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Impact of Covid Vaccines’ Possible IP Waiver In India

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Just when Covid 2.0 rages in India with almost 4,000 people died in just 24 hours, scientists warn that Covid 3.0, and further waves are now ‘inevitable, reported Reuters on May 06, 2021. With hospitals running short of beds and oxygen during the onslaught of Covid 2.0, the World Health Organization (WHO) highlighted, ‘India accounted for nearly half the coronavirus cases reported worldwide last week, and a quarter of the deaths.’

The report revealed some more heartrending details: ‘Many people have died in ambulances and car parks waiting for a bed or oxygen, while morgues and crematoriums struggle to deal with a seemingly unstoppable flow of bodies.’

No visible overall improvements with ‘here and now decisions’ or maybe the lack of it, of the National Covid Management Team, is perceptible, just yet. It’s also a matter of further concern that unlike what happened during Covid 1.0, the second wave of the virus, reportedly, ‘started hitting even young adults hard – leaving countless children to fend for themselves.’

Ironically, alongside a rapid surge in infections, India witnesses a sharp decline in Covid vaccination numbers though more people are eligible. The key reasons being supply chain related problems, despite India being one of the largest vaccine producers, globally. In my last article  published in this blog, I broached on finding a possible exit to this covid 2.0 maze in India. However, this article will explore some unprecedented developments of the last week in this area. To give a perspective, let me start by exploring whether the people responsible for Covid Governance in India, grossly misjudged the situation, claiming the ‘endgame’ of Covid-19, too soon.

‘India announced its triumph over Covid-19 early’:

A third Covid-19 wave is inevitable, but the timing could not be predicted, said India’s principal scientific advisor on May 05, 2021. Intriguingly, less than two months back, the national Government announced its triumph over Covid-19. On March 08, 2021, as Covid vaccination process for senior citizens and people above 45 years with comorbidities had just commenced, the Union Health Minister claimed, ‘India is in the endgame of the novel coronavirus pandemic.’ Just about a couple of months later, it sounded akin to a note of hubris for many, which prevailed, by and large, across the nation.

Acknowledging the same, on May 04, 2021, even Uday Kotak, MD&CEO Kotak Mahindra Bank and President CII commented, ‘India announced triumph over Covid-19 early’. He further urged: “We have to do whatever it takes to save lives first, even as we battle for livelihoods. And if our healthcare capacity is currently going through its challenges, we must be ready to curtail non-essential economic activities.” The latest editorial from ‘The Lancet’ also highlighted the same.

India’s Covid 2.0 – “A self-inflicted national catastrophe” – The Lancet 

Yes. The editorial of the latest – May 08, 2021 issue of The Lancet, also reiterated so. It emphasized, ignoring warnings about the risks of super spreader events, the government allowed congregations of millions of people from across India in religious festivals, along with huge political rallies with utter disregard to Covid appropriate behavior. ‘The message that COVID-19 was essentially over also slowed the start of India’s COVID-19 vaccination campaign, which has vaccinated less than 2% of the population.’ India’s national vaccination plan soon fell apart with the government abruptly expanded vaccination to all 18 years, draining supplies, ‘and creating mass confusion and a market for vaccine doses in which states and hospital systems competed.’

The IHME estimates a staggering 1 million deaths from COVID-19 in India by Aug 01, 2021. ‘If that outcome were to happen, Modi’s Government would be responsible for presiding over a self-inflicted national catastrophe. India squandered its early successes in controlling COVID-19. Until April, the government’s COVID-19 task force had not met in months,’ The Lancet editorial revealed.

Besides, India also misjudged the complexities involved in procurement, distribution and for speedy inoculation of affordable Covid vaccines, at least, to its entire adult population. But, before delving into that area, let me highlight an interesting mismatch.

India’s vaccine shortage when Pfizer logs a record vaccine turnover during pandemic:

Two contrasting scenario surfaces – as the world is reeling under unprecedented disruptions caused by successive waves of Covid-19. Witnessing India’s unparalleled healthcare tragedy in Covid 2.0, the W.H.O director general said: “The situation in India is beyond heartbreaking.” Outlining the reason for the same a separate report commented: A ‘complete collapse’ of preventive health: How India’s 2nd COVID wave exploded.

Concomitantly, one reads news items, which bring out, ‘Pfizer eyes $26B in COVID-19 vaccine sales for the year, with $3.5B already in the bag.’ Notably, most vaccine companies received huge public funding much before Covid vaccines were rolled out. For example, ‘The New York Times’ article of July 22, 2020 came with a headline: ‘Pfizer Gets $1.95 Billion to Produce Coronavirus Vaccine by Year’s End.’

The Scientific American also reported on November 18, 2020, ‘For Billion-Dollar COVID Vaccines, Basic Government-Funded Science Laid the Groundwork.’ It added: ‘Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits.’ That’s exactly, I reckon, is the reality today.

Similarly, Moderna’s COVID-19 vaccine generated $1.73 billion in revenue during the first quarter, as compared to $3.5 billion of Pfizer’s Covid vaccine in the same quarter. Moderna now predicts its vaccine will generate $19.2 billion by year’s end. Interestingly, through its COVID-19 vaccine partnership with the U.S. government, Moderna also received nearly $1 billion in research aid. The Company is now joining a list of other vaccine players to take a supply order from the federal government.

By the same token, Serum Institute of India (SII) – the contract manufacturer of Covishield, developed and owned by Oxford University and AstraZeneca has also received initial advance funding from the governments, prior to its manufacturing.

Was India’s ‘Vaccine Maitri’ a pragmatic step?

Today, India is one such country facing the brunt of Covid vaccine shortage alongside arriving at an affordable price per dose of the same – a part of which is due to ‘unrealistic’ planning, as many experts believe.

For example, on January 20, the Indian government launched Vaccine Maitri – an ambitious program to export the two Indian-made shots – Covishield and Covaxin – to the world. On that exact date, India counted 14,112 fresh cases of Covid-19. Going by a report of May 01, 2021: ‘According to the government’s own submission before the Parliament, more shots were sent out of the country than administered to Indians as of mid-March.’ Many, therefore, wonder, whether this was a pragmatic decision that helped save lives of Indians during Covid pandemic.

An unprecedented development on vaccine IP waiver:

This is regarding IP waivers for Covid vaccines. In my last article, I wrote about it, stating, on October 02, 2021, India and South Africa had proposed at the WTO about an IP waiver for Covid-19 drugs and vaccines to resolve the issues of access and affordability for these products. It was also widely reported: ‘Richer members of the World Trade Organization (WTO) blocked a push by over 80 developing countries to waive patent rights in an effort to boost production of COVID-19 vaccines for poor nations.’

However, on May 05, 2021, a statement of the U.S. Trade Representative said, ‘as the extraordinary circumstances of the pandemic call for extraordinary measures, in its service of ending this pandemic the US also supports the IP waiver for Covid-19 vaccines, although the US administration supports IP protections generally. As expected, Big Pharma lobby groups, including PhRMA, reportedly, have strongly criticized the move.

Let me hasten to add, there is, at least, one exception in this area. Months ago, on October 8, 2020, Moderna said, ‘it won’t enforce its vaccine patents against other companies during the pandemic.’ Without specifying any names, the Company revealed, ‘other Covid-19 vaccines in development might already be using Moderna-patented technology.

The WTO process is expected to begin now, but how long will it take?

As the Reuters report dated May 06, 2021 indicated – with the U.S. backing a proposed waiver of Covid-19 vaccine IP rights, the next stop is for the World Trade Organization to hammer out a deal – a process that could take months. “At a minimum, it’s going to be a month or two,” said a former Trump White House trade official who previously worked at the U.S. trade mission to the WTO in Geneva. The waiver, if happens, could also be significantly narrower in scope and shorter in duration than the one initially proposed by India and South Africa.

The relevance of IP waiver:

Currently, only drug companies which own patents or their authorized manufacturers like SII can produce Covid vaccines. A global decision on patent waiver may encourage the patentees to share the formula and manufacturing technology, instead of reverse engineering, as is done for off-patent small molecules and some biotech drugs.  All companies with requisite resources may legally manufacture Covid vaccines, in that situation, leading to cheaper, and significantly more quantity of generic versions of Covid vaccines. This may help overcoming vaccine shortages, making the vaccines affordable, as well.

Some counter arguments and response:

As I wrote in my last article, the following three critical questions may arise in that scenario:

  • Will IP waiver help solve the immediate issues of vaccine shortages?
  • Can Covid vaccines be reverse engineered by domestic pharma industry without inventors sharing ‘Know-How’?
  • If yes, how long can it take?

The answer to the first question is – it may not help resolve the immediate crisis. But, for a medium to long term solution, there will be an emphatic yes, as Covid-19 fight is expected to be a long-haul one, as experts caution about subsequent waves of rapidly mutating new Coronavirus.

Moreover, Pfizer – BioNTech vaccine took less than a year from ‘mind to market,’ with support from all concerned. This is evident from Pfizer’s Press Release for the launch of Covid vaccine in the United States last year, on December 11, 2020. Thus, an efficient reverse engineering may also take that much time to respond to medium and long-term issues with Covid vaccines, especially in India.

Subsequent Covid-19 waves could be triggered by unpredictable compliance to Covid appropriate behavior of people. W.H.O has also warned: “When personal protective measures are being relaxed, when there are mass gatherings, when there are more contagious variants and the vaccination coverage is still low this can create a perfect storm in any country,”

Conclusion:

‘The pandemic is not a competition between companies and will not end without more-equal distribution of coronavirus vaccines,’ wrote Nature on March 30, 2021. It suggested: ‘It’s time to consider a patent reprieve for COVID vaccines.’

The world needs around 11 billion doses of Coronavirus vaccines to immunize 70% of the global population – assuming two doses per person. Interestingly, around 6 billion doses are meant for high- and upper-middle-income countries, against advance orders. Poorer nations, accounting for 80% of the global population, so far, have access to less than one-third of the available vaccines. ‘Unless manufacturing and supply can be distributed more evenly, researchers forecast that it will be at least another two years before a significant proportion of people in the lowest-income countries are vaccinated’, the paper concluded.

In this situation, I reckon, a temporary IP waiver would help in accelerating the end of the pandemic. It may not help immediately, but certainly in the foreseeable future, as discussed above. It may also call for an efficient and well thought out ‘Hub and Spoke’ distribution model. Simultaneously, of course, similar systems for raw and ancillary materials for vaccine production need to put in place to avoid intermittent shortages. 

As reported on May 08, 2021, India registered a record 4,187 Covid death with 4.01 Lakh new cases, in 24 hours. Capturing the depth of the Indian crisis, ‘India Today’ is coming out with a cover page article in its May 17 issue, with the headline – ‘Covid 2.0 – The Failed State.’ Another article terms India as the ‘Flailing state in Covid storm.’

As I reasoned above, if this unprecedented step of IP waiver for Covid vaccines is finally taken by the WTO, it will significantly help India – along with the world – may not be immediately, but certainly in the foreseeable future. Only adverse impact that the decision could possibly make, is curbing Big Pharma’s unprecedented profit on Covid vaccines, and that too, during a deadly global pandemic.

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.

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

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

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

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

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

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

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

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

A global perspective:

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

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

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

What then is its basic solution?

When the right solution eludes:             

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

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

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

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

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

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

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

The current business model leaves behind many patients:

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

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

Public outrage over high drug prices:

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

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

The industry continues chasing rainbows:

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

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

  • Lawmaker Peter Welch, who chairs the House Democratic Caucus’ task force on drug pricing, said, “The issue here is not whether drugs have some benefits … The issue is whether pharma is going to be able to kill us with their pricing power or whether we will get transparency and competition.” He added, “The campaign is all about defending their pricing power and pushing their product.”
  • Similarly, another lawmaker Sen. Chuck Grassley (R-Iowa) said, “This is [PhRMA] trying to change the subject and to try and divert people’s attention away from drug pricing. Continuing to ignore drug pricing is probably not going to work.”
  • Ameet Sarpatwari, a drug pricing policy researcher at Harvard University said, “It’s really a matter of being tone deaf in terms of thinking somehow that this is going to change public perception”

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

The situation in India:

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

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

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

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

Is the devil in the traditional pharma business model?

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

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

In pursuit of a new model:

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

  • Learn from innovation models of the IT industry: Win-Win collaborative innovation models, including ‘Open Source Drug Discovery’, if scaled up, could reduce the cost of innovation significantly and making the new innovative drugs generally affordable. Thus, larger volume sales may adequately offset a voluntary cut in the product margin, creating a multiplier effect.
  • Be a part of the solution and not the problem: Because of fiercely pushing the blatant self-serving agenda, inconveniencing many patients, the core mindset of the pharma industry is considered by many as an integral part of the main problem. While pharma industry, quite rightly, seek more market access, they need to act as a facilitator too, to improve general access to medicines, in various imaginative ways, which is, of course, possible. This will make the pharma industry to be a part of the solution to the national problem, over a period of time.
  • Walk the talk: While pharma industry speaks all right things, in terms of ethical conduct of business, at a time when both national and international media frequently expose their gross wrongdoings. This continues, unabated. Sales and marketing functions are indeed very important, but not at the cost of good corporate governance. I am aware, all compliance rules exist immaculately on paper for many companies, but the senior management officials should demonstrate that they walk the talk, giving exemplary punishment to the wrongdoers, including their peers.
  • Change the current advocacy model: The current advocacy model of the research-based pharma companies is too self-serving. For example, in India it mostly demands, which is bordering obsession, to change the IP laws of a sovereign country, when the World Trade Organization (WTO) has no problem with these, whatsoever. There is a need for them to demonstrate, sans any shade of arrogance, visible respect to any country’s general sentiment on its Patents Act, as it’s their own decision to operate in those countries. An imaginative win-win change in this area, would significantly help to create a strong bond and mutual respect with other important stakeholders.

Are senior citizens in pharma business a barrier to change?

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

In conclusion:

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

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

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

By: Tapan J. Ray 

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

Indian Patents Act To Prevail Undiluted…Finally

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

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

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

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

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

  • India’s IPR laws are quite in compliant with the TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement.
  • There is no need for apprehension in any corner of the world as to what India’s patent regime is like.

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

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

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

Another stronger assertion:

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

  • India’s IPR laws are fully compliant with international obligations under the TRIPS agreement. This includes the Patents Act, 2005, whose provisions have time and again stood the test of judicial scrutiny.
  • There is no question of permitting ‘evergreening’ of patents, or of realigning our IPR laws to comply with US laws.
  • There is no question of sacrificing our IPR laws to get support from a particular country even on food security.

A brief background:

In October 2014, almost immediately after Prime Minister Modi’s return to India from the United States, the the Department of Industrial Policy and Promotion (DIPP) formed a six-member ‘Think Tank’, chaired by Justice (Retd.) Prabha Sridevan, to draft the ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas.

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

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

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

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

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

Most recent apprehension:

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

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

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

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

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

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

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

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

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

Intriguing comment:

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

India welcomes and encourages innovation:

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

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

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

Two fundamental changes that the US is looking for:

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

  • Patentability for all types of innovation, including ‘me-too’ ones and evergreening of patents, which would delay entry of affordable generic drugs.
  • “Compulsory Licensing (CL)” provisions, other than during natural calamities.

The status today: 

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

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

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

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

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

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

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

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

  • Evidenced a significant proliferation of ‘evergreening’ pharmaceutical patents that can block generic competition and thereby limit patients’ access to medicines.
  • Found that both the nature of pharmaceutical learning and innovation and the interest of public health are best served in a framework where rigorous standards of inventive steps are used to grant patents.
  • Suggested that with the application of well-defined patentability standards, governments could avoid spending the political capital necessary to grant and sustain compulsory licenses/government use.
  • Commented, if patent applications were correctly scrutinized, there would be no need to have recourse to CL measures.

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

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

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

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

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

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

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

India shows the new IPR way:

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

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

Positive reverberations in the domestic pharma sector:

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

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

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

Concerns of some ‘Who’s Who’:

The following is just an example of such concern:

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

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

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

Conclusion:

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

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

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

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

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

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

By: Tapan J. Ray

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.

Utility Model: Would It Work In India For Pharma?

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The revised draft of India’s IPR Policy penned by the Government constituted ‘Think-Tank’ in 2014, suggests enactment of new laws, such as for ‘Utility Models’ and Trade Secrets, to fill some gaps in the country’s IPR ecosystem .

However, media reports of May 21, 2015 indicate, the Department of Industrial Policy and Promotion (DIPP) is not in favor of changing the country’s ‘Patents Law’ framework to allow grant of utility patents, as suggested by the ‘Think-Tank’.

Though comments from the other Ministries and Departments on the revised draft IPR Policy is still awaited, DIPP reportedly feels, ‘Utility Models’ being less-stringent form of intellectual Property (IP) protection, could ultimately lead to ‘ever-greening’ of patents.

A volte-face?

This development is indeed interesting because on May 13, 2011 the same DIPP uploaded in its website a Discussion Paper on “Utility Models”. Many believed at that time, it as a precursor of a new policy initiative of DIPP on Intellectual Property Rights (IPR) to encourage innovation in the country, without diluting the prevailing strict criteria for patentability. The above Discussion Paper highlighted, among others:

“…minor technical inventions which frugally use local resources in a sustainable manner need to be encouraged by providing a legal framework for their protection and commercial exploitation. Such useful, low cost and relatively simple innovations which create new mechanical devices or contribute to the optimal functioning of existing ones may have commercial value only for a limited time period, before they are replaced by other products or rendered redundant by change of technology.”

In that paper DIPP also highlighted that many countries of the world, for example; Australia, China, Japan, Germany, France, Korea and Netherlands still find the ‘Utility Model’ as an extensively used tool to foster innovation within the local industries.

We shall also touch upon this point below.

The Discussion Paper did trigger a healthy national debate on this subject at that time, though Government did not make known to the public the outcome of this public discourse.

The definition:

The World Intellectual Property Organization (WIPO) defines ‘Utility Model’ as follows:

“Utility Model is an exclusive right granted for an invention, which allows the right holder to prevent others from commercially using the protected invention, without his authorization, for a limited period of time. In its basic definition, which may vary from one country (where such protection is available) to another, a utility model is similar to a patent. In fact, utility models are sometimes referred to as petty patents or innovation patents.”

Or in other words “A utility model is similar to a patent in that it provides a monopoly right for an invention.”

However, utility models are much cheaper to obtain, the requirements for grant of a ‘Utility Model’ are usually less stringent and the term is shorter – mostly between 7 and 10 years, as against up to 20 years term of protection for a patent. 

Major differences between Utility Models and Patents:

According to WIPO, the main differences between ‘Utility Models’ and patents can be summarized as follows:

  • The requirements for acquiring a ‘Utility Model’ are less stringent than for patents. While the requirement of “novelty” is always to be met, that of “inventive step” or “non-obviousness” may be much lower or absent altogether.  In practice, protection for ‘Utility Models’ is often sought for innovations of rather incremental in character, which may not meet the patentability criteria.
  • The term of protection for ‘Utility Models’ is shorter than for patents and varies from country to country (usually between 7 and 10 years without the possibility of extension or renewal).
  • In most countries where ‘Utility Model’ protection is available, patent offices do not examine applications as to substance prior to registration. This means that the registration process is often significantly simpler and faster, taking on an average about six months.
  • ‘Utility Models’ are much cheaper to obtain and to maintain.
  • In some countries, ‘Utility Model’ protection can only be obtained for certain fields of technology and only for products but not for processes.

Countries providing ‘Utility Model’ protection:

Many countries do not grant ‘Utility Models’. However, the major countries granting ‘Utility Models’, as stated above, include: Australia, China, Japan, Germany, France, Spain and Italy.

According to WIPO, currently the countries and regions that provide ‘Utility Models’ are as follows:

Albania, Angola, Argentina, ARIPO, Armenia, Aruba, Australia, Austria, Azerbaijan, Belarus, Belize, Brazil, Bolivia, Bulgaria, Chile, China (including Hong Kong and Macau), Colombia, Costa Rica, Czech Republic, Denmark, Ecuador, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Guatemala, Honduras, Hungary, Indonesia, Ireland, Italy, Japan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Malaysia, Mexico, OAPI, Peru, Philippines, Poland, Portugal, Republic of Korea, Republic of Moldova, Russian Federation, Slovakia, Spain, Taiwan, Tajikistan, Trinidad & Tobago, Turkey, Ukraine, Uruguay and Uzbekistan.

Interestingly, ‘Utility Models are not available in the United Kingdom or the United States.

A recent allegation of ‘Utility Model’ infringement against a global pharma: 

Quite recently, in November 2014, Copenhagen headquartered Forward Pharma A/S reportedly filed a lawsuit against Biogen Idec GmbH, Biogen Idec Internaional GmbH and Biogen Idec Ltd. in the Regional Court in Dusseldorf, alleging infringement of its German ‘Utility Model’ DE 20 2005 022 112 due to Biogen Idec’s marketing of Tecfidera® in Germany.

Tecfidera® – a product containing dimethyl fumarate (DMF) as the active ingredient, is used for the treatment of Myasthenia Gravis (MS).

Forward Pharma asserted that its above ‘Utility Model’ precludes anyone from selling in Germany, without the Company’s consent, drugs with DMF as the sole active pharmaceutical ingredient for the treatment of MS at a daily dose of 480 mg.

With this lawsuit Forward Pharma did not seek to stop sales of Tecfidera® to MS patients, but rather sought damages for what the Company believes are Biogen Idec’s unlawful sales of Tecfidera® in Germany.

Although ‘Utility Models’ are registered without substantive examination, the Company reiterated its belief in the validity and enforceability of the said ‘Utility Model.’

Subsequently, on April 14, 2015 Forward Pharma A/S announced that an interference was declared by the Patent Trial and Appeal Board (PTAB) on April 13, 2015 between the Company’s patent application 11/576,871 (the “’871 patent application”) and Biogen’s issued patent 8,399,514 (the “’514 patent”).

The PTAB reportedly designated Forward Pharma A/S as the “Senior Party” in the interference based on the Company’s earlier patent application filing date.

Would ‘Utility Model’ be useful in pharma?

Utility Models (UM) are considered particularly suited for SMEs that make “minor” improvements to, and adaptations of, existing products. It is worth noting that UMs are primarily used for mechanical innovations.

However, in India, the ‘Utility Model’ concept in pharma would be directly conflicting with the intent and spirit of the section 3(d) of the Patents Act 2005 of the country, which clearly stipulates that mere discovery of a new form of a known substance which does not result in the enhancement of the known ‘clinical’ 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, is not patentable.

Therefore, section 3(d) of the Indian Patents Act 2005, is considered as one of the most important safeguards against “evergreening” of patents, usually done through alleged “molecular manipulation or tweaking”, that delays entry of affordable generic equivalents, adversely impacting the public health interest.

In that sense, enactment of a new law granting protection to pharma ‘Utility Models’ in India could seriously jeopardize both short and long term health interests of the patients, in general.

This is primarily because, being denied of a 20 year product patent under section 3(d), the same company would then be eligible to apply and may also probably get a monopoly status for that molecule, though for a shorter term with ‘Utility Models’.It would obviously happen at the cost of quicker entry of equivalent affordable generics.

Conclusion: 

Considering all these, and having witnessed a serious allegation of a ‘Utility Model’ (which goes through no more than a liberal regulatory scrutiny) infringement, against a major patented pharma product that passed through the acid test of stringent and cost intensive regulatory requirements, it appears that ‘Utility Models’ need to be excluded, especially for pharmaceuticals in India.

This is purely for the sake of patients’ interest, at least on the following two counts:

  • All new/novel drugs, without any compromise whatsoever, should pass through the stringent acid test of the drug regulatory requirements for requisite efficacy, safety and quality standards.
  • ‘Evergreening’ of patents, under any garb, delaying entry of affordable equivalent cheaper generics, should not be encouraged in the country.

Thus, in my view, Indian Government should continue to remain firm with its bold stance on the relevance of section 3(d) of the Indian Patents Act. Any possibility of its dilution by a grant of market monopoly, though for a much shorter period, covering incremental innovations that do not conform to the country’s IP laws, must be openly discouraged with robust reasons.

In that sense, the flag raised by the DIPP on the intriguing recommendation of the IPR Policy ‘Think Tank’ for enacting new laws in India for ‘Utility Model’, appears to be pragmatic and far sighted, specifically in the context of pharmaceuticals.

By: Tapan J. Ray

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

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

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

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

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

A brief overview:

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

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

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

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

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

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

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

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

Arguments in favor of ‘Data Exclusivity’:

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

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

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

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

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

Arguments suspecting the intent of ‘Data Exclusivity’:

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

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

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

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

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

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

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

TRIPS Agreement talks about DP, but not DE:

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

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

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

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

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

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

What is ‘TRIPS Plus’?

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

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

Some common examples of ‘TRIPS Plus’ provisions:

Common examples of ‘TRIPS Plus’ provisions could include:

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

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

- Delaying the entry of generics

Is ‘Data Protection’ an IPR issue?

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

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

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

Conclusion:

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

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

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

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

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

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

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

By: Tapan J. Ray

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

 

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

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

Special 301 Report and OCR – A brief Background:

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

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

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

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

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

The Deadlines for written submissions were as follows:

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

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

India’s earlier response to 2014 Special 301 Report:

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

The issue was raised during PM’s US visit:

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

The Indo-US joint statement addresses remedial measures:

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

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

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

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

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

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

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

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

A fresh hurdle in the normalization process:

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

What does US want?

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

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

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

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

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

Global healthcare NGOs strongly reacted:

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

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

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

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

Under US bullying, is India developing cold feet?

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

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

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

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

A Superficial and baseless interpretation:

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

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

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

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

Conclusion:

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

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

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

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

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

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

By: Tapan J. Ray

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.

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

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

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

The backdrop:

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

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

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

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

  • To urge the US to challenge India in the WTO dispute settlement body and test whether they are indeed right.
  • Nine years have elapsed since the Indian law came into force; and, while bitterly complaining about its flaws, the USTR has not dared challenge it in the WTO. Nor would it do so now. Why?
  • There is, at best, a minuscule chance that the USTR will win the case.
  • Against this, it must weigh the near certainty of losing the case and the cost associated with such a loss.
  • Once the Indian law officially passes muster with the WTO, the USTR and pharmaceutical lobbies will no longer be able to maintain the fiction that India violates its WTO obligations.
  • Even more importantly, it will open the floodgates to the adoption of the flexibility provisions of the Indian law by other countries.
  • Activists may begin to demand similar flexibilities even within the US laws.

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

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

Examples of some global and local views:

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

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

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

  • Maruti Suzuki, India’s largest car manufacturer, aircraft maker Boeing, global pharma major Abbott and technology leader Honeywell have reportedly just not supported India’s IP regime, but have strongly voiced that IPR regime of India is “very strong” and at par with international standards.
  • The Chairman of the Indian pharma major – Wockhardt also echoes the above sentiment by articulating, “I think Indian government should stay firm on the Patents Act, which we have agreed.”
  • Other domestic pharma trade bodies and stakeholder groups in India expect similar action from the ‘Modi Government’.

Who are against Indian IP regime?

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

Recent stand of India on unilateral US measures:

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

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

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

The Indo-US working group on IP:

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

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

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

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

IP experts’ expressed concerns even in the US:

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

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

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

Professor Baker further said:

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

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

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

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

Has India conceded to American bullying?

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

No change in India’s position on patents:

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

  • There has been no change in India’s stated position on Intellectual Property Rights (IPR).
  • India has reaffirmed that the IPR legal regime in India is fully TRIPS-compliant.
  • A bilateral Innovation and Creativity Focus Group already exists in the Trade Policy Forum (TPF) since 2010. Any IP related issues have to be discussed by the United States only in the TPF. This group consults each other no less than twice a year on improving intellectual property rights protection and enforcement, enhancing awareness of intellectual property rights, fostering innovation and creativity, and increasing collaboration between American and Indian innovators.
  • The Indo-US joint statement issued now merely reiterates whatever has existed in the earlier Trade Policy Forum. IPR issues are critical for both the countries and India has been repeatedly raising the issue of copyright piracy and misappropriation of traditional knowledge with the US.
  • The US agreeing to discuss IPR issues through the bilateral mechanism of the Trade Policy forum is in fact a re-affirmation of India’s stand that issues need bilateral discussion and not unilateral action. The statement on the IPR issue will only strengthen the bilateral institutional mechanism.

Conclusion:

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

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

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

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

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

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

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

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

By: Tapan J. Ray

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.