A tug of war

A tug of war

India’s nasacent patent regime is under the scanner and the industry is grappling with questions like – What is the long term solution to balance patent protection with patient needs, in developing countries like India and especially with life threatening conditions like India and especially with life threatening conditions like cancer and AIDS? What is the situation in other countries on such issues? Express Pharma presents different viewpoints from stakeholders at the frontline of this ‘patent vs people’ debate…

Attack on patents divert attention from core healthcare issues

Tapan Ray

Director General, Organisation of Pharmaceutical Producers of India

Ushering in the product patent regime in India heralds the dawn of a new era. The era that vindicates not only the need to encourage, protect and reward innovation for the rapid progress of our nation but also to compete effectively, in the knowledge economy with the best in the world to establish India as a leading country with a significant share of the global economy.

However, it is quite unfortunate that the patents that protect today’s innovations and drive research and development to create tomorrow’s life-saving treatments are under criticism from some quarters.

India chose to follow an alternative to product patent regime for many years. In 1970, the Government of India amended its Intellectual Property (IP) laws with a clear objective in mind to reduce the prices of medicines to improve their access to the ailing population of the country.

As a result, some drugs were made cheaper. However, the moot question that we need to address now is—was it a panacea? While looking back, it does not really appear so. On the contrary, the situation remained as gloomy thereafter, so far as the access of medicines is concerned. After almost four decades of continuation with the above policy, around 65 percent of Indian population still do not have access to cheaper off-patent medicines against comparative figures of 47 percent in Africa and 15 percent in China (Source: International Policy Network, November 2004).

Children still go without routine vaccinations, though the Government has made the primary vaccination programs free in our country, for all. Even in a situation like this, where affordability is no issue, only about 44 percent of infants (12-23 months) are fully vaccinated against six major childhood diseases—tuberculosis, diphtheria, pertussis, tetanus, polio and measles.

Moreover, as we know, despite distribution of cheaper generic HIV-AIDS drugs by the Government and others mostly free for years, only five percent of India’s AIDS patients were receiving any drugs by the end of 2006.

The above two important examples prove the point very clearly that, addressing the issue of price alone will not help our country to solve the issue of poor access of medicine to the ailing population of India. Only a sharp focus on rejuvenation of our fragile healthcare system, healthcare financing and rapid development of healthcare infrastructure of the country by the Government or through Public Private Partnership (PPP), will help address this pressing issue.

Indian Patent Act 2005 has paved the way for innovation and hi-tech research and development within the country. Contrary to adverse forecasts from some quarters, prices of medicines have not gone up.

However, while medicines play a relatively small role in rising overall health care spending including hospitalisation, it is important to ensure that individuals with large healthcare expenses have affordable access to their medicines. Thus a good affordable insurance coverage (both government and private) available to all Indians belonging to various socio-economic strata, together with the above measures, will help address the key issues of both access and affordability of medicines for all, in a holistic way.

The attack on patents is not really a defense of patients or the poor. Such attacks help diverting attention from the core healthcare issues, as mentioned above, which are healthcare system, healthcare financing and healthcare infrastructure. Health of our nation will depend on how well these key issues are being addressed by the policy and decision makers. Our country cannot afford to ignore that IP is one of the keys to prosperity of a great nation like India and it should be encouraged, protected and rewarded under a robust Patent Act of the country for inclusive growth.

Patent linkage creates impossible situation for regulatory authorities

Dilip G Shah
CEO, Vision Consulting Group and

Secretary General, Indian Pharmaceutical Alliance

Patent linkage is the practice that creates a link between the patent status of a product and its application for marketing authorisation which prevents registration and authorisation of generic medicines. The only country where this practice was established as a part of the pathway for generics is the US. Some other countries have since accepted it as part of the bilateral free trade agreement (FTA) with the US.

Some recent FTAs mandate linkage, but provide no means for generic companies to challenge questionable patents, offer no incentive for the early resolution of patent disputes and do not limit the types of patents that can be listed for a drug product. Without such measures, the terms of the FTAs could provide de facto patent extensions in the pharmaceutical industry, encourage lower quality patents and allow unjust delays in access to affordable medicine. Adopting all the particularities of the US system may be unnecessary to achieve a balance between encouraging innovation and ensuring access to affordable medicine. US law has a provision that marketing approval for generics by the health authorities needs to be mindful of patents. However, US law provides checks to linkage that protect generics from dubious patent claims and protracted litigation that do not exist in other countries.

Under US law, a generic manufacturer may submit, along with its Abbreviated New Drug Application (ANDA), a ‘paragraph IV’ challenge attesting to either non-infringement or invalidity of the patent. The patent holder has 45 days to file a patent infringement action which triggers an automatic 30-month stay of approval of the generic manufacturer’s application (which can be shortened by court order in egregious cases). US law allows FDA approval and marketing at the expiration of the 30-month stay, even if the lawsuit is still pending. US law also provides another mechanism to facilitate timely resolution of patent disputes by allowing generic applicants to seek a declaratory judgment on the expiration of the 45 day window. These measures balance strong patent protection with the ability to challenge weak and questionable patents and encourage timely resolution of patent disputes. The US Hatch-Waxman system embodies this concept; yet, it also specifies the types of patents that may be listed for a drug—those patents to which an applicant must refer in seeking approval for a generic drug. Additionally, US law provides a counter measure for improperly listed patents that would otherwise cause unjust delay of approval. Known as ‘delisting’, the term refers to an applicant obtaining a court order that requires the patent holder to correct or remove patent information listed with the FDA for a product. For countries which do not have such an elaborate system of checks and balances, patent linkage creates an impossible situation for regulatory authorities who lack the mission, resources and legal expertise to assess the validity of patents. If we take into account that any single product is usually protected by many different patents and that the status of these patents is subject to change (additional patents granted, invalidation of patents etc), setting up and maintaining national patent database is an extremely resource intensive exercise which requires the expertise of IP specialists. India must, therefore, not blindly emulate the US, but evolve its own system of not burdening regulatory authorities with the patent status and letting the right-holder enforce his patent rights.

Compulsory licensing and government use

The WTO member states took several months of negotiations to arrive at the final text of ‘Doha Declaration on the Public Health and TRIPS Agreement’ that was released on 14 November 2001. Thereafter, they took two more years to come up with an agreed text in the ’30 August 2003 Decision’ on the use of compulsory licensing and government use as tools to protect the public health. Some countries in the developed regions offered not to use this provision, but almost all low and middle income countries opted to incorporate these decisions in their laws.

The UK Commission on Intellectual Property Rights in its report on integrating intellectual property rights and development policy has observed—

“In cases in which it is considered that the patentee is acting in an inappropriate manner then governments can intervene to remedy the situation. Such intervention could emanate from the general competition regime, or from within the patent system itself. The possibility of governments using, or allowing other third parties to use, a patented invention without the consent of the patentee is well established in patent law, and in TRIPS, as we note in Chapter two. TRIPS prescribes a number of conditions that must be met in cases of such “unauthorised” use, but it does not prescribe the grounds on which such use can be authorised. Developing countries can therefore develop their own grounds for authorising compulsory licensing, or other exceptions to the rights of patentees (such as Crown or Government use in developed countries).”

Indian Patent Law embodies these provisions of the TRIPS agreement, Doha Declaration and 2003 Decision.

Notwithstanding the international agreement on the use of these safeguards for public health, many foreign companies are questioning these safeguards and want India not to use them for the people of India as well as people of other low and middle income countries. This is borne out by the recent experience of a patent holder threatening generic companies in India against supplying certain medicines to Thailand for government use.

One therefore wonders about the enforceability of compulsory licensing and government use of provisions in the law. Many were skeptical of these agreements and texts and had expressed doubts, when they were signed, about their working. And, indeed, it has not worked so far as evidenced by lack of grant so far. This may only lead to generating more pressure for a workable solution.

Issue about healthcare and not medicines

Dr Ajit Dangi

President & CEO, Danssen Consulting

I think the culture of copying has gone in to our genes. Whether it is breaching somebody else’s patent, or lifting a tune for a Bollywood song or using a similar sounding name of a well established brand, these things come naturally to us. We must get this trait out of our system and begin respecting intellectual property (IP) of others if we aspire to become a knowledge superpower.

If Drug Controller General (India) (DCGI) is giving marketing approval for a patented new drug, it is mockery of the patent law. Why does then DCGI ask the question for a new drug approval whether the drug is patented and in which countries. DCGI cannot feign ignorance about a drug’s patent status and must coordinate with patent controller before granting marketing approval for a new drug. Recent reports indicating that DCGI is likely to consider patent status before granting new drug approval is a welcome move and should be implemented at the earliest.

Regarding compulsory licensing (CL), we have broadened its scope to ambiguous terms like affordability, ‘working’ of the patent (whatever that means) etc. All over the developed world CL is granted only for national emergencies (eg bird flu, terrorist threat like anthrax in US etc). Using CL for non-emergency is a short term measure. There are hundreds of clinical trials being conducted on new drugs all over the world on several life threatening and neglected diseases. What motivation will research scientists have if all these drugs are granted CL? In recent times only military regimes like Thailand have invoked CL for non emergency purpose. The right solution would be to expand health insurance so that people do not have to pay from their own pocket, scrap all duties and taxes on medicines (excise, VAT, customs, octroi, education cess etc.) and develop an effective public private partnership (PPP) programme to supply such drugs to BPL families.

NGOs who clamour for CL for anticancer and anti HIV drugs must remember that there are a host of other diseases like diabetes, hypertension, CRF, tuberculosis, malaria, leprosy etc afflicting million of Indians. Do we then grant CL to all such drugs? The issue is about healthcare and not medicines. Medicines form only a small part of the total healthcare chain. Our Government gets away by spending just about one percent of the country’s GDP on healthcare, while WHO recommends seven to eight percent. Rather than giving away thousands of crores of rupees in sops and pay hikes to appease vote banks, government should come out with a long term comprehensive healthcare plan based on prevention rather than cure. Opportunity for one more Group of Ministers (GoM)?

Respect patent laws

Priyank Gupta

COO, IP Feathers

Seventeen years back in 1991, detection of lung cancer meant a notice of death to the patient; existing therapies with cisplatin and etoposide (drugs available at that time) could only buy a very little time to the life of a patient. In the meanwhile scientists of OSI Pharmaceuticals and Pfizer decided to collaborate and encompass research and development of drugs based on oncogenes and tumor suppressor genes, in order to come up with a better answer to cancer. After innumerable attempts and trials, they came up with Erlotinib (popularly known as Tarceva) which was approved and launched for the treatment of non small cell lung cancer (NSCLC) in November 2004 and pancreatic cancer in 2005 in the US. Tarceva’s clinical trial data shows that it has demonstrated a striking survival benefit (42.5 percent) in advanced non-small cell lung cancer, the most common form of the disease. Now, wasn’t that in the interest of the “public heath”? The drug is now marketed by the licensees Genentech (US) and by Roche (rest of the world including India).

It took a decade of hard work for OSI Pharmaceuticals to bring a safe and effective drug to market, but it only took less than two years for Cipla to replicate the same. A few generic companies, NGOs and healthcare lobbyists in India have started opposing the innovator company’s drugs on the grounds of “public health interest” in courts. But let us first decide what public health interest is. Is the invention of a new drug called the public health interest, or mere copying and selling it at reduced prices is in the health interest of a common man? Let alone Tarceva, the drug which required only as a second-line cancer therapy (after failure of first line treatments eg. chemotherapy) the common man in India does not have access to basic medicines for diseases like malaria and leishmaniasis. So the need of the hour is to pitch for a better healthcare supply chain and healthcare insurance system.

Imagine a person X who suffers from cancer—would he like to get rid of the cancer or simply would prefer taking cheap generic drug all his life. It is not that the innovator version of the drug is more potent, but it is more likely that the revenue collected by the innovator will be reinvested in funding for permanent or advanced solution for the disease. The society has to accept a certain premium price model for innovator’s drug inside the patent term.

Yet another issue is the linkage of drug approvals to their respective patents. According to reports, Drug Controller General of India (DCGI) is considering linking regulatory approvals to the patent status; the move will require an amendment in Drugs and Cosmetics Act of 1940. The ‘Orange book’ type listing for patents related to a drug, by DCGI will be a fair practice, provided the decision of the grant of the regulatory approval shall not be influenced by the patent status. The job of the office of DCGI, and other regulatory bodies is to approve safe and efficacious medicines; the decision over infringement shall be left for the Intellectual Property (IP) appellate board and the judiciary. The benefits of the ‘Orange book’ type listing to the generic companies and individual innovators will be that they have a ready access to the knowledge of the patents granted for a particular product in India, this may assist in avoiding infringements and will help in enforcing patents.

In common folklore it is said that Shah Jahan ordered that the hands of the artisans who built the Taj Mahal be chopped off to ensure that they would never build another Taj Mahal, but there is little to substantiate this story. Are we doing the same with innovator’s drug patents in the name of compulsory licensing and public health interest? The Indian patent law is one of the best written patent laws in the world and prevents the grant of invalid patents by two tier mechanism of oppositions. But let us enforce the patent law in stricter terms and not confuse the judiciary with non patent issues in patent lawsuits.

Balancing patent protection with patient needs

Dr Gopakumar Nair
CEO, Gopakumar Nair Associates

Patent & Trademark Attorneys IPR Consultants & Advisors

Long term solutions to balancing patent protection with patient needs in developing countries like India, especially in the backdrop of life threatening conditions like cancer and AIDS, are thoughtfully incorporated into the Patents Act, 1970. The relevant sections chronologically are as follows:

(1) Section 2(i)(j), 2(i)(j)(a) and Section 3(a) to (p)
Prevents grant of patents for inventions which are (i) frivolous (ii) injurious to human, animal or plant life or health or environment (iii) mere new use or mere new forms of known drugs (iv) mere mixture of known drugs (v) medicinal, surgical, curative, prophylactic, diagnostic, therapeutic methods of treatment (vi) plants animals (including human being) or parts thereof (vii) traditional knowledge.
(2) Section 11-A—Publication of the application (specification) in Patent Office Journal.
(3) Section 12—Substantive examination to reject inventions without merit and grant of patents only to qualifying inventions.
(4) Section 25—Any person can oppose a published application under pre-grant opposition [Section 25(1)]. This is a provision available only in India and is a major safeguard. Under Section 25(2), a granted patent can be opposed and revoked/amended within one year of grant, if it was wrongly granted.
(5) Section 47(3)—Patented invent-ions can be made or used for purpose of experiment, research or teaching.
(6) Section 47(4)—Import of any patented medicine allowed purely for government use.
(7) Section 83 (a) to (g)—This is a very important section. As per Section 83, the following provisions for abuse, prevention and protection for patents are available. (i) Patents are to be worked in India on commercial scale and to the fullest extent without undue delay [83(a)] (ii) Patents are not granted merely to enjoy a monopoly for the importation of the patented product [83(b)] (iii) Must be conducive to social and economic welfare and to a balance of rights and obligations [83(c)] (iv) Patents should not impede protection of public health and nutrition [83(d)] (v) Patents must act as instrument to promote public interest in socio-economic and technological development of India [83(d)] (vi) Patents should not in any way prohibit Central Government in taking measures to protect public health ([83(e)] (vii) No abuse of Patent rights [83(f)]

(viii) Patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public [83(g)]

Section 84—Compulsory licences

Compulsory licence can be granted if the following conditions are not met:

(a) reasonable requirements of the public (b) drugs available to public at a reasonably affordable price

(c) patented invention not worked in India

Section 84 and Section 92—Liberal compulsory licence for

(i) National emergency (ii) Circumstances of extreme urgency (iii) Public non-commercial use

(iv) Patentee’s anti-competitive pract-ices.

Section 84—Compulsory licences, further on following grounds

(i) refusal to grant voluntary licence on reasonable terms (ii) interests of manufacturing industry in India is prejudiced (iii) demand not adequately met at reasonable terms (iv) export demand not adequately met (v) establishment or development of commercial activity is prejudiced (vi) restrictive clauses or practices in licensing

(vii) working on commercial scale is prevented or hindered

Section 92(A)—Compulsory Licence for export against CL issued from overseas.

Section 100—Government use provision. Patented invention is open for free use by Government.

Section 101—Third party use for purposes of meeting Government requirements.

Section 107(A)—(a) patented invention can be used by third party for R&D and regulatory submission

(b) Parallel imports from authorised sources.

Section 104—Counterclaim for revocation (invalidation) of patents.

Section 146 (2) and Rule 131—Six monthly return to be filed on commercial scale working of patents in India (Form 27).

In view of these in-built provisions in the Patents Act, 1970, if corresponding actions are not taken at lowest level (patent office) to implement such safeguards, extensive multistage litigations become essential to implement the safeguard provisions through judicial interventions.

Similar safeguards such as compulsory licence, research exemptions and ‘non-patentability of hazardous to health and environment’ etc are available in all countries of the world, to a varying degree. There is a strong compulsory licence provision for medicines in French Patent Law. USA itself has 28USC 1498 which provides that US Government use of any patented invention will not amount to infringement and the patentee is only eligible to recover reasonable compensation. Almost all third world countries have compulsory licensing provision in their patent laws, some have used it and some have threatened to use it with beneficial results.

Patent—regulatory interphase

India is sovereign republic and a parliamentary democracy statutory sanctity for any legal subject matter can only be claimed after parliamentary enactments of new law or amendments of existing law to incorporate new provisions. If there are any provisions or practices in overseas jurisdictions, such treatment is not available or claimable automatically in India, as all laws are strictly subject to territorial jurisdictions. Even if there are international or global treaties, conventions, covenants, agreements, protocols or such like instruments to which India is signatory, while there is an obligation for India to bring Indian laws in line with the Articles or Sections which are mandatory (and only optionally for provisions which are suggestive or directory in nature), any provision or arrangement in any overseas country will not become law in India unless the existing Indian law is amended or new law is enacted.

While TRIPs Article 39.3 provides for a minimum level of data protection, the wording of Article 39.3 has many ambiguities and vagueness in its draft. India is free to implement the data protection or data exclusivity provisions with flexibilities or safety clauses to ensure that any limitation or restriction on third party use of data is not leading to misuse or abuse. India is also free to determine the checks and balances to be installed to ensure that the data exclusivity demanded by Article 39.3 is restricted only to new chemical entities that also subject to determination of the priority date from which the exclusivity is calculated. Any member country is free to choose the rules and procedures to implement the minimum obligations and are free to have additional measures.

Drugs & Cosmetics Act, 1940 of India or Patents Act, 1970 or any other Act will need to be suitably amended to incorporate any provision to restrict regulatory clearances to Patent status. No country of the world does restrict regulatory clearances to patents. Regulatory clearances in some countries of the world, are linked to the period of data exclusivity. During the period of data exclusivities, no regulatory approvals are granted to another party in some countries like USA, Europe, Japan, China etc. However, there is no restriction whatsoever in any country without data exclusivity provisions for grant of regulatory approval during validity of patents. Para IV type ANDA filing is an example. It is for the patentee or licencee to challenge and file suit for patent infringement if a regulatory approval is granted and market launch is done. It is upto the challenger to counter-claim for invalidation of the patent (as in Section 104 of Patents Act, 1970) and for the courts to decide and justify if the patent is valid or not, if the patent is infringed or not and if there are any justifiable grounds to grant reliefs to either parties. Under Section 101 of Patents Act, 1970, even the Government has powers to intervene in public or national interest.

India has no legal provision under which the office of the DCGI can refuse the regulatory approval for any pharmaceutical API or dosage form purely on the ground that there is a patent granted to a similar or same product. If the DCGI refuses an application on such a ground, it will be null and void as there is legal support for such an action under any Acts or rules in existence in India as on date. Any such action will need to seek legal support, which can only be through an Act of Parliament or a substantive amendment.

Patents Act, 1970 of India, for that matter, Patent Act of any other country including USPTO (35 USC), does not forbid the DCGI in any way from granting regulatory approvals. In fact, there is no link whatsoever between Patents Act, 1970, which deals with Patents and Drugs & Cosmetics Act 1940 which deals with regulatory approvals to pharmaceuticals.

In the meantime, a financial daily has recently reported that the DCG(I), his office will not grant marketing approvals for generics, covered by patents. This appears to be hasty and uninformed or misinformed statement. The Satwant Reddy Report or even the NSG (N S Gopalakrishnan) Report have not yet been implemented. They have not even been discussed in the cabinet, to the best of information. Every executive decision should find support in legislative intent and must stand judicial scrutiny and approval. DCG(I) must check and ensure as to where will such a decision find legal support or sanction.

It appears that history is repeating itself. In 2000, a similar proposal had come up. However, due to lack of provision in the Act, the same did not get implemented. The state of affairs in the Central Government and Cabinet of Ministers, especially of Chemicals and Health, may be helpful now to add to the confusion and chaos. Legal approval or sanction is always better sought early rather than late.

Any ‘unlawful’ executive action could lead to serious legal implications, especially if not in line with legislative intent and judicial support. A recent media report from USA, Question of law— appointment of 46 US patent judges under cloud, is an example of how a non-judicious executive action can put lives of millions, even billions, on the brink.