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Losing Patent Fights In India

Because of the country’s strict definition of innovation, major drug firms struggle to win patent protection there

by Jean-François Tremblay
July 5, 2010 | A version of this story appeared in Volume 88, Issue 27

India’s patent office ruled in April that the patent on Valcyte, a Roche drug that prevents infection in transplant patients, is not valid in the country. With its decision, the patent office endorsed claims by Indian generic drug companies that Valcyte is not sufficiently innovative.

The Roche case is just the latest in a growing list of instances in which international drug companies are unable to secure protection in India for patented drugs they sell elsewhere around the world. In 2005, India adopted a new patent regime that offers better protection for pharmaceuticals than did the previous system, but it is now becoming clear that the country’s tough definition of innovation means companies aren’t benefiting from the rules as they thought they would.

“What India is doing is to follow the advice of several NGOs [nongovernmental organizations] and really implementing a strict definition of what is innovative—stricter than in Western countries anyway,” says Eric Noehrenberg, head of the legal consulting firm Noehrenberg International Policy Consultancy. “It’s very hard to argue that they should not be allowed to define innovative.” Prior to forming his own firm, Noehrenberg was director of public health advocacy for the International Federation of Pharmaceutical Manufacturers & Associations, a Geneva-based trade group.

From 1970 to 2005, India had a pharmaceutical patent regime that protected drug manufacturing processes, but not molecules or treatments. When India joined the World Trade Organization in 1995, it also became a signatory to the WTO-sponsored Trade-Related Aspects of Intellectual Property Rights agreement. To comply with its TRIPS obligations, India reformed its patent regime in 2005 to provide protection for drug molecules.

The 2005 reform had one key difference from pharmaceutical patent systems in place in most developed countries. In India, patents are granted for major breakthrough drugs, but not for derivatives, new uses, combinations, or new formulations, which the patent system considers not innovative enough.

“We had not really foreseen these differences to be such a major problem in 2005,” Noehrenberg says, “but through the interpretation by the courts, it has become a large loophole that will have a negative impact on innovators trying to introduce innovative products into the Indian market.”

In its April decision, the patent office ruled that Valcyte was too similar to the Roche drug Cytovene and therefore lacked novelty. Valcyte is a prodrug of Cytovene that features an added l-valine ester for better bioavailability. The firm has filed an appeal, a Roche spokesman tells C&EN.

Lack of novelty is not the only reason that Indian authorities use to withhold the benefits of patent protection from foreign drug manufacturers. Another reason is reluctance by the courts to side with patent holders in cases where the law is somewhat vague.

In February, for example, Bayer lost when it tried to argue that the Drug Controller General of India (DCGI) should not issue the Indian firm Cipla a license to market a generic version of the cancer drug Nexavar because it was under patent protection. The High Court of Delhi essentially ruled that DCGI is not concerned with patents but with whether drugs are safe and necessary. “The court cannot and ought not to dictate that policy shift,” the ruling said.

For international drug companies, India’s patent regime means that they cannot profit as they had hoped in the increasingly affluent Indian market. More important, Indian generics producers can continue to export generic versions of still-patented drugs to developing countries with weak patent protection. Such markets in Africa, South America, and parts of Asia are ­substantial.

Seeking to cooperate with Indian companies wanting to manufacture a generic version of the HIV treatment Viread, Gilead began licensing them the rights to produce the drug in exchange for a modest 5% royalty. The program was so successful, says Polly Fields, associate director of public affairs at Gilead, that the price of Viread dropped 63% and the number of patients receiving it in developing countries rose from 30,000 to 700,000.

But as a patent protection strategy, Gilead’s approach failed. Challenges to Viread emerged, and last September, Gilead found itself in the same situation as Roche had been in. The patent office ruled that Viread, which is on a WHO list of drugs approved for the treatment of HIV, lacks novelty. “Gilead is currently challenging the unfavorable decisions on the Viread patent applications through an appeals process,” Fields says.

Novartis, which was denied a patent for the cancer treatment Gleevec, is seeking more than just patent recognition. It aims to change India’s patent law. In a position statement, Novartis says that it is defending its patent as a matter of principle.

The company maintains that incremental innovation needs to be protected as much as breakthrough innovation does. “If an insulin pill were developed, it would be an incremental innovation on insulin injections,” Novartis says in its position paper. “In spite of incredible value for patients, this innovation might not be patentable in India.” The firm’s legal battle over the Gleevec patent has reached India’s Supreme Court.

At the NGO Doctors Without Borders, Leena Menghaney, the Indian coordinator of the Campaign for Access to Essential Medicines, says major drug companies are seeking to change India’s patent regime primarily because India’s generics producers export to countries that the big firms could supply themselves. India is the source of most of the NGO’s HIV drugs for African patients, and Menghaney fears that Indian firms would stop developing new HIV drugs under a different patent regime.

Major drug firms, she claims, are purposely trying to get their patents denied for the purpose of demonstrating that the Indian system is inadequate. In the case of Gleevec, Menghaney argues that the original patent predates 1995, the year that India started recognizing drug patents, and that Novartis wants to patent a later form that is only slightly improved. In its position statement, Novartis states that “the beta crystal form—the form under discussion in India—is the only form of Gleevec that Novartis has marketed worldwide.”

The advantages of changing its patent laws aren’t obvious for India. The country does have a handful of companies that are engaged in cutting-edge pharmaceutical research, but its generic drug industry is far larger.

The current patent system discourages companies from developing formulations specifically for the Indian market, Noehrenberg points out. In India, where refrigeration is often lacking, a drug formulated for heat resistance would be beneficial, he notes. Similarly, a drug that needs only to be taken once per day instead of three times could be more easily managed by government health officials. However, Noehrenberg says, such arguments fell on deaf ears in India when he was lobbying on behalf of the international pharmaceutical manufacturers federation.

The best hope for international drug companies could be trade negotiations. India originally strengthened its patent regime when it joined WTO. Earlier this year, Doctors Without Borders notes, the U.S. put India on a “trade watch” list for not adequately protecting intellectual property rights. In addition, the NGO claims, the European Union is insisting on tighter patent protection in India as part of a broader free-trade deal now under negotiation.


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