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Pharma Leadership Challenge In Post Covid Paradigm

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Bringing a long cherished relief to many, on September 15, 2022, the World Health Organization said, ‘we can see the Finish Line’ for the COVID-19 pandemic but it’s not over yet’. As I see today, several things are changing pretty fast in this scenario. Such as, not so long ago – on September 27, 2021, the same global health organization predicted differently: ‘World Will Live with COVID for Foreseeable Future.’ It further highlighted “It is dangerous to assume that omicron will be the last variant, or that we are in the endgame. On the contrary, globally the conditions are ideal for more variants to emerge.” The Wall Street Journal also reported on September 18, 2022 that the US President Joe Biden too  feels, ‘Covid-19 pandemic was over’ in the United States.

Be that as it may, I reckon, the world is not going to replicate to the pre-Covid mode of working, any longer. The Covid-19 pandemic has clearly made some impactful changes in the most work scenario, across the world. This has been revealed by several recent studies. With this perspective, in this article, I shall dwell on the challenges that the pharma leadership teams will face or are already facing, as the world shifts towards the post Covid paradigm.

Four critical areas for change:

To illustrate this point, I will focus on just three critical areas for pharma players, as follows:

  1. No going back to the pre-Covid mode of working
  2. Create a more employee focused organization for future success
  3. Determine the right size of digitally savvy field force in the new paradigm 
  4. Increase online share of voice in represented therapy areas and identify pharma’s digital world opinion leaders.

Why no going back to the pre-Covid mode of working:

With the onslaught of the Covid-19 pandemic on people’s lives and livelihoods fast receding, the need for some critical changes in several areas of pharma business, is now being felt by some forward looking astute pharma leadership teams. Recent studies, such as, the Gartner paper of June 16, 2022, among others, vindicate ushering-in some of the following changes in workplaces:

  • Ongoing changes in the way people work have transformed employees’ relationship, and their expectations of work.
  • Hybrid work could be a great opportunity, particularly for diverse talent..

Another article in this regard, published in the Harvard Business Review on January 13, 2022, capture 11 trends that will shape the work, in general, from 2022 and beyond. When I put some of these in the pharma space, it may include the following:

  • Employee turnover will continue to increase, as hybrid and remote work becomes the norm for knowledge workers in pharma companies.
  • Many repeated managerial tasks at various levels, will be automated, creating greater space for them to build more human relationships with their peer group and direct reports.
  • The tools used for working remotely are also being used to measure and improve employee performance on an ongoing basis.
  • The complexity of managing a hybrid workforce may drive some employers to evaluate a ‘return to the office’ with its pitfalls and benefits.

Thus, creating an employee focused organization becomes critical.

Creating an employee focused organization will be critical:

In the current scenario, the importance of being able to afford employees maximum flexibility, adapting and flexing to their individual circumstances and needs, is increasing manifold. This, has also come out very clearly in a number of studies, including one paper of the Healthcare Consulting Group (HCG), as reported on July 25, 2022.

Thus, nurturing employees’ desire for personal and professional growth, besides motivating them with a strong sense of purpose to their work, has become foundational to being an attractive workplace, more than ever before.

Is the pharma industry right-sizing the digitally savvy field force?

One can pick up several signals in this direction from what is happening, as the industry is opening-up with a rapidly declining onslaught of the Covid-19 pandemic. Various studies vindicate the intent of field staff reduction by the pharma industry. Today’s environment requires a digitally savvy field force of optimal size, which may vary from company to company.

For example, the article published in the Reuters Events Pharma on May 5, 2022, in this regard, elucidated “While Reuters Events Pharma’s own recent polling of the industry suggests a moderate reduction in numbers over the next couple of years, others see signs of more dramatic change.”

Many pharma players are now pondering – during Covid pandemic when companies were making so many less face-to-face calls, sales were OK. Now, when the intensity of the pandemic is receding, do they need the previous sales force numbers to make more such calls?

The general feeling appears to be that the old practices aren’t as productive as they were before, in the changing scenario. Thus, the paper underscored: ‘So with the largest players are already thinking about how to do more with fewer boots on the ground, how do they go about it?’ It concluded by saying: ‘No one is saying it is easy then, but the imperative for change is clear.”

Pharma customers’ online engagement is increasing with a low share of voice of companies:

This is yet another critical area of change where drug industry needs to strengthen its online voice. Several studies indicate that even a tiny part of most pharma companies’ online conversation about their represented disease and therapy areas doesn’t get captured in Google search. For example, yet another recent paper on this subject, published in the Reuters Events Pharma on July 05, 2022, confirms this point.

The article highlights: ‘Around 80% of patients Google for a recommended or newly prescribed medication. And doctors routinely use search engines too – to stay up to date, to verify assumptions and so on. Indeed, it may be no exaggeration to say that the answers found online are possibly the biggest influence on patients and HCPs today. Understanding their real-world digital information experience is, therefore, critical to identifying the content influencing their behavior.’

In today’s world, what these customers see and hear via search engines may shock many, the author emphasized. The study also reveals, despite many pharma companies’ investment in evidence-based, balanced, and accessible content designed for HCPs and patients, this is often buried far out of reach from the billion-plus health-related questions being asked of Google each day. ‘Pharma’s online voice often simply isn’t cutting through,’ it concluded.

What needs to be addressed soon in this area:

Each pharma marketer may wish to ascertain through data-based studies, which voices are dominating these conversations. And also, the nature and quality of the company’s own digital conversation and its share of voice. This is, besides getting to know who the digital opinion leaders are. Then, the task will be to find out ways to work with these people and share the company releases with them, requesting for their inputs, if any.

Conclusion:

The experience of the Covid pandemic and lockdowns has changed work patterns in many industries from what those were in the pre-Covid days. The drug industry is no exception. According to recent studies, two out of every five workers have either switched jobs or are actively looking for another that will fit into their working needs better, and with some remote work. This trend, being a common expectation, is gaining ground.

Thus, making an employee centric organization is now more important than ever before. Bringing together the best of remote working and office locations, as centers of excellence for team building, learning and innovation, is emerging as a central part of the pharma leadership challenge, as an HCG study, reportedly, also points out. It is generally believed that employees ‘who feel connected to purpose at work are more productive and more likely to stay.’ In tandem, pharma leadership teams also would require leaving a lasting impact on everyone’s work, which will be more tangible to them.

Alongside, as several contemporary studies indicate, and I also wrote in this blog on April 29, 2019 – ‘Adopt A Hybrid Business Model For Better Sales – Not A large Field Force,’ each company’s field force number also require a fresh look now with a focus on digitally savvy individuals. Another reason being pharma customers’ online engagement is increasing fast where most companies have a very low share of voice, as the search engine reveals. Consequently, identifying, partnering and in-depthunderstanding of key digital opinion leaders has become critical in creating a digital content that will influence the customer behavior. As reported on September 26, 2022, pharma major Sanofi, apparently has taken a major step in this direction.

From this perspective, it appears that the pharma leadership teams have a task cut out for them to effectively respond to the challenges of change in the post Covid paradigm – in search of pharma business excellence.

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.

Why MNC Pharma Still Moans Over Indian IP Ecosystem?

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Improving patient access to expensive drugs, paving the way for entry of their cheaper generic equivalents, post patent expiry, and avoiding evergreening, is assuming priority a priority focus area in many countries. The United States is no exception, in this area. The Keynote Address of Scott Gottlieb, Commissioner of Food and Drug at the 2018 Food and Drug Law Institute Annual Conference inWashington, DC by, on May 3, 2018, confirms this. Where, in sharp contrast with what the MNC Pharma players and their trade associations propagated, the US-FDA commissioner himself admitted by saying, “Let’s face it. Right now, we don’t have a truly free market when it comes to drug pricing, and in too many cases, that’s driving prices to unaffordable levels for some patients.”

Does US talk differently outside the country?

At least, it appears so to many. For example, in April 2018, the Office of the United States Trade Representative (USTR) released its 2018 Special 301 Report. In this exercise, the USPTO names the country’s trading partners for not adequately protecting and enforcing Intellectual Property (IP) rights or otherwise deny market access to U.S. innovators that rely on the protection of their IP rights.’ Accordingly, U.S. trading partners are asked to address IP-related challenges, with a special focus on the countries identified on the Watch List (WL) and Priority Watch List (PWL).

In 2018, just as the past years, India continues to feature, along with 11 other countries, on the PWL, for the so called longstanding challenges in its IP framework and lack of sufficient measurable improvements that have negatively affected U.S. right holders over the past year.

From Patient access to affordable drugs to Market access for Expensive Drugs: 

Curiously, the USTR Report highlights its concerns not just related to IP, but also on market access barriers for patented drugs and medical devices, irrespective of a country’s socioeconomic compulsion. Nevertheless, comparing it to what the US-FDA Commissioner articulated above, one gets an impression, while the US priority is improving patient access to affordable drugs for Americans, it changes to supporting MNC pharma to improve market access for expensive patented drugs, outside its shores.

Insisting others to improve global IP Index while the same for the US slides:

In the context of the 2018 report, the U.S. Trade Representative, reportedly said, “the ideas and creativity of American entrepreneurs’ fuel economic growth and employ millions of hardworking Americans.” However, on a closer look at the U.S. Chamber of Commerce’s annual Global IP Index for 2018, a contrasting fact surfaces, quite clearly. It shows, America, which once was at the very top of the overall IP Index score, is no longer so – in 2018, the world rank of the US in offering patent protection to innovators, dropped to 12thposition from its 10thglobal ranking in 2017. Does it mean, what the US is asking its trading partners to follow, it is unable to hold its own ground against similar parameters, any longer.

Should IP laws ignore country’s socioeconomic reality? 

MNC Pharma often articulated, it doesn’t generally fall within its areas of concern, and is the Government responsibility. However, an affirmative answer, echoes from many independent sources on this issue. No wonder, some astute and credible voices, such as an article titled “U.S. IP Policy Spins Out of Control in the 2018 Special 301 Report”, published by the Electronic Frontier Foundation on May 01, 2018, termed 2018 Special 301 Report – ‘A Tired, Repetitive Report.’ It reiterates in no ambiguous term: ‘The report maintains the line that there is only one adequate and effective level of IP protection and enforcement that every country should adhere to, regardless of its social and economic circumstances or its international legal obligations.

The ever-expanding MNC Pharma list of concerns on Indian IP laws:

The areas of MNC Pharma concern, related to Indian IP laws, continues to grow even in 2018. The letter dated February 8, 2018 of the Intellectual Property Owners Association, Washington, DC to the USTR, makes these areas rather clear. I shall quote below some major pharma related ones, from this ever-expanding list:

  • Additional Patentability Criteria – section 3 (d): The law makes it difficult for them to secure patent protection for certain types of pharma inventions.
  • TADF (Technology Acquisition and Development Fund)is empowered to request Compulsory Licensing (CL) from the Government:Section 4.4 of India’s National Manufacturing Policy discusses the use of CL to help domestic companies access the latest patented green technology.This helps in situations when a patent holder is unwilling to license, either at all or “at reasonable rates,” or when an invention is not being “worked” within India.
  • India’s National Competition Policyrequires IP owners to grant access to “essential facilities” on “agreed and nondiscriminatory terms” without reservation. They are not comfortable with it.
  • Regulatory Data Protection: The Indian Regulatory Authority relies on test data submitted by originators to another country when granting marketing approval to follow-on pharma products. It discourages them to develop new medicines that could meet unmet medical needs.
  • Requirement of local working of patents: The Controller of Patents is empowered to require patent holders and any licensees to provide details on how the invention is being worked in India. Statements of the Working, (Form 27),must be provided annually.Failure to provide the requested information is punishable by fine or imprisonment. It makes pharma patent holders facing the risk of CL, if they fail to “work” their inventions in India within three years of the respective patent grant.
  • Disclosure of Foreign Filings: Section 8 of India’s Patent Act requires disclosure and regular updates on foreign applications that are substantially “the same or substantially the same invention.” They feel it is irrelevant today.

Pharma MNCs’ self-serving tirade is insensitive to Indian patient interest:

Continuing its tirade against some developed and developing countries, such as India, the US drug manufacturers lobby group – Pharmaceutical Research and Manufacturers of America (PhRMA) has urged the office of the US Trade Representative (USTR) to take immediate action to address serious market access and intellectual property (IP) barriers in 19 overseas markets, including India, reports reported The Pharma Letter on February 28, 2018. It will be interesting to watch and note the level active and passive participation of India based stakeholders of this powerful US lobby group, as well.

Government of India holds its ground… but the saga continues:

India Government’s stand in this regard, including 2018 Special 301 Report, has been well articulated in its report released on January 24, 2018, titled “Intellectual Property Rights Regime in India – An Overview”, released by the Department of Industrial Policy and Promotion Ministry of Commerce and Industry (DIPP). The paper also includes asummary of some of the main recommendations, as captured in the September 2016 Report of the High-Level Panel on Access to Medicines, constituted by the Secretary-General Ban Ki-Moon of the United Nations in November 2015.  Some of these observations are as follows:

  • WTO members must make full use of the TRIPS flexibilities as confirmed by the Doha Declaration to promote access to health technologies when necessary.
  • WTO members should make full use of the policy space available in Article 27 of the TRIPS agreement by adopting and applying rigorous definitions of invention and patentability that are in the interests of public health of the country and its inhabitants. This includes amending laws to curtail the evergreening of patents and awarding patents only when genuine innovation has occurred.
  • Governments should adopt and implement legislation that facilitates the issuance of Compulsory Licenses (CL). The use of CL should be based on the provisions found in the Doha Declaration and the grounds for the issuance left to the discretion of the governments.
  • WTO members should revise the paragraph 6 decision in order to find a solution that enables a swift and expedient export of pharmaceutical products produced under compulsory license.
  • Governments and the private sector must refrain from explicit or implicit threats, tactics or strategies that undermine the right of WTO Members to use TRIPS flexibilities.
  • Governments engaged in bilateral and regional trade and investment treaties should ensure that these agreements do not include provisions that interfere with their obligations to fulfill the rights to health.

The DIPP report includes two important quotes, among several others, as follows:

Joseph Stiglitz, Nobel Prize for Economics (2001) – an American Citizen:

-       “If patent rights are too strong and maintained for too long, they prevent access to knowledge, the most important input in the innovation process. In the US, there is growing recognition that the balance has been too far tilted towards patent protection in general (not just in medicine).”

-       “Greater IP protection for medicines would, we fear, limit access to life-saving drugs and seriously undermine the very capable indigenous generics industry that has been critical for people’s well-being in not only India but other developing countries as well”.

Bernie Sanders, an American Citizen and Senior U.S. Senator:

-      “Access to health care is a human right, and that includes access to safe and affordable prescription drugs. It is time to enact prescription drug policies that work for everyone, not just the CEOs of the pharmaceutical industry.”

-      “Healthcare must be recognized as a right, not a privilege. Every man, woman and child in our country should be able to access the health care they need regardless of their income.”

Conclusion:

Why is then this orchestrated moaning and accompanying pressure for making Indian IP laws more stringent, which apparently continues under the façade of ‘innovation at risk’, which isn’t so – in any case. But, cleverly marketed high priced ‘me too’ drugs with molecular tweaking do impact patient access. So is the practice of delaying off-patent generic drugs entry, surreptitiously. Instead, why not encourage Voluntary Licensing (VL) of patented drugs against a mutually agreed fee, for achieving greater market access to the developing countries, like India?

Whatever intense advocacy is done by the vested interests to change Indian patent laws in favor of MNC pharma, the intense efforts so far, I reckon, have been akin to running on a treadmill – without moving an inch from where they were, since and even prior to 2005. The moaning of MNC Pharma on the Indian IP ecosystem, as I see it, will continue, as no Indian Government will wish to take any risk in this area. It appears irreversible and is likely to remain so, for a long time to come. The time demands from all concerned to be part of the solution, and not continue to be a part of the problem, especially by trying to tamper with the IP ecosystem 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.

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

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

Launch of a generic equivalent:

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

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

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

- Section 66 of the Indian Patents Act:

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

- Section 92 of the Indian Patents Act:

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

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

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

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

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

(i) A circumstance of national emergency; or

(ii) A circumstance of extreme urgency; or

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

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

Two key reasons:

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

Lack of inventive steps and ‘evergreening’ of patents:

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

Lack of working of the patents:

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

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

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

Abysmally low drug access to Indian patients:

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

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

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

Increasing incidence of COPD in India:

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

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

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

Importance of Indacaterol in COPD treatment:

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

Strong arguments make the case interesting:

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

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

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

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

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

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

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

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

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

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

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

The ‘Public Notice’ also indicated that:

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

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

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

Conclusion:

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

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

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

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

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

By: Tapan J. Ray

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

 

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.

Indian Patent office (IPO) asks for details of ‘working of patents’ in India – does it herald the beginning of a new chapter in the IPR regime of the country or it could trigger another raging debate

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A Public Notice dated 24/12/2009 issued by the Controller General of Patents, Design & Trade Marks, directing all Patentees and Licensees to furnish information in Form No.27 on ‘Working of Patents’ as prescribed under Section 146 of the Patents Act (as amended) read with Rule 131 of the Patents Rule 2003 ( as amended). The notice also draws attention to penalty provisions in the Patent Act, in case of non-submission of the aforesaid information.The Last date for filing the information is March 31, 2010. Only history will tell us about the possible future impact of this notification.Why is this information needed by the IPO?

Indian Patent Law specifies a provision for submission of information in Form 27 regarding the details of ‘working of a patent’ granted in India, which is a statutory requirement.

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

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

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

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

NB:

• A fine of up to (USD $25,000 may be levied for not submitting or refusing to submit the required information by the IPO.
• Providing false information is a punishable offence attracting imprisonment of up to 6 months and/or a fine.

What would amount to ‘Local Working of Patent’ in India?

Obviously, the question will arise what then would constitute ‘working of patent’ in the country. It is generally believed that ‘commercial exploitation’ of patented products in India will mean local ‘working of patent’ in the country.

This is still a controversial issue as some experts claim that ‘local working of patent’ can be established only through local manufacturing and thus importation of such products will not be considered as ‘local working of patent’ in India.

However, other groups of experts opine, as a signatory of article 21 (1) of TRIPS, India is under clear obligation to accept importation of a locally patented product as ‘local working of patent’.

How affordable is affordable?

Besides, ‘local working of patent’ issue, section 84.1 of the patent Act 2005 under ‘Compulsory licenses’ says:

“At any time after the expiration of three years from the date of the (grant) of a 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 have not been satisfied, or
b. that the patented invention is not available to the public at a reasonably affordable price, or
c. that the patented invention is not worked in the territory of India.”

The question, therefore, will arise, who will determine whether a patented product is available to the public at a reasonably affordable price or not? Moreover, what will be the measure, formula or yard to stick to decide reasonably affordable price? The next question could be – reasonably affordable price for whom … for the rich minority… or for around 300 million middle class population of the country… or for another 713 million lower middle class or poorer section of the society?

How ‘affordable’ then will be considered as ‘affordable’ in such cases?

Conclusion:

Whatever may be the case, it would be interesting to know, how the Indian patent Office (IPO) would deal with these details. In any case, such information will not remain a secret. ‘The Right to Information Act’ will help ferret all these details out in the open.

Thus, when the ‘moment of truth’ comes, one will be quite curious to note how the proponents of ‘compulsory licensing (CL)’ would try to push their envelope hard enough on this score to establish their view points… And on the other hand how would the innovator companies establish that the price is indeed a function of the value that the product would offer… and in that process would gear themselves up with relevant and credible, possibly ‘Health Technology Assessment (HTA)’ details to establish the price premium of patented products in India to meet the ‘unmet needs of the ailing patients.’

Striking a right balance in this matter by the IPO between rewarding fruits of expensive, risky and time consuming innovation, on the one hand, and help improving access to affordable modern medicines to a vast majority of the population of the country, on the other, will indeed be a daunting task.

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.

Provision for Compulsory Licensing (CL) in India – some issues still need to be addressed.

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Patent law systems provide for a provision for granting of compulsory licenses in a number of circumstances. Article 5A(2) of The Paris Convention, 1883 indicates that each contracting State may take legislative measures for the grant of compulsory licenses and reads as follows:“Each country of the Union shall have the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent, for example, failure to work.”TRIPS agreement also contains important public health safeguards provisions to allow countries to override TRIPS requirements by engaging in compulsory licensing under certain situations and circumstances. Globally all patent systems comply with the requirements of TRIPS.

Doha declaration:

Doha Declaration gives WTO member-countries the right to grant compulsory licences (CL) and the right to decide on the reasons upon which such licences are to be granted. The declaration also states that the TRIPS Agreement should be interpreted and implemented by the member-countries in a manner to protect public health and to promote access to medicines for all.

“Safeguards provision” in India:

The Indian Patent Act 2005 bestows enough power to the Controller General of Patents, Trademarks and Designs of India to issue compulsory licenses (CL) under following different sections of the Act:

1. Section 84:

This section prevents the abuse of patent as a monopoly and states that at any time after the expiration of three years from the date of grant of a patent, any interested person may make an application to the Indian Patent Office (IPO) for grant of compulsory licence on any of the following grounds:

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

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

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

Section 6 of section 84 states that in considering the application filed under this section, the controller shall take into account the following:

(i) The nature of the invention, the time which has elapsed since the sealing of the patent and the measures already taken by the patent or licensee to make full use of the invention;

(ii) The ability of the applicant to work the invention to the public advantage;

(iii) The capacity of the applicant to undertake the risk in providing capital and working the invention, if the application is granted;

(iv) Whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and conditions and such efforts have not been successful within a reasonable period as the Controller may deem fit:

Provided that this clause shall not be applicable in case of national emergencies or other circumstances of extreme urgency or in case of public non-commercial use or on establishment of a ground of anti-competitive practices adopted by the patentee.

Terms and conditions of CL will be determined by the Controller under section 90.

2. Sections 92 (1) and 92 (3):

These sections enable the Central Government to deal with circumstances of national emergency or circumstance of extreme urgency or in case of public non-commercial use by issuing CL.

3. Section 92 A:

This part enables grant of CL for export of patented pharmaceutical products in certain exceptional circumstances to any country having insufficient or no manufacturing capacity for the concerned product to address public health problems.

Some loose knots:

Some believe that there are still some loose knots in the CL provisions in India, which need to be tightened, immediately.

Granting CL for a Biopharmaceutical product could be an issue:

It will not be very easy to grant CL for a biopharmaceutical product as the conditions in which biopharmaceuticals are produced largely define the final product and its manufacturing process defines the product quality. Any alteration to the manufacturing process may result in a completely different product.

Therefore following are the main issues, which need to be urgently addressed:

• Small changes in the manufacture of biopharmaceutical and biosimilar medicinal products can dramatically affect the safety and efficacy of the therapeutic molecule.

• The very nature of a biologic means that it is practically impossible for two different manufacturers to manufacture two identical biopharmaceuticals if identical host expression systems, processes and equivalent technologies are not used. This has to be demonstrated in an extensive comparability program. Therefore a generic biopharmaceutical cannot possibly exist.

• Substitution issues:

By contrasts with the situation applicable for generic chemical entities, biosimilar medicines can be “similar” but not “identical” to the innovator reference products. The “similar, but not identical” nature of biosimilar medicines means that substitution of the innovator product with a biosimilar product could have clinical consequences as patients could respond differently to the two products. To guarantee the efficacy and safety of biosimilar products, these products should only be approved following the submission of appropriate data generated with the biosimilar drug.

• Currently there are no published clear Indian guidelines for the approval of biosimilar drugs which will ensure the approval of efficacious and safe biosimilar drugs.

Some apprehensions on CL in India need to be addressed:

Some apprehensions have been expressed on possible misuse of CL and representations made to the government to address the following issues urgently. Tarceva and Stutent cases involving Nepal will probably justify such apprehensions:

o As the entire concept is based on “Working of Patents” in India, the term “Working of Patents” needs to be defined explicitly.

o Issuance of CL to be restricted to national emergency, extreme urgency and public non-commercial use

o Provisions in (Sec. 84 [7]) needs to be suitably amended that provide grounds for triggering CL by competitors for commercial benefits.

o Safeguards enshrined in the Aug 30 decision (Motta-Menon text) is to be provided for exports under Section 92A of the Indian Patents Act 2005, corresponding to Para 6 of the declaration on the TRIPS Agreement

Is paying royalty to patent holder an acceptable solution to this issue?

Many feel that this question totally ignores the right of an innovator to protect his/her innovation, which is the outcome of a painstaking, long, costly and risky R&D process. Such protection is granted to an innovator against disclosure of the data generated for the innovation to the patent office for public knowledge at large through grant of a patent for a specific time period. During this period the innovator is the exclusive owner of the innovation. The provision of CL can be invoked during this period, as stated above, for some very specific and extra-ordinary situation.

Such extra-ordinary situation, as and when will arise be addressed by the government based purely on the merits of the cases. Carte blanche permission by any authority allowing use of an innovator’s product during its patent life against a royalty payment, without innovators wish, is believed to be against the letter and spirit of Indian Patents Act 2005.

Conclusion:

In Indian Patents Act 2005, the provisions of CL should maintain a fine balance between the critical need of innovation by the pharmaceutical companies and its reach to the users to meet their unmet needs. For a country like India, CL is probably the most appropriate safeguard against potential abuse of monopoly by the patentees in case of national emergencies and to address critical public health issues.

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.