Do pharma and biotech investors encourage companies indulging in ‘patent thicket?’ This question recently grabbed media headlines. On April 02, 2019, one such report brought out: AbbVie investors are calling for the Chair-CEO power split, flagging the CEO’s USD 4 million bonus payout, fueled by the company’s Humira ‘patent thicket’ strategy related aggressive price hikes. It prolonged the brand’s market monopoly, blocking entries of its cheaper biosimilar equivalents.

I have discussed some related issues in this blog, previously. As the issue is gaining relevance also in the Indian context, this article will deliberate the ill-effects of ‘patent thicket’ on patient health-interest. The sole beneficiaries for the creation of this self-serving labyrinth are the manufacturers of high-priced patented drugs, as reported above. Before I proceed further, let me recapitulate what exactly is a ‘patent thicket.’

‘Patent Thicket’:

The dictionary definition of patent thicket is: ‘A group of patents in a field of technology which collectively impede a party from commercializing its own patents or products in that field.’In the current context, it means a dense web of overlapping patent rights that restrict a generic or a biosimilar drug maker from commercializing its cheaper equivalents post expiry of the original patent.

This scenario has been well-captured by the above media report, which states: “AbbVie leadership has also been accused of creating a ‘patent thicket’ in its battle to stave off biosimilar competitors to Humira.” Boehringer Ingelheim is among the few still fighting AbbVie’s ‘patent thicket’ hoping to launch its Humira biosimilar - Cyltezo, even after receiving US-FDA approval on August 29, 2017. ‘Top biosimilar makers, including Novartis’ Sandoz unit and Mylan, have settled their own Humira patent fights with deals that put off launches until 2023,’ the report indicated.

In its favor: AbbVie says, Cyltezo infringes about 70 patents the company currently holds for Humira. Whereas, ‘Boehringer’s lawyers say AbbVie’s copious patents overlapped in an attempt to exclude competitors from the market.’ Notably, in March this year, New York’s UFCW Local 1500 Welfare Fund, reportedly, also accused AbbVie of using overlapping patents to exclude biosimilars.

‘Patent thicket’ – a way of ‘evergreening’ beyond 20 years patent term:

Much concern is being raised about various ploys of especially by the drug MNC and their lobby groups – directly or under a façade, to delay entry of cheaper generic drugs for greater patient access. Mostly the following two ways are followed for patent ‘evergreening’ beyond the term of 20 years:

• ‘Incremental innovation’ of the existing patented drugs through molecular manipulation, with its clinical performance and safety profile remaining similar to the original one. As the cost benefits of such drugs are not shared with patients, cannibalizing the sales of the older molecular version with the newer one highlighting its newness, the sales revenue can be protected. With this approach, coupled with marketing muscle power with deep-pocket the impact of generic entry of the older version can almost be made redundant. For example: Omeprazole was first marketed in 1989 by AstraZeneca, under the brand name Losec (later changed to Prilosec at the behest of the US-FDA). When Prilosec’s US patent expired in April 2001, AstraZeneca introduced esomeprazole (Nexium) as a patented replacement drug. Both are nearly identical in their clinical efficacy and safety.

• ‘Patent thicket’ is yet another tool for ‘evergreening’, delaying launch of similar drugs, or resorting to ‘pay for delay’ sort of deals. As another recent report reiterates, AbbVie’s ‘patent thicket’ for Humira, has deterred other potential challengers, such as Amgen, Samsung Bioepis and most recently Mylan, each of which struck settlements with AbbVie to delay their biosimilar challenges in the United States.

Goes against patients’ health interest:

On May 09, 2018, the Biosimilars Council reported, just as generic medicines saved Americans USD 1.67 trillion in the last decade, biosimilars are poised to do the same – ‘if they aren’t thwarted by delaying tactics instituted by some pharmaceutical companies.’ Echoing similar concern, the outgoing US-FDA Commissioner Scott Gottlieb also, reportedly said, ‘some drugmakers are using unacceptable tactics such as litigation and rebate schemes to stall the entry of cheaper copies.’

‘Of the nine biosimilars the FDA has approved to date, only three have made it into the hands of patients – an alarmingly small number. Patients can’t access the six others due to barriers thrown in their way by pharmaceutical companies that want to protect their monopolies and keep prices high,’ highlights the Biosimilars Council report. Net sufferer of this self-serving ‘patent thicket’ strategy of pharma and biotech players to extend product patents beyond 20 years, are those patients who need these drugs the most – to save their lives.

Despite law, patent ‘evergreening’ still not uncommon in India:

With section (3d) on the Indian Patents Act 2005 in place, the country is expected to protect itself from patent ‘evergreening’ through ‘incremental innovation.’ This section articulates:“For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”

On this ground, Indian Patent Office (IPO) rejected Novartis’ drug Glivec (imatinib mesylate) patent application, which was ultimately upheld by the Supreme Court in 2013. Nevertheless, a study report of April 30, 2018 emphasized: ‘Though the law with regard to anti-evergreening, upheld and clarified by Indian courts, remains on the books, its application by the IPO has been far from satisfactory.’

The esteemed author of the report, after analyzing about 2,300 drug patents, granted between 2009 and 2016 concluded that evergreening practices may be rampant in India. The report pointed out, ‘the IPO could be operating with an error rate as high as 72 percent for secondary patents, despite provisions to keep them in check.’

Are these IPO’s mistakes, or due to external pressure?

As the paper, published in the January 2016 edition of the Journal of Intellectual Property Rights (JIPR) said,‘The multi-national pharma companies (MNCs) and the US-India Business Council (USIBC) have suggested in their report for elimination of Section 3 (d) so that drug patents can be granted in India for incremental improvement and modification. As per US 301 report, India is listed among countries with inadequate IP regime.’ Keeping all these aspects into consideration, the article expressed some key concerns pertaining to the impact of Section 3 (d) with special emphasis on its interpretation. Does it mean any possibility of wilting under such extraneous and high impact pressure?

A fresh pressure from drug MNC on the DCGI:

Since long drug MNCs have been attempting to delay the entry of even those generics, which are fully compliant with the Indian Patent Law 2005. One such effort was their demand for ‘patent linkage’ with the marketing approval of new generic drugs. However, it could not pass through legal scrutiny – first by the Delhi High Court in the Bayer Cipla case in 2010, and then by the Supreme Court – on the same case. The Court, reportedly, ‘noted the Indian patent system was distinct from the drug regulatory system with no linkage between them and so Bayer can’t prevent DCGI from granting marketing approval to generic versions of patented drugs.’

According to another recent media report of April 04, 2019, in a fresh endeavor ‘to delay launch of low priced generic medicine, multinational drug makers have asked the government to create a registry providing information about all drug applications pending manufacturing and marketing approval. The proposal, which is still pending with the Department of Pharmaceuticals (DoP), if accepted, could involve the generic players into expensive and time-consuming litigations, delaying early market entry of the cheaper generic or biosimilar equivalents.

To date, the health ministry has opposed the proposal, as it will be “unfair to local drug manufacturers to disclose their product strategy” and also has “the potential to substantially increase health care costs for the public.” The government further argued, “such information about product applications filed for approval are not disclosed anywhere in the world.”

India encourages new drug innovation, but not at any cost:

Despite shrill and disparaging comments of MNC lobbyists and the strong vested interests, that India’s Patent Law 2005, doesn’t encourage innovation, many independent international experts do praise the same for the following reasons:

• Does encourage new drug innovation
• Does extend product exclusivity for twenty years
• Strikes a right balance with patients’ health interest
• Indian judicial system deals with patient infringements and disputes, just as any other developed countries
• Even 14 years after the enactment of patent laws, just one compulsory license has been granted, which is much less than other countries, including the United States.

What India doesn’t legally allow is, unfettered profit making through ‘evergreening of drug patents’ – at the cost of millions of patients-lives. Nonetheless, powered by deep pockets, the pharma and biotech players are unlikely to cease from this practice, anytime soon. Only patient-awareness, and stringent counter-legal measures can contain this unfair game of drug monopoly practices – in the name of ‘encouraging innovation’.

Conclusion:

The article titled, ‘Over patented, overpriced: How Excessive Pharmaceutical Patenting is Extending Monopolies and Driving up Drug Prices’ revealed:“Top grossing drugs have on average 125 patent applications, which are filed with a strategic intent to extend the commercial monopolies far beyond the intended twenty years of protection.” It also quoted American President Donald Trump as saying, “Our patent system will reward innovation, but it will not be used as a shield to protect unfair monopolies.”

Coming back to ‘patent thicket’ and the same classic case, another report of March 20, 2019 indicated, a new class action lawsuit filed by New York’s largest grocery union has accused AbbVie of violating antitrust and consumer protection laws, which AbbVie has defended by saying that its patent strategy for Humira has protected the investments that are necessary to “advance healthcare.”

Pharma and biotech companies’ maintaining patent monopolies far beyond twenty years has significant consequences on India’s healthcare system. Only patent lawyers and experts can possibly answer whether or not the Indian Patent Law 2005 can effectively deal with the practice of ‘evergreening’ with patent thicket. Intriguingly, taking a cue from recent developments, it seems many pharma and biotech investors too, deem ‘patent thicket’ rather distracting for longer-term undiluted focus on new product development, and sustainable investors’ return.

That apart, the question also comes, whether just as ‘antitrust and consumer protection laws’ in the US, the Competition Law of India will be able to do contain such unfair practices? Otherwise, with MNC lobbyists’ renewed activities in this area, ‘patent thicket’, especially for expensive biologic drugs, will delay market-entry of their cheaper biosimilar versions in India, as well, just as what is happening in the developed nations.

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.