Gilead: Caught Between A Rock And A Hard Place In India

I had mentioned in my blog post of August 4, 2014, titled “Hepatitis C: A Silent, Deadly Disease: Treatment beyond reach of Most Indians” that in line with Gilead’s past approach to its HIV medicines, the company would offer to license production of sofosbuvir (brand name Sovaldi) to a number of rival low-cost Indian generic drug companies. They will be offered manufacturing knowhow, allowed to source and competitively price the product at whatever level they choose.

Sovaldi (sofosbuvir) is a once-a-day patented drug of Gilead for cure of chronic hepatitis C infection in most patients. Sovaldi has been priced at Rs 60,000 (US$ 1,000) per tablet in the developed markets with a three-month course costing Rs1.8 Crore (US$ 84,000), when it reportedly costs around U$130 to manufacture a tablet. This treatment cost is being considered very high even for many Americans and Europeans.

Gilead has also announced that it has set a minimum threshold price for Sovaldi of US$ 300 (Rs.18,000) a bottle, enough for a month. With three months typically required for a full course and taking into account the currently approved combination with interferon, the total cost of Sovaldi per patient would be about US$ 900 (Rs.54,000) for a complete treatment against its usual price of US$ 84,000 (Rs1.8 Crore). The company would offer this price to at least 80 countries.

Breaking-news in India:

On September 15, 2014, International media reported that Cipla, Ranbaxy, Strides Arcolab, Mylan, Cadila Healthcare, Hetero labs and Sequent Scientific are likely to sign in-licensing agreements with Gilead to sell low cost versions of Sovaldi in India.

It was also reported that these Indian generic manufacturers would be free to decide their own prices for sofosbuvir, ‘without any mandated floor price’.

Indian companies would require paying 7 per cent of their revenues as royalty to Gilead, which, in turn would ensure full technology transfer to them to produce both the Active Pharmaceutical Ingredients (API) and finished formulations. The generic version of Sovaldi is likely to be available in India in the second or third quarter of 2015, at the earliest.

Another reason of Gilead’s selecting the Indian generic manufacturers could possibly be, that of much of the global supply of generic finished formulations is manufactured in India, especially for the developing countries of the world.

Patent status, broad strategy and the possibility:

It is worth noting here that the Indian Patent Office (IPO) has not recognized Sovaldi’s (sofosbuvir) patent for the domestic market, just yet. This patent application has been opposed on the ground that it is an “old science, known compound.”

It is interesting that the Indian Pharmaceutical Association (IPA) and others, such as, Delhi Network of Positive People and Natco have reportedly opposed Sovaldi’s (sofosbuvir) patent application. If the patent for this drug does not come through, low priced generic versions of Sovaldi, without any licensing agreement with Gilead, would possibly capture the Indian market.

Conversely, due to unaffordable price of Sovaldi for most of the Hepatitis C patients, even if a patent is granted for this drug in India, the sword of Compulsory License (CL) on the ground of ‘reasonably affordable price’ looms large on this product.

To negate the possibility of any CL, in the best-case scenario of a patent grant, Gilead seems to have decided to enter into licensing agreement with seven other Indian generic manufacturers to create a sense of adequate competition in the market, as many believe.

However, if the IPO considers sofosbuvir not patentable in India, it would indeed be a double whammy for Gilead. Without any patent protection, all these in licensing agreements may also fall flat on the face, paving the way of greater access of much lesser priced generic sofosbuvir to patients, as indicated above.

The action replay:

If we flash back to the year 2006, we shall see that Gilead had followed exactly the same strategy for another of its patented product tenofovir, used in the treatment of HIV/AIDS.

1. Voluntary license:

At that time also Gilead announced that it is offering non-exclusive, voluntary licenses to generic manufacturers in India for the local Indian market, along with provision for those manufacturers to export tenofovir formulations to 97 other developing countries, as identified by Gilead.

Gilead did sign a voluntary licensing agreement with Ranbaxy for tenofovir in 2006.

The arrangement was somewhat like this. Gilead would charge a royalty of 5 percent on the access price of US$ 200 a year for the drug. Any company that signs a manufacturing agreement with Gilead to manufacture API of tenofovir would be able to sell them only to those generic manufacturers that have voluntary license agreements with Gilead.

Interestingly, by that time Cipla had started selling one of the two versions of tenofovir, not licensed by Gilead. Cipla’s generic version was named Tenvir, available at a price of US$ 700 per person per year in India, against Gilead’s tenofovir (Viread) price of US$ 5,718 per patient per year in the developed Markets. Gilead’s target price for tenofovir in India was US$ 200 per month, as stated above.

2. Patent challenge:

Like sofosbuvir (Sovaldi), Gilead had filed a patent application for tenofovir (Viread) in India at that time. However, the ‘Indian Network for People Living with HIV/AIDs’ challenged this patent application on similar grounds.

3. Patent grant refused:

In September 2009, IPO refused the grant of patent for tenofovir to Gilead, citing specific reasons  for its non-conformance to the Indian Patents Act 2005. As a result, the voluntary license agreements that Gilead had already signed with the Indian generic manufacturers were in jeopardy.

Current status:

In 2014, while planning the launch strategy of sofosbuvir (Sovaldi) for India, Gilead seems to have mimicked the ‘Action Replay’ of 2006 involving tenofovir, at least, in the first two stages, as detailed above. Only the patent status of sofosbuvir from the IPO is now awaited. If IPO refuses patent grant for sofosbuvir, Gilead’s fate in India with sofosbuvir could exactly be the same as tenofovir, almost frame by frame.

Gilead and the two top players in India:

Very briefly, I would deliberate below the strategic stance taken by two top generic players in india, from 2006 to 2014, in entering into voluntary licensing agreements with Gilead  for two of its big products, as I understand.

Ranbaxy:

In my view, the stand of Ranbaxy in Gilead’s India strategy of voluntary licensing in the last eight years has remained unchanged. It involves both sofosbuvir and tenofovir.Thus, there has been a clear consistency in approach on the part of Ranbaxy on this issue.

Cipla:

Conversely, an apparent shift in Cipla’s strategic position during this period has become a bone of contention to many. For tenofovir, Cipla did not sign any voluntary license agreement with Gilead. On the contrary, it came out with its own version of this product, that too much before IPO refused to grant patent for this drug.

However, unlike 2006, Cipla decided to sign a voluntary license agreement with Gilead for sofosbuvir (Sovaldi) in 2014, though no patent has yet been granted for this product in India.

Has Cipla changed its position on drug patent?

I find in various reports that this contentious issue keeps coming up every now and then today. Some die-hards have expressed disappointments. Others articulated that the new dispensation in Cipla management, has decided to take a different stance in such matter altogether.

In my view, no tectonic shift has taken place in Cipla’s position on the drug patent issue, just yet.

The owner of Cipla, the legendary Dr.Yusuf Hamied has always been saying: ‘I Am Not Against Patents … I Am Against Monopolies’

He has also reportedly been quoted saying: “About 70 per cent of the patented drugs sold worldwide are not invented by the owning companies”.

He had urged the government, instead of having to fight for CL for expensive lifesaving medicines by the generic drug makers, where voluntary licenses are not forthcoming, the government needs to pass a law giving the generic players “automatic license of rights” for such drugs, making these medicines affordable and thereby improving access to patients. In return, the local generic manufacturers would pay 4 percent royalty on net sales to patent holders. He was also very candid in articulating, if Big Pharma would come into the developing markets, like India, with reasonable prices, Cipla would not come out against it.

According to Dr. Hamied, “When you are in healthcare, you are saving lives. You have to have a humanitarian approach. You have to take into account what it costs to make and what people can pay.”

Considering all these, I reckon, the core value of Cipla and its stand on patents have not changed much, if at all, for the following reasons:

  • The voluntary license agreement of Cipla with Gilead for sofosbuvir (Sovaldi) along with six other generic manufacturers of India, unlike tenofovir, still vindicates its strong opposition to drug monopoly, respecting product patents.
  • Cipla along with manufacturing of sofosbuvir, maintains its right to market the product at a price that it considers affordable for the patients in India.

Conclusion:

Indian Patents Act 2005 has the requisite teeth to tame the most aggressive and ruthless players in drug pricing even for the most feared diseases of the world, such as, HIV/AIDS, cancer, Hepatitis C and others.

Many global drug companies, resourceful international pharma lobby groups and governments in the developed world are opposing this commendable Act, tooth and nail, generating enormous international political pressure and even chasing it in the highest court of law in India, but in vain. Glivec case is just one example.

Some pharma majors of the world seem to be attempting to overcome this Act, which serves as the legal gatekeeper for the patients’ interest in India. Their strategy includes not just voluntary licenses, but also not so transparent, though well hyped, ‘Patient Access Programs’ and the so called ‘flexible pricing’, mostly when the concerned companies are able to sense that the product patents could fail to pass the scrutiny of the Indian Patents Act 2005.

It has happened once with even Gilead in 2006. The drug was tenofovir. Following the same old strategy of voluntary licenses and relatively lower pricing, especially when its drug patent is pending with IPO post patent challenges, Gilead intends to launch Sovaldi in India now.

Carrying the baggage of its past in India, Gilead seems to have been caught between a rock and the hard place with sofosbuvir (Sovaldi) launch in the country. On the one hand, the risk of uncertain outcome of its patent application and on the other, the risk of CL for exorbitant high price of the drug, if the patent is granted by the IPO. Probably considering all these, the company decided to repeat its 2006 tenofovir strategy of voluntary licenses, yet again in 2014, for Sovaldi in India.

As of today, Sovaldi strategy of Gilead in India appears to be progressing in the same direction as tenofovir, the way I see it. However, the final decision of IPO on the grant of its patent holds the key to future success of similar high-voltage, seemingly benign, marketing warfare of pharma majors of the world.

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.

“Fire in The Blood”: A Ghastly Patents Vs Patients War – for Pricing Freedom?

International award winning documentary film, ‘FIRE IN THE BLOOD’ could possibly set a raging fire in your blood too, just like mine. It made me SAD, REFLECTIVE and ANGRY, prompting to share ‘MY TAKE AWAYS’ with you on this contentious subject, immediately after I put across a brief perspective of this yet to be released film in India.

FIRE IN THE BLOOD is an intricate tale of ‘medicine, monopoly and malice’ and narrates how western pharmaceutical companies and governments aggressively blocked access to low-cost HIV/AIDS drugs in African countries post 1996, causing ten million or more avoidable deaths. Fortunately, in the midst of further disasters in the making, some brave-hearts  decided to fight back.

The film includes contributions from global icons, such as, Bill Clinton, Desmond Tutu and Joseph Stieglitz and makes it clear that the real struggle of majority, out of over 7 billion global population, for access to life-saving affordable patented medicines is far from over. This film has been made by Dylan Mohan Gray and narrated by Academy Award winner, William Hurt.

Two trailers worth watching:

Please do not miss watching, at least, the trailer of this the sad and cruel movie by clicking on the link provided on the word ‘trailer’ above and also here. To get an independent perspective, please do watch the review of the film along with interesting interviews by clicking here.

(Disclaimer: I have no personal direct or even remotely indirect interest or involvement with this film.)

International newspaper reviews:

The NYT in its review commented as follows:

“The only reason we are dying is because we are poor.” That is the heartbreaking refrain heard twice in the documentary “Fire in the Blood,” about an urgent and shameful topic: the millions of Africans with AIDS who have died because they couldn’t afford the antiretroviral drugs that could have saved their lives. Former President Bill Clinton, the intellectual property lawyer James Love, the journalist Donald G. McNeil Jr. of The New York Times and others offer perspectives on this situation and also on the concern that pharmaceutical companies value profits over lives.

The Guardian reviewed the film as follows:

“A slightly dry, yet solid reportage on a humanitarian disgrace: the failure of western pharmaceutical companies to provide affordable drugs to patients in the developing world. As presented, the corporate defense sounds horribly racist: that poorer Africans’ inability to read packaging or tell the time leaves them ill-suited to following any medication program… hope emerges in the form of the Indian physicist Yusuf Hamied, whose company Cipla undertook in the noughties to produce cheap, generic drugs in defiance of the Pfizer patent lawyers.

MY TAKE AWAYS:

Discrimination between human lives?

Life, as we all have been experiencing, is the greatest miracle of the universe and most astonishing creation of the Almighty. Among all types of lives, the human lives indeed have been playing critical roles in the development and progress of humanity over many centuries. These lives irrespective of their financial status, cast, creed, color and other inequities need to be protected against diseases by all concerned and medicines help achieving this objective.

What’s the purpose of inventing medicines?

“The purpose of business is to create and keep a customer”, said the management guru of global repute,  Peter F. Drucker. What is then the purpose of inventing new medicines in today’s world of growing financial inequity? 

Further, in his well acclaimed book, “Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits”, C.K. Prahalad, explained that the world’s over five billion poor make up the the fastest growing market in the world. Prahalad showed how this segment has vast untapped buying power, and represents an enormous potential for companies, who can learn how to serve this market by providing the poor with innovative products that they need. Do the Big Pharma players have any lesson to learn from this doctrine?

R&D is not free, has costs attached to it:

Medicines protect human lives against various types of diseases. Pharmaceutical companies surely play a critical role in this area, especially the innovator pharma players, by making such medicines available to patients.

These companies identify new products largely from academic institutions and various research labs, develop and bring them to the market. This has obviously a cost attached to it. Thus, R&D cannot be considered as free and the prices of patented products should not be equated with off-patent generic drugs. Innovators must be allowed to earn a decent return on their R&D investments to keep the process of innovation ongoing, though the details of such costs are not usually made available for scrutiny by the experts in this field

Discourage insatiable fetish for profiteering:

Respective governments must always keep a careful vigil to ensure that earning a decent profit does not transgress into a limitless fetish for profiteering, where majority of people across the world will have no other alternative but to succumb to diseases without having access to these innovative medicines. This situation is unfair, unjust and should not be allowed to continue.

Big Pharma – strongest propagators of innovation…bizarre?

It is indeed intriguing, when patients are the biggest beneficiaries of pharmaceutical innovations, why mostly the Big Pharma MNCs, their self-created bodies and cronies, continue to remain the most powerful votaries of most stringent IPR regime in a country, though always in the garb of ‘encouraging and protecting innovation’.

Thinking straight, who do they consider are really against innovation in India? None, in fact. Not even the Government. India has under its belt the credit of many pioneering innovations over the past centuries, may not be too many in the field of medicine post 2005, at least, not just yet. Do we remember the disruptive invention of ‘Zero’ by the Indian mathematician Brahmagupta (597–668 AD) or the amazing ‘Dabbawalas’ of Mumbai?  India experiences innovation daily, it has now started happening in the domestic pharma world too with the market launch of two new home grown inventions.

Coming back to the context, India, as I understand, has always been pro-innovation, in principle at least, but is squarely and fairly against obscene drug pricing, which denies access to especially newer drugs to majority of patients, in many occasions even resorting to frivolous innovations and evergreening of patents.

Mighty pharma MNCs are increasingly feeling uncomfortable with such strong stands being taken by a developing nation like India, in this regard. Thus, expensive and well orchestrated intense lobbying initiatives are being strategized to project India as an anti-innovation entity, while pharma MNCs, in general, are being highlighted as the sole savior for encouraging and protecting innovation in India. The whole concept is indeed bizarre, if not an open display of shallow and too much of self-serving mindset. 

This analysis appears more convincing, when genuine patients’ groups, instead of supporting the pharma MNCs in their so called ‘crusade’ for ‘innovation’, keep on vehemently protesting against obscene drug pricing, across the world. 

Obscene pricing overshadows the ‘patient centric’ facade:

Obscene pricing of patented medicines, in many cases, overshadows the façade of much hyped and overused argument that ‘innovation must be encouraged and protected for patients’ interest’. This self-created ‘patient centric’ facade must now be properly understood by all.

I reckon, India has now assumed a critical mass attaining a global stature. This will not allow any successive governments in the country to change the relevant laws of the land, wilting under intense pressure of global and local lobbying and expensive PR campaigns. 

Genuine innovation must be protected:

  • Genuine innovations, as explained in the Patents Act of India, must be encouraged and protected in the country, but not without sending a strong and clear signal for the need of responsible pricing.
  • It is also a fact, though some people may have different views, that Intellectual Property Rights (IPR) encourage innovation.
  • At the same time, the real cost of R&D must be made transparent by all innovators and available for scrutiny by the experts in this field to put all doubts to rest on the subject.

When Corporate Social Responsibility (CSR) is being widely discussed globally, which has now been made mandatory in India, these players keep arguing almost unequivocally that, thinking about ‘have nots’ is the sole responsibility of the Government.

Patents guarantee market exclusivity, NOT absolute pricing freedom:

Patent gives right to the innovators for 20 years market exclusivity, but NOT absolute pricing freedom in the absence of any significant market competition in that area.

Innovator companies do argue that patented products also compete in their respective therapeutic classes. This is indeed baloney. If patented products meet the unmet needs, how can it be ‘me too’ even in a therapy class? Unless of course, insatiated fetish of Big Pharma for market monopoly with free pricing even for ‘me too’ types of so called ‘innovative products’, becomes the key motive behind such an argument.

Who benefits more with patented medicines?

Who gets benefited more with these patented medicines? Certainly a small minority living in the developed world and NOT the vast majority of the developing world.

At the same time, huge profits earned by these companies from a small minority of these patients make them so rich and inexplicably arrogant that they do not bother at all for others without having adequate deep pockets, even in India. 

Conclusion:

I have a huge problem in accepting the pharma MNCs’ argument that ‘IPR’ and lack of ‘Access’ to IP protected drugs for ‘affordability’ reasons, are unrelated to each other. For heaven’s sake, how can they be?

As I said before, absolute pricing freedom for patented drugs is obscene, if not vulgar and must be curbed forthwith with the application of intelligent and well-balanced sensible minds and also in a way, which is just for all, both the innovators and the patients.

Big pharma MNCs can no longer afford to remain just as huge profit making entities, responsible only to their shareholders, shorn of societal needs for affordable medicines, required for around six out of over seven billion human lives of the world. 

Modern society, key opinion leaders and respective governments should not allow them to shirk their responsibility in this area any more, as we move on.

If not, will narratives like FIRE IN THE BLOOD, not keep us haunting again, again and again, on similar incidents taking place in some other countries, at some other time, involving extinction of millions of precious lives for not having access to affordable new drugs? They may be ‘have nots’, so what? 

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.

 

 

India, China Revoke Four Pharma Patents in A Fortnight: A Double Whammy for MNCs?

Revocation of four pharma patents by India and China within a fortnight has raised many eyebrows, yet again, across the globe. In this short period, India has revoked three patents and China one.

While this quick development is probably a double whammy for the Multinational Corporations (MNCs) operating in both the countries, a future trend could possibly emerge by analyzing and connecting the evolving dots.

On August 8, 2013, a judicial body, the Intellectual Property Apellate Board (IPAB) of India reportedly revoked two patents of Allergan Inc on Combigan and Ganfort, both are Fixed Dose Combination (FDC) drugs of known molecules, used in the treatment of specified eye conditions. Local pharmaceutical player Ajantha Pharma had challenged these patents granted earlier to Allergan Inc. by the Indian Patent Office (IPO), alleging that the patents were obtained on false representation, the compositions were obvious ones, mere admixture of two pharmaceutical substances and not inventions.

IPAB in its order, while revoking the patent, has also said:

  • “The revocation of the patent was sought on various grounds that the patent was obtained on a false suggestion or representation, that it is not an invention, that it is obvious and does not sufficiently disclose and that the Section 8 of the Patents Act, 1970 was violated.”
  • The “respondents (Allergan Inc) have incorrectly deciphered enhancement in therapeutic efficacy as reduction in interocular pressure comparable to serial application.”
  • “The respondent has not shown that it had complied with the Section 8 of Patents Act, 1970.”

Though Allergan claimed to have achieved enhanced efficacy with reduced side effects for these FDCs, the IPAB did not find the claims justifiable. Interestingly, Ajantha’s product reportedly is much less expensive too. As compared to Allergan’s Ganfort drops (3 ml) costing about Rs 580, Ajanta’s equivalent formulation costs just Rs 131.

The other pharma patent revocation of the fortnight:

On July 27, 2013, IPAB revoked yet another patent granted earlier to GlaxoSmithKline (GSK)’s Lapatinib ditosylate salt of its breast cancer drug Tykerb, while upholding the patent on the original API, Lapatinib. IPAB in its order has stated that the ditosylate salt version of Lapatinib is not patentable as per patentability criteria of the Indian Patents Act.

Experts believe, with these decisions, the Indian legal system has clearly demonstrated that despite intense anger, pressure and protests mainly from the United States and Europe, to dilute public health interest related safeguards enshrined in the current Indian patent regime, the rule of law still prevails in the country for IP disputes.

Tykerb decision of IPAB follows the landmark judgment of the Supreme Court of India clarifying patentability criteria for incremental innovations.

An interesting precedent set:

In case of Tykerb of GSK, unlike other occasions, for the first time one MNC has challenged the patent of another MNC in India, instead of domestic companies doing so. The German drug manufacturer, Fresenius Kabi, instead of criticizing Indian IP law like other MNCs, had challenged the British drug maker GSK’s patent on the patentability criteria as provided in the Indian Patent Law and obtained a favorable decision from the IPAB against one of their two patent challenges on Tykerb.

A different case, yet worth mentioning:

Earlier, in late 2012, Delhi High Court while recognizing the validity of Roche’s patent for Tarceva (erlotinib), ordered that Cipla’s generic equivalent of erlotinib has different molecular structures. Hence, Cipla has not infringed Roche’s patent.

The generic version of Cipla’s erlotinib is reportedly available at a price of Rs 1,600 against Roche’s price of Rs 4,800 for Tarceva. Though this is not a patent revocation, but an interesting case nevertheless.

Other patent revocations:

Besides the only Compulsory License (CL) issued, so far, by the IPO for Bayer’s Nexavar to Natco (Cost of a pack of 120 tablets of Natco generic is Rs.8,800 against Nexavar’s Rs. 280,000), such patent challenges are now taking place in India quite close on the heels of one another as follows:

Sutent (Pfizer): 

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

However, on November 26, 2012 in a new twist to this case, the Supreme Court of India reportedly restored the patent for Sutent. Interestingly, at the same time the court removed the restraining order, which prevented Cipla from launching a copycat generic equivalent of Sunitinib.

The cost of 45 day’s treatment with Cipla generic is Rs. 50,000 against Rs. 196,000 of Sutent. (Source ET, April 7, 2013)

Pegasys (Roche):

Again, on November 2, 2012 the IPAB revoked the patent of Pegasys (Peginterferon alfa-2a) – the hepatitis C drug of the global pharmaceutical giant Roche. It is worth mentioning, Pegasys enjoys patent protection across the world.

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

It is worth noting, although the IPO had rejected the patent challenges by Wockhardt and SRT in 2009, the judicial body IPAB reversed IPO’s decision revoking the patent of Pegasys, costing Rs. 360,000 for a six month course of treatment for a patient.

Iressa (AstraZeneca):

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

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

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

Anti-asthma FDC aerosol suspension (Merck & Co):

Similar to Allergan case, on December 11, 2012 Indian Patent Office (IPO) reportedly revoked a patent granted to an anti-asthma FDC drug of Merck & Co on the ground of lack of invention, after the domestic pharma major Cipla Ltd challenged an earlier granted patent of this FDC drug.

This aerosol suspension combines three molecules: mometasone furoate, formoterol and heptaflouropropane.

A similar asthma treatment, Dulera, reportedly lost its Indian patent held by Novartis AG in 2010.

Patentability for ‘Incremental Innovations’ in India:

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

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

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

Indian Patents Act prevails: 

As is well known, way back in 2006, IPO refused to grant patent to the cancer drug Glivec of Novartis on the ground that the molecule is a mere modification of an existing substance known as Imatinib.

In that case, on April 1, 2013 the Supreme Court of India upheld the validity of Section 3(d), where the rules of the game for patentability of incremental pharmaceutical innovations, as captured in the Indian Patents Act 2005, were cast in stone.

Court did not disallow all incremental innovations:

Point 191 in page number 95 of the Glivec judgment very clearly states as follows:

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

Thus, it should not be highlighted unfairly by concerned constituents that all ‘incremental innovations’ are not patentable in India. The above judgment just says that Glivec is not patentable as per Section 3(d) of Indian Patents Act based on the data provided and the arguments of Novartis.

Only 3% of patents are challenged:

Quoting a study, a recent media report highlighted that only 3% of the patent applications filed in India since 2006 were challenged. The study concluded, “This demonstrates that given the various resource constraints faced by the Indian patent office, one can never really be sure of the patent quality unless the patent is challenged.”

Rejection by IPO under Section 3d is minimum – is that a key issue?

Another study done by Columbia University reportedly found that out of 214 patents filed in India last year, only 3 patents were rejected by IPO exclusively for failing to prove better efficacy, as required under Section 3d. Turning this finding on its head, would it be reasonable to ponder:

Could this be a key issue for so many patents failing to pass the acid test of judicial scrutiny when challenged?

Government has no role to play in IP disputes:

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

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

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

Pharma patents granted in India:

As reported in the media, pharma MNCs have been granted over 1,000 patents since 2005. Moreover out of 4,036 patents granted in the past six years, 1,130 have been awarded to MNCs, like:

  • AstraZeneca 180 patents
  • Roche with 166 patents
  • Sanofi with 159 patents
  • Novartis with 147 patents

It is therefore understandable, as pharma MNCs have secured more number of pharma patents they are facing larger number of litigations at this point of time.

China and Brazil revoke patents:

Last week, just about a year after China introduced the country’s amended patent law, its State Intellectual Property Office (SIPO) has reportedly revoked the patent on HIV/AIDS and hepatitis B drug – Viread (tenofovir disoproxil fumarate) of Gilead Science Inc. Aurisco, the largest manufacturer of active pharmaceutical ingredients in China, challenged this patent. The ground of patent revocation was that the drug lacked novelty and was not entitled to protection.

In 2008 Brazil also declared the patent of tenofovir invalid. It is worth mentioning that tenofovir of Gilead is the third-best-selling drug of the company, clocking sales of US$ 849 million in 2012.

South Africa mulls new law to stop ‘Evergreening’:

Recently, the Department of Trade and Industry of South Africa has reportedly submitted to the South African Cabinet a draft Intellectual Property Policy with far-reaching changes to the country’s Intellectual Property Rights (IPR) for medicines in order to increase access to cheaper drugs by making it harder for companies to obtain and extend patents.

The draft includes a proposal to introduce a patent examination office to stop pharmaceutical companies from “evergreening” where companies take out new patents based on minor changes or new uses. 

Currently, South Africa uses a depository system, in which patent applications are granted without extensive scrutiny. Experts believe, “this system allows companies to file multiple patents on the same medicine and extend the life of their monopoly, keeping prices artificially high.”

Innovators Angry:

In this context, the following report recently captured the anger of the innovator companies and stated that the US drug giants are once again pushing for stronger patent protection in India:

“A coalition of U.S. lawmakers and business groups outlined concerns about Indian policies as a threat to American exports, jobs and innovation in a letter to President Barack Obama on June 18. Among the business groups were the Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Association. On June 14, the top Democrat and Republican on the Senate Finance Committee urged that Kerry raise trade concerns on his visit.”

Quoting US Chamber of Commerce’s Global Intellectual Property Center another report highlighted, “Recent policy and judicial decisions that invalidate intellectual property rights, which have been increasing in India, cast a daunting shadow over its otherwise promising business climate. From the revocation of patents to the staggering rates of piracy, India stands alone as an international outlier in IP policies. This trend is bad for investment, innovation and international trade.”

Does it benefit patients? 

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

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

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

Following table is an example of price differential between patented and generic equivalents of those molecules used in the treatment of HIV/AIDS:

1

2

3

3TC (Lamivudine)

Zerit (Stavudine)

Viramune (Nevirapine)

Price / Year / Patient in US$

Price / Year / Patient in US$

Price / Year /Patient in US$

GSK

Cipla

Hetero

BMS

Cipla

Hetero

B.I.*

Cipla

Hetero

3271

190

98

3589

70

47

3508

340

202

(Source: Third World Network, *B.I: Boehringer Ingelheim) 

Patentability for ‘genuine innovations’:

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

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

Conclusion:

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

Since, most of the above patents have not been challenged, as yet, the quality of these patents cannot be ascertained beyond any reasonable doubt, as we discuss today.

If the apprehension, as expressed above in the IPA study has any merit, right answers to the following questions, I reckon, would help charting out the future direction for the IP ecosystem of India:

  • Is there a theoretical possibility of revocation of all these 86 already granted product patents, if and when challenged in a court of law?
  • Is the current Patents Act of India pragmatic?
  • Does it reasonably benefit both the innovators and the Indian patients,  signifying a paradigm shift in the global IPR scenario?
  • Will it inspire other countries also to emulate similar IP system in the years ahead?
  • Will it then invite more intense ire of the global pharma innovator companies creating increasing  pressure on the Indian Government to amend the current Patents Act?
  • Being under continuous public scrutiny, would it be feasible for any Indian Government, now or in future, in the near or medium term, to amend the Indian Patents Act due to any amount of outside pressure?
  • And finally, is the Act then irreversible, at least, for quite some time from now?

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.