October 18, 2011

Indian generic drug firms - pharma MNC patent fight to determine price of medicines

Last month, former Solicitor General Gopal Subramanium launched an impassioned argument in the Supreme Court against the rejection of a patent to Glivec, a leukemia drug made by pharma MNC Novartis. His appeal, which ran for three successive days, was directed at a controversial provision in the country's patent laws that have largely favoured domestic drugmakers. A week earlier, Natco Pharma had filed the country's first compulsory licensing application, a provision that allows a generic drugmaker to make and sell a cheaper version of a patented drug by paying royalties. The Indian company was taking aim at German firm Bayer AG's patented cancer drug Nexavar. In Natco's case, the government will decide if its application deserves merit. Whichever way the cases go, their outcomes will have far-reaching implications on the country's patent regime, which is at a tipping point thanks to a long-running battle between global drugmakers on one side and local companies and health activists on the other. The verdicts are also expected to bring clarity on a contentious issue and influence the plans of drug MNCs in India. Final Word Both sides are hopeful that the verdicts will go their way. "A loud and clear statement [will go out] to all that for India, nothing is more important than its people," says Dilip G Shah, secretary general at Indian Pharmaceutical Alliance, which lobbies for big Indian generic firms. But leading intellectual property lawyer Pravin Anand, who represents several foreign drugmakers, says the government and industry have not given due respect to innovations or patents. "For years, we have been saying we are not ready. It is time we bite the bullet," says Anand. In any case, the cases will have a significant bearing on the grant of patents in the country, thereby affecting the cost of treatment. Generic medicines produced by Indian companies are cheaper by up to 35 times than foreign drugs. Novartis is seeking clarity on the interpretation of Section 3(d) of the patent law, a provision that rejects patent claims for incremental innovation unless it provides significantly enhanced thereupatic efficacy over known compounds. The provision has long been the cause of the rejection of several patent claims in India's four patent offices and courts. The case centres on the legal interpretation of certain terms in the section such as "efficacy" and "known substances". Novartis has faced two reversals related to the drug in lower courts. The case, now in the final leg, is due to be heard afresh after one of the judges recused himself. Natco's application will decide the government's policy on allowing generic firms to market their version in public interest, dreaded words for a patent holder. Natco says Bayer's drug, at about `2.85 lakh for a month's dose, is unaffordable for patients. The company wants the government to force Bayer to grant a licence to sell its own version at `8,900, or 32 times cheaper. Industry watchers have dubbed the move as a small step for Natco but a giant leap for the Indian generic industry. Amit Sengupta of the People's Health Movement says a favourable verdict will encourage more Indian companies to knock on the government's doors. Weak Regime? Despite reservations from some quarters, India adopted a new patent regime in 2005 that gives a patent holder 20 years exclusive rights to sell its products in a country where about a third lives below poverty line and cost of health care is among the main causes of indebtedness. Until then, India followed a patent regime . adopted by the Indira Gandhiled government in 1971 . that allowed local firms to make generic copies of patented products as long as they used a different process. The new patent regime also ushered in a growing number of patent disputes between global drugmakers and Indian generic companies. MNCs have been calling for stricter enforcement and interpretation of some its clauses. Their dismay stems from the practice of lower courts typically siding with Indian companies, bearing in mind public interest. "There are some issues that need to be addressed such as the interpretation of Section 3(d) and issue of data exclusivity," says Tapan J Ray, director general at Organisation of Pharmaceutical Producers of India (OPPI). But Pratibha Singh, another Delhibased lawyer, says the IPR implementation since 2005 has been 'absolutely perfect'. The objections of a few pharma firms do not mean the implementation is ineffective. Still, some independent experts say though India's patent regime appears fairly sound on paper, there is room for improvement. ''There are still several gaps in terms of its actual implementation,'' says Shamnad Basheer, professor in IP Law at National University of Juridical Sciences. This includes a shortage of well-qualified patent professionals, limited capacity at patent office and courts, among other constraints. What is now clear is that India Inc, in particular the drug industry, will have to live with patent disputes for at least 50 years as is in the developed markets, says Singh. Global MNCs, meanwhile, have threatened to halt their investments in India, particularly in R&D. Firms such as Novartis have shown that it is no empty threat. According to Shah, it's a trade-off between FDI and public health. The Indian pharmaceutical industry has emerged as a global player on its own and it is capable of judging its interests, he says. The key concern of the government and health activists is that a weak patent regime would make drugs unaffordable. If Novartis wins, India may end up granting far more patents than required under international trade rules or envisioned by India's lawmakers, says Geneva-based NGO Medicines Sans Frontiers. The best way for the government to balance promoting innovations and access to drugs is by limiting grant of patents to deserving inventions, say experts. ''Compulsory licensing is a key tool in this balance between innovation incentives and access to medicines as it ensures easy availability of affordable medicines and also compensating the innovator,'' says Basheer. Link: Original Article

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