents lead to innovation – which help lead to treatments and cures”.

Conclusion:

Currently, various socio-economic expectations, demands and requirements, not just for the poor, but also of the powerful growing middle class intelligentsia are gradually getting unfolded on this subject from many parts of the globe. These collective demands cannot be either wished away or negotiated with a strong belief that the future should be a replication of the past.

There should be full respect, support and protection for innovation and the product patent system in the country. This is essential not only, for the progress of the pharmaceutical industry, but also to alleviate sufferings of the ailing population, effectively.

At the same time, available indicators point out that the civil society would continue to expect in return just, fair, responsible and reasonably affordable prices for the innovative medicines, based on the overall socio-economic status of the local population. Some experts have already opined that prices of life saving innovative drugs, unlike many other patented products, will no longer remain ‘unquestionable’ in increasing number of countries.

Thus, even at the time of declining pharmaceutical R&D productivity, striking a right balance  between a strong patent regime and safeguarding overall health interest of its population, particularly of those with a very high ‘out of pocket’ expenditure towards healthcare, will indeed be a crafty gutsy ball game for a 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.

EU-FTA, TRIPS-Plus provisions, Data Exclusivity, Public Interest and India

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Business Standard in its January 27, 2011 edition reported, “Data Exclusivity still key hurdle to India-EU FTA”
Before deliberating on this important issue of “Free Trade Agreement (FTA)”, let me touch upon very briefly, for the benefit of all concerned, the pros and cons of the FTAs.
Free Trade Agreements (FTAs):
Free Trade Agreements (FTAs), as we know, are treaties signed between the governments of two or more countries, where the countries agree to partially or completely lift the import tariffs, taxes, quotas, special fees, other trade barriers and regulatory issues to allow increased business, benefitting each country.
The Pros and Cons:
Consumers of each country are the key beneficiaries of FTAs with increased supply of various products of wider choices at lesser prices with consequent increase in market competition and market penetration.
The cons of the FTAs are apprehensions that arising out of fierce competition and increasing supply of imported products at lesser prices, the demand for domestic goods decline, leaving an adverse impact on the domestic business performance with consequent job losses, especially, in the manufacturing sector. In addition, because of lower import tariff, revenue collection of the government may also get adversely affected.
The scenario is no different for the pharmaceutical sector of the country.
A recent example:
The most recent example is the FTA between India and Japan. This will include both trade and investments, increasing the bilateral trade and commerce between the two countries to around US$ 11 billion. With this Agreement, Indian pharmaceutical products will be able to get access to the highly regulated and the second largest pharmaceutical market of the world.
The key issues with EU FTA:
1. It wants to include IPR issues like Regulatory Data Protection (RDP) or Data Exclusivity (DE) 2. RDP is a TRIPS-plus provision and its inclusion will delay the launch of generics 3. Delayed launch of generics would adversely impact the ‘public interest’.
A paradigm shift has taken place in India:
As we know, January 1, 1995 ushered in a new era, when the agreement of the World Trade Organization (WTO) on Trade-Related Aspects of Intellectual Property Rights (TRIPS), became effective for its member countries. This Agreement significantly changed the international Intellectual Property (IP) regime with the introduction of the principle of minimum intellectual property standards.
This would, therefore, mean that any IP related agreement that will be negotiated subsequent to TRIPS between WTO members can only create higher than the specified minimum standards.
What is ‘TRIPS Plus’?
The ‘TRIPS-plus’ concept usually would encompass all those activities, which are aimed at increasing the level of IP protection for the right holders beyond what is stipulated in the TRIPS Agreement.
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 interest’.
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 Compulsory    Licenses (CL) – Delaying the entry of generics
Is section 39.3 an example of ‘TRIPS Plus’ provision?
The raging debate around Regulatory Data Protection (Data Exclusivity) as indicated under Article 39.3 of TRIPS is perhaps unique in terms of apprehension of the generic pharmaceutical industry on its possible adverse impact on their business and very recently of the Government of India because of the share of voice of the pressure groups following the EU-FTA.
Be that as it may, the moot question is, even if these provisions are ‘TRIPS Plus’, are these good for India?

Key arguments in favor of RDP in India:
1. It will not extend Patent life and promote evergreening:
However, there is hardly any evidence that RDP does not get over well before the patent expires. Thus RDP does extend the patent life of a product and hence is not ‘Evergreening’.
2. It will not delay the launch of generics because of safeguards provided in the Indian Patent Act, just like in the USA:
A robust ‘Data Exclusivity (DE)’ regime is effective in the USA since over decades. Despite DE, the world witnesses quickest launch of generic products in that country without any delay whatsoever. This has been possible in the USA, because of existence of the‘Bolar Provision’, which allows the generic players to prepare themselves and comply with all regulatory requirements, using the innovators data wherever required and keep the generic product ready for launch immediately after the patent of the innovator product expires in the country.
I reckon similar ‘Bolar like provision‘ exists in the section 107A of the Indian Patent Act. This particular section allows, in a similar way that generic entry is not delayed in India after patent expiry of the respective innovator products.
Though the generic players of India, by and large, are up in arms against RDP (protection against disclosure and unfair commercial use of the test data) in India, highest number of ANDAs are being filed by the Indian companies, just next to the USA, despite a stringent DE provisions being in force there.
Moreover, inspite of very stringent IPR regulations, Generic prescriptions are quite popular in the USA. Around 62% of the total prescriptions in that country are for generic pharmaceuticals.
Thus the key apprehension that the RDP provision in the EU-FTA will delay the launch of generic  pharmaceutical products in India and will go against ‘Public Interest’ seems to be unfounded to me.
Government report indicates RDP is good for India:
The Government of India appointed ‘Satwant Reddy Committee’ report (2007) also categorically recommended that RDP is good for the country and should be introduced in a calibrated way.The committee examined two industries:
- Pharmaceuticals – Agrochemicals
Meanwhile, a 3 year RDP for Agrochemicals has been accepted by the Government of India, vindicating the fact that even if section 39.3 is considered as ‘TRIPS Plus’, RDP, as such, is good for the country.
Thus the question whether Section 39.3 is ‘TRIPS Plus’ or not, does not appear to be relevant while discussing EU-FTA, after following the above sequence of events in India.
Conclusion:
The issue of RDP appears to me more a regulatory than an IPR related subject in EU-FTA negotiation process and should be treated as such. It means RDP is more related to the ‘Drugs and Cosmetics Act’ of India rather than the ‘Patent Act 2005′. The media hype that an IPR issue in the form of RDP is being taken up in the EU-FTA negotiation also seems to be misplaced.
Let me hasten to add that I do not hold any brief directly or indirectly for or against the EU-FTA. Neither do I wish to make any general comment on the EU-FTA as such, because the agreement will deal with various other important issues of our nation’s interest involving intensive negotiations between the sovereign countries, at the government level.
However, even without going into the merits or demerits of the EU-FTA, it appears to me that the arguments put forth by a group of people against RDP related to the EU-FTA are indeed not robust enough and possibly have been prompted more by the vested interest groups rather than the ‘Public Interest’.

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.

Does the Indian Patents Act conform to Article 27 (Patentable Subject Matter) of TRIPS on the issue of ‘local working of patents’?

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India is one of the signatories of TRIPS and has a national commitment on adherence to this important international agreement. It is, therefore, widely believed that the amended Indian Patents Act will be TRIPS compliant.

A recent circular from CGPTD:

Recently, the Controller General of Patents, Trademarks and Designs (CGPTD) of India through a circular dated December 24, 2009, directed all Patentees and Licensees to furnish information in ‘Form No.27’ on ‘Local Working of Patents’ as prescribed under Section 146 of the Patents Act., Although this directive is again a statutory requirement, nevertheless it has given rise to many speculations in several quarters as to whether ‘importation’ of products patented in India, will be considered as ‘local working of patents’ or not.

The Last date for filing the information is March 31, 2010. Only history will tell us about the possible future impact of this notification.

What does Article 27.1 say in this regard?

The Article 27.1 of TRIPS, for which India is a signatory, indicates as follows on ‘local working of patents’:

“1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.”

Thus as per Article 27.1 of TRIPS, if commercialization of a product patented in India, is done in India whether through imports or local manufacturing, will be considered as ‘local working of patents’.

Does Section 83 B of the Indian Patents Act conform to Article 27.1 of TRIPS?
One observes, despite Article 27.1 of TRIPS agreement, section 83 (General principles applicable to working of patented inventions) of the Indian patents Act says the following:

“(b) that they (patents) are not granted merely to enable patentees to enjoy monopoly for the importation of the patented article.”

Thus the questions that will need to be answered now are as follows:
i. Does Section 83.b conform to TRIPS 27.1?

ii. If yes, how?

iii. If not, does it merit an amendment?

iv. If the issue goes for litigation, what could the Indian High Courts likely to interpret as ‘local working of patents’?

Could it give rise to any possibility to trigger ‘Compulsory Licensing (CL)’?

For ‘Compulsory Licensing’, Section 84 of the Indian Patents Act indicates the following:

“At any time after expiration of three years from the date of the grant of patent, any person interested may make an application to the Controller for grant of compulsory license on patent on ANY of the following grounds namely:

(a) that the reasonable requirements of the public with respect to the patented invention has not been satisfied, or

(b) that the patented invention is not available to the public at a reasonable affordable price, or

(c) that the patented invention is not worked in the territory of India”

Once again, the answer to yet another question that all concerned will be interested to know is as follows:

i. What could possibly be the determinants for the India Patent Office (IPO) or High Courts to interpret, “available to the public at a reasonable affordable price?”

Conclusion:

If these two sets of questions could find conclusive answers, much of the speculations, which are now floating around on what could the information provided through ‘Form 27’ be used or misused by the interested parties, to revoke a patent on the grounds of ‘local working’ or trigger a CL under Section 84.

In my personal view establishing either of these two grounds to the IPO to derive sheer commercial benefits, could indeed be a daunting task for any interested party.

By Tapan Ray

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

IPR, Biodiversity and India

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The issue of conservation of the biological resources of a country, whether these are local crops or useful plant varieties, available in remote areas of the country, has become a subject of debate in the paradigm of Intellectual Property Rights (IPR). The use of local knowledge and the traditional use of these biological resources are interwoven in the cultural milieu of a region.

Two major international agreements:

Following two major international agreements deal with this issue:

1. The Convention of Biological Diversity (CBD)

2. Trade Related Intellectual Property Rights (TRIPS)

It is worth mentioning that countries like, India, Mexico, Philippines, Peru etc, are coming up with the local country-specific legislation to effectively deal with this issue.

Experts’ Views:

Many experts suggest that IPR may be judiciously used to effectively protect the biological resources. Such use of IPR may range from preventing misappropriation to significant increase in utilization of various resources and investments towards their conservation.

However, others express quite a different view, voicing that the IPR system may work against conservation of biological resources by ‘undermining the knowledge system, culture and social structure.’

Recently there was a suggestion that each country should take some well articulated legal steps to conserve its precious biological resources. It must ensure that only those steps, which are compatible with the concept of ownership and the value system of the local population, are to be taken into account during IPR system of negotiation, related to such biological resources. These experts argue that an IPR system must support appropriate conservation through effective management of biodiversity.

There is yet another totally different school of thought leaders, who nurture a very strong view, which is as follows:

“The history of IPRs shows that the monopolistic hold of governments, corporations and some individuals over biological resources and related knowledge is continuously increasing. A substantial amount of this monopolisation is built upon, and through the appropriation of, the resources conserved and knowledge generated by indigenous and local communities.”

Some IPR related ‘scandals’ in this area:

Activities like the following, which are treated as IPR related scandals keep sending shock waves to many:

1. A Patent was granted vide the US Patent No. 5,401,504, to the healing properties of the ancient Indian herbal remedies turmeric ,which is a traditional knowledge to the Indians, since many centuries.

2. A Patent was granted vide the US Patent No. 5,663,484 to varieties of Basmati rice grown traditionally in both North India and Pakistan.

3. A Patent was granted vide the US Patent No. 5,397,696 to human cell line (human genetic material) of a Hagahai tribesman from Papua New Guinea.

These are just illustrative examples and not exhaustive.

Steps taken by some developing countries:

Alarmed by all these developments, some of the developing countries of the world are seriously contemplating the following:

1. Preventing indigenous traditional knowledge from being “pirated” with IPR claims driven solely by commercial interests.

2. Restricting access to biological resources with appropriate regulatory measures.

Measures taken by India:

A. Legal measures have now been taken by India to address this issue:

1. New plant varieties can now be protected in India under the New Plant Variety and Farmers Rights Protection Actin 2001 and cannot be protected through patents.

2. Protection of ‘Geographical Indications (GI)’, which identify goods as originating in the territory of a member or a region or a locality in that territory, where a given quality reputation or other characteristics of the goods is attributable to their geographical origin.

4. For registration of GI, all applicants will require applying in writing to the Registrar for the registration of such indications.

B. Following GIs cannot be registered in India :

• Use of which would be likely to deceive or cause confusion or contrary to any law.

• Comprising or containing scandalous or obscene matter or any matter likely to hurt religion susceptibility of any class or section of citizens of India.

• Which would otherwise be disentitled to protection in a court.

• Which are determined to be in generic names and are not or ceased to be protected in their country of origin or which have fallen into disuse in that country.

• Which, although literally true as to the territory, region or locality in which the goods originate, but falsely represent to the persons that the goods originate in another territory, region or locality.

C. Punishment for falsifying a Geographical Indication:

A sentence of imprisonment for a term between six months to three years and a fine between fifty thousand rupees and two lakh rupees is provided in the Act. The court may reduce the punishment under special circumstances.

D. Term of GI protection:

The registration of a GI shall be for a period of ten years but may be renewed from time to time for an unlimited period by payment of the renewal fees.

Conclusion:

Detailed studies regarding the involvement of community in conservation and protection of biodiversity along with their drivers and barriers will be of immense use. One-dimensional view of innovation, based only on profit motive, in the space of biodiversity and food security, especially for the developing countries, like India, calls for more enlightened debate within the civil society.

By Tapan Ray

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

Regulatory Data Protection (RDP) and its need in India: The Myth versus Reality

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THE MYTH:

An attempt to delay the launch of Indian generics:

Some in India feel that Regulatory Data Protection (RDP), is a deliberate attempt by the innovator companies to delay the launch of the generic equivalent of patented products in India, as long as they possibly can.

Thus they feel that why should one re-invent the wheel? Why should the generic pharmaceutical companies be not allowed to continue with the current requirement by the Drug Controller General of India (DCGI) to establish only the ‘bio-equivalence of an innovator drug to get the marketing approval of the generic equivalent in India?

RDP will effect export in non-regulated markets:
They further argue that India currently exports its pharmaceutical products to around 50 non-regulated markets of the world. Thus the enforcement of RDP would jeopardize Indian Pharmaceutical exports in those countries affecting the economy of the country.

RDP is a non-binding clause in TRIPS:

Regarding Article 39(3) of TRIPS, which indicates protection of regulatory data against “disclosure” and “unfair-commercial use”, this group opines that this is a non-binding Article of TRIPS, neither does it specify any timeline to protect such data. Moreover, they feel, that only the “undisclosed data” may be protected and the data already “disclosed” ‘need not to be protected’.

RDP is an attempt towards “evergreening” the patent:

The proponents of this interpretation believe that RDP is just an attempt to “evergreen” a patent, extending the patent life of a New Chemical Entity (NCE) or (NME) beyond 20 years.

THE REALITY:

Just Like Patents, Regulatory Data need to be protected to encourage innovation in India:

This group feels that generation of exhaustive regulatory data entails very significant investment in terms of money, energy and time. These are very high risk investments as approximately one in 5000 molecules researched will eventually see the light of the day in the market place. It is worth noting that clinical development of an NCE/NME costs around 70%, while the cost of discovery of the same NCE/NME is around 30% of the total costs. It is estimated that the entire process of drug development from discovery to market takes an average of 10 years and costs on an average U.S.$ 1.7 Billion in the developed markets of the world.

Since such voluminous regulatory data are not only costly and time consuming but also proprietary in nature, these need to be protected by the regulators. Regulatory Data Protection (RDP), therefore, has been widely recognized as an integral part of the Intellectual Property Rights (IPR).

The agreement on Trade Related aspects of Intellectual Property Rights (TRIPs) also recognizes the “protection of undisclosed information” as being an Intellectual Property, which needs to be protected.

Article 39.3 of TRIPs Agreement clearly articulates the following:

“Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.”

Intellectual Property Rights (IPRs) mentioned in Article 39.3 of TRIPS are commonly referred to as “Data Exclusivity” in the U.S. and “Data Protection” or “Regulatory Data Protection” in the European Union (EU). These are all the very same.

RDP is an independent IPR; and should not be confused with other IPRs, such as patents:

Bringing an NCE/NME to the market involves two critical steps:

1. Discovery of NCE/NME:

The drug discovery right of the originator is protected in the form of a patent.

2. Drug development:

The innovator will require generating intensive, time consuming and expensive pre-clinical and
clinical data to meet the regulatory needs for bringing the new drug to the market. Such data
needs to be protected by the drug regulators.

It is understood that both the above steps are absolutely necessary to meet the unmet needs of the patients. The civil society gets the benefits of the new drugs only after these two steps are successfully completed.

The rationale for Regulatory Data Protection (RDP):

Irrespective of what has been indicated in Article 39.3 of TRIPS, RDP is clearly justifiable on the following grounds:

Generation of Data by the originator consists of “considerable efforts”. Submission of clinical data is a statutory regulatory requirement. Were it not for the obligation to provide these data to the Government, such data would have remained completely under control of the originator. It is, therefore, a reasonable obligation on the part of the Government as a ‘gate keeper’ to respect confidentiality of the data in terms of non-reliance and non-disclosure. Any failure by the Government to provide required protection to the data could lead to “unfair commercial use”.

Since such data are collected through various phases of clinical evaluation, involving considerable costs, time and energy, these are immensely valuable to the originator and need to be adequately protected by the drug regulators.

As these data are proprietary in nature, any access or permissibility for use of such data by the second applicant without concurrence of the originator is unfair on grounds of propriety and business ethics.

Given the imbalance between the costs to the originator of getting marketing approval for its product and the costs of the ‘copy cat’ coming to the market, the research based industry will not have adequate incentive without RDP to continue to get engaged in important R&D activities. In that scenario, newer and better drugs, particularly for untreated and under-treated medical conditions will not be available to the patients.

Without RDP, the originator of the innovative drugs would be placed at an unfair, commercial disadvantage when compared to their generic competitors, who do not incur similar costs of meeting the mandatory requirements of drug regulatory authorities for marketing approval of the drug.

The distinctiveness of the two incentives, namely, Patent Protection and Data Protection is recognized in countries which are leading in research and development in pharmaceuticals.

RDP will not affect exports of Indian pharmaceutical products to the non-regulated markets:

This is because RDP deals with marketing of products patented in India within the territory of India. RDP will in no way affect the ability of any generic manufacturer either to produce the bulk drug active or to formulate its dosage forms for exports in the non-regulated markets, as long as the product is not sold within the territory of India for which both the patent and RDP will be valid.

Disadvantages of not having RDP in India:

According to the U.S. National Institute of Health (NIH), lack of RDP in India is the primary reason why India ranks only 9th (compared to China which ranks 2nd), in funding given by NIH outside U.S.A.

An Expert Committee under the Chairmanship of Dr. R.A. Mashelkar, an eminent scientist, also highlighted significance of Regulatory Data Protection, as below:

“In order to ensure enabling environment, the regulatory division dealing with the applications concerning new drugs and clinical trials would be required to develop suitable mechanisms to ensure confidentiality of the submissions.”

RDP – The International Scenario:

A review of National Laws relating to the protection of Registration Data in the major WTO Member-States reveals that most of the countries have recognized and appreciated the role of RDP.

Although there is no uniform standard that is followed by the countries while enacting and implementing the laws related to RDP, there is however a common principle that is followed. The laws generally specify the conditions under which Regulatory Data Protection can be sought and the period for which the “originator” can enjoy the exclusivity after the marketing approval is granted in the country. The period of RDP is typically between 5 – 10 years.

As per an article titled “Complying with Article 39.3 of TRIPs… A Myth or Evolving Reality” by Dr. Prabuddha Ganguli, around sixty nations around the world including China follow RDP in their respective countries.

RDP and the generics:

Regarding the arguments that RDP provisions will act as a barrier to the development of generics, resulting in the erosion of generics market. This argument is based on invalid assumptions. The following facts will prove the irrelevance of these arguments propounded by the domestic generic lobby:

1. Data Protection refers only to new products registered/patented in India. It will not affect the generic drugs already in the market.

2. U.S.A. is an outstanding example which shows that research based industry and generic industry can co-exist, giving dual benefits of innovative medicines and cheaper copies of off-patent medicines to the general public.

3. More the patented medicines, more will be generic drugs after expiry of their patents.

4. In the U.S.A. which has a long standing Data Protection (Exclusivity) regime, the market penetration of generics is amongst the highest in the world and stands at nearly half of all the prescriptions.

5. After introduction of Hatch Waxman Act in 1984, which provided for a 5 year period of Data Protection, there has been a spurt of development of new drugs as also entry of off-patent generics into the US market.

RDP is not ‘evergreening’ :

In most of the cases, the period of patent protection and RDP will run concurrently. The ground reality will be that innovator companies will launch their products in India within as short a time gap as possible from the launch of those products anywhere in the world. The period between introduction of new drugs elsewhere and their introduction in India has been continuously shrinking. The range of such period between 1965 and 1988 was 4 years to 13 years. The period during 1990 to 1999 ranges between 0.25 year and less than 2 years.

During the debate on Data Protection it is asserted in some quarters that RDP and patents offer “double protection”. They do not, by any means. Fundamentally, the two forms of Intellectual Property are like different elements of a house which needs both a strong foundation and a roof to protect its inhabitants. RDP cannot extend the length of a patent which is a totally separate legal instrument. While patent protects the invention underlying the product, RDP protects invaluable clinical dossier submitted to the drugs regulatory authority, from unfair commercial use and disclosure. The duration of RDP, as stated above, is typically half or less of the product patent life.

Conclusions:

In my view RDP will benefit the pharmaceutical innovation eco system India, as it has done to many other countries. Hence India should implement RDP without further delay. It will be reasonable to have a provision of at least 5 years of RDP from the date of marketing approval in India, on the same lines as China.

RDP should be provided by making an appropriate amendment in Schedule Y of the Drugs & Cosmetics Act to bring India into conformity with its international legal obligations and with the practices of other members of the WTO from both the developed and developing nations of the world.

These provisions, in my view, will go a long way in sending a very positive signal to the international community as well as to our own research based pharmaceutical companies to accelerate investment in this vital sector making India emerge as a global powerhouse in pharmaceuticals, sooner than later.

By Tapan Ray

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

Regulatory Data Protection (RDP) and its need in India: The Myth versus Reality

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THE MYTH:

An attempt to delay the launch of Indian generics:

Some in India feel that Regulatory Data Protection (RDP), is a deliberate attempt by the innovator companies to delay the launch of the generic equivalent of patented products in India, as long as they possibly can.

Thus they feel that why should one re-invent the wheel? Why should the generic pharmaceutical companies be not allowed to continue with the current requirement by the Drug Controller General of India (DCGI) to establish only the ‘bio-equivalence of an innovator drug to get the marketing approval of the generic equivalent in India?

RDP will effect export in non-regulated markets:
They further argue that India currently exports its pharmaceutical products to around 50 non-regulated markets of the world. Thus the enforcement of RDP would jeopardize Indian Pharmaceutical exports in those countries affecting the economy of the country.

RDP is a non-binding clause in TRIPS:

Regarding Article 39(3) of TRIPS, which indicates protection of regulatory data against “disclosure” and “unfair-commercial use”, this group opines that this is a non-binding Article of TRIPS, neither does it specify any timeline to protect such data. Moreover, they feel, that only the “undisclosed data” may be protected and the data already “disclosed” ‘need not to be protected’.

RDP is an attempt towards “evergreening” the patent:

The proponents of this interpretation believe that RDP is just an attempt to “evergreen” a patent, extending the patent life of a New Chemical Entity (NCE) or (NME) beyond 20 years.

THE REALITY:

Just Like Patents, Regulatory Data need to be protected to encourage innovation in India:

This group feels that generation of exhaustive regulatory data entails very significant investment in terms of money, energy and time. These are very high risk investments as approximately one in 5000 molecules researched will eventually see the light of the day in the market place. It is worth noting that clinical development of an NCE/NME costs around 70%, while the cost of discovery of the same NCE/NME is around 30% of the total costs. It is estimated that the entire process of drug development from discovery to market takes an average of 10 years and costs on an average U.S.$ 1.7 Billion in the developed markets of the world.

Since such voluminous regulatory data are not only costly and time consuming but also proprietary in nature, these need to be protected by the regulators. Regulatory Data Protection (RDP), therefore, has been widely recognized as an integral part of the Intellectual Property Rights (IPR).

The agreement on Trade Related aspects of Intellectual Property Rights (TRIPs) also recognizes the “protection of undisclosed information” as being an Intellectual Property, which needs to be protected.

Article 39.3 of TRIPs Agreement clearly articulates the following:

“Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.”

Intellectual Property Rights (IPRs) mentioned in Article 39.3 of TRIPS are commonly referred to as “Data Exclusivity” in the U.S. and “Data Protection” or “Regulatory Data Protection” in the European Union (EU). These are all the very same.

RDP is an independent IPR; and should not be confused with other IPRs, such as patents:

Bringing an NCE/NME to the market involves two critical steps:

1. Discovery of NCE/NME:

The drug discovery right of the originator is protected in the form of a patent.

2. Drug development:

The innovator will require generating intensive, time consuming and expensive pre-clinical and
clinical data to meet the regulatory needs for bringing the new drug to the market. Such data
needs to be protected by the drug regulators.

It is understood that both the above steps are absolutely necessary to meet the unmet needs of the patients. The civil society gets the benefits of the new drugs only after these two steps are successfully completed.

The rationale for Regulatory Data Protection (RDP):

Irrespective of what has been indicated in Article 39.3 of TRIPS, RDP is clearly justifiable on the following grounds:

Generation of Data by the originator consists of “considerable efforts”. Submission of clinical data is a statutory regulatory requirement. Were it not for the obligation to provide these data to the Government, such data would have remained completely under control of the originator. It is, therefore, a reasonable obligation on the part of the Government as a ‘gate keeper’ to respect confidentiality of the data in terms of non-reliance and non-disclosure. Any failure by the Government to provide required protection to the data could lead to “unfair commercial use”.

Since such data are collected through various phases of clinical evaluation, involving considerable costs, time and energy, these are immensely valuable to the originator and need to be adequately protected by the drug regulators.

As these data are proprietary in nature, any access or permissibility for use of such data by the second applicant without concurrence of the originator is unfair on grounds of propriety and business ethics.

Given the imbalance between the costs to the originator of getting marketing approval for its product and the costs of the ‘copy cat’ coming to the market, the research based industry will not have adequate incentive without RDP to continue to get engaged in important R&D activities. In that scenario, newer and better drugs, particularly for untreated and under-treated medical conditions will not be available to the patients.

Without RDP, the originator of the innovative drugs would be placed at an unfair, commercial disadvantage when compared to their generic competitors, who do not incur similar costs of meeting the mandatory requirements of drug regulatory authorities for marketing approval of the drug.

The distinctiveness of the two incentives, namely, Patent Protection and Data Protection is recognized in countries which are leading in research and development in pharmaceuticals.

RDP will not affect exports of Indian pharmaceutical products to the non-regulated markets:

This is because RDP deals with marketing of products patented in India within the territory of India. RDP will in no way affect the ability of any generic manufacturer either to produce the bulk drug active or to formulate its dosage forms for exports in the non-regulated markets, as long as the product is not sold within the territory of India for which both the patent and RDP will be valid.

Disadvantages of not having RDP in India:

According to the U.S. National Institute of Health (NIH), lack of RDP in India is the primary reason why India ranks only 9th (compared to China which ranks 2nd), in funding given by NIH outside U.S.A.

An Expert Committee under the Chairmanship of Dr. R.A. Mashelkar, an eminent scientist, also highlighted significance of Regulatory Data Protection, as below:

“In order to ensure enabling environment, the regulatory division dealing with the applications concerning new drugs and clinical trials would be required to develop suitable mechanisms to ensure confidentiality of the submissions.”

RDP – The International Scenario:

A review of National Laws relating to the protection of Registration Data in the major WTO Member-States reveals that most of the countries have recognized and appreciated the role of RDP.

Although there is no uniform standard that is followed by the countries while enacting and implementing the laws related to RDP, there is however a common principle that is followed. The laws generally specify the conditions under which Regulatory Data Protection can be sought and the period for which the “originator” can enjoy the exclusivity after the marketing approval is granted in the country. The period of RDP is typically between 5 – 10 years.

As per an article titled “Complying with Article 39.3 of TRIPs… A Myth or Evolving Reality” by Dr. Prabuddha Ganguli, around sixty nations around the world including China follow RDP in their respective countries.

RDP and the generics:

Regarding the arguments that RDP provisions will act as a barrier to the development of generics, resulting in the erosion of generics market. This argument is based on invalid assumptions. The following facts will prove the irrelevance of these arguments propounded by the domestic generic lobby:

1. Data Protection refers only to new products registered/patented in India. It will not affect the generic drugs already in the market.

2. U.S.A. is an outstanding example which shows that research based industry and generic industry can co-exist, giving dual benefits of innovative medicines and cheaper copies of off-patent medicines to the general public.

3. More the patented medicines, more will be generic drugs after expiry of their patents.

4. In the U.S.A. which has a long standing Data Protection (Exclusivity) regime, the market penetration of generics is amongst the highest in the world and stands at nearly half of all the prescriptions.

5. After introduction of Hatch Waxman Act in 1984, which provided for a 5 year period of Data Protection, there has been a spurt of development of new drugs as also entry of off-patent generics into the US market.

RDP is not ‘evergreening’ :

In most of the cases, the period of patent protection and RDP will run concurrently. The ground reality will be that innovator companies will launch their products in India within as short a time gap as possible from the launch of those products anywhere in the world. The period between introduction of new drugs elsewhere and their introduction in India has been continuously shrinking. The range of such period between 1965 and 1988 was 4 years to 13 years. The period during 1990 to 1999 ranges between 0.25 year and less than 2 years.

During the debate on Data Protection it is asserted in some quarters that RDP and patents offer “double protection”. They do not, by any means. Fundamentally, the two forms of Intellectual Property are like different elements of a house which needs both a strong foundation and a roof to protect its inhabitants. RDP cannot extend the length of a patent which is a totally separate legal instrument. While patent protects the invention underlying the product, RDP protects invaluable clinical dossier submitted to the drugs regulatory authority, from unfair commercial use and disclosure. The duration of RDP, as stated above, is typically half or less of the product patent life.

Conclusions:

In my view RDP will benefit the pharmaceutical innovation eco system India, as it has done to many other countries. Hence India should implement RDP without further delay. It will be reasonable to have a provision of at least 5 years of RDP from the date of marketing approval in India, on the same lines as China.

RDP should be provided by making an appropriate amendment in Schedule Y of the Drugs & Cosmetics Act to bring India into conformity with its international legal obligations and with the practices of other members of the WTO from both the developed and developing nations of the world.

These provisions, in my view, will go a long way in sending a very positive signal to the international community as well as to our own research based pharmaceutical companies to accelerate investment in this vital sector making India emerge as a global powerhouse in pharmaceuticals, sooner than later.

By Tapan Ray

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