Speaking of “high-priced patented drugs”, we will always spontaneously think of India’s “inexpensive drugs” and envy their frequent compulsory licensing/invalidation/rejection of drug patents. However, what a transient process has India experienced in its broad “indulgence” of drugs? Is it a history necessity or over-protection? Should China learn to adopt? What are the pros and cons? Please read this article.
1. Let’s first understand the development process of Indian patent law
In chronological order, Indian patent protection system has mainly gone through the following five stages:
In the first stage (1911~1970), the Patent and Design Act promulgated by England in the colonial period, which not only protected the process patent for the drug production process, but also protected the drug patent. As a result, more than 99% of drug patents and nearly 90% of drug supply in India are controlled by multinational pharmaceutical companies, and there are very few local pharmaceutical companies in India, leading to a stubbornly high drug price.
In the second stage (1970~1995), the first Patents Act was promulgated after the founding the country. The law stipulated that the process patent of drugs shall be protected, and the protection of product was cancelled. As a result, Indian pharmaceutical enterprises are free to copy high-priced patented drugs developed by multinational pharmaceutical companies without fear of infringement.
In the third stage (1995~2002), India joined the WTO in 1995 and signed the TRIPS Agreement (member states must include drugs and their production processes in the scope of patent protection). For this purpose, India amended the Patents Act in 2005 to re-protect the product patent of drugs.
In the fourth stage (2002~2005), the tightening of the patent system poses a great threat to the accessibility of medicines to the public. In order to balance the contradiction between the patent of drugs and the national public interest, India has re-stipulated the compulsory license of drugs according to the Doha Declaration. As a consequence, Indian generic drugs under compulsory license can be exported to regions and countries without the corresponding production capacity.
In the fifth stage (2005 to present), after the formation of the compulsory licensing system for drug patents, India has applied compulsory licenses for patented anti-cancer drugs for several times to speed up the rapid launch of inexpensive anti-cancer generic drugs. As a result, multinational pharmaceutical enterprises have been forced to reduce the drug prices for many times, thereby achieving a balance between drug patents and the public interest of the country, and improving the accessibility of drugs.
2. Amendments to patent acts of India
In September 1970, the Indian government promulgated the Patents Act, which came into force in April 1972 (PS: This law is considered as the foundation of modern Indian patent law). The Patents Act was amended for the first time in 1999, and the Designs Act was promulgated in 2000. The Patents Act was amended again in 2002 and in 2005.
PS: India amended the Copyright Act in 1994 to protect computer software as written works, and gave a detailed description of the acts and penalties of software piracy. According to the new Copyright Act, any use of pirated software will be severely punished, and the use of illegally copied computer software will be sentenced to 7 days to 3 years’ imprisonment and a fine of 55,000 to 20 million rupees. The Copyright Act of India has even been called one of the “severest copyright laws in the world”. Therefore, many scholars discuss India’s Patents Act and Copyright Act as a paradox.
3. Examination and approval of patents in India
According to the statistics of the World Intellectual Property Organization in March 2015, the total number of applications for patents for invention in India in 2013 was 43,031, and the number of design patents was 8,497. Although the number is far less than 825,136 pieces of application for patents for invention and 659,563 pieces of application for design patents in the same period in China (China has strongly encouraged patent applications since 2000), the number of patent applications ranked top among countries with statistical data.
The above applications included 10,669 applications submitted by Indian residents/enterprises and 32,362 applications submitted by foreign residents/enterprises, as well as 1,320 PCT applications. In India, the number of foreign patent applications is nearly three times that of its domestic applications. According to the statistics of the World Intellectual Property Organization, India ranks 6th in the total number of foreign patent applications of all countries, which show the attractiveness of its market to foreign enterprises. As of 2013, the number of valid patents for invention in India reached 45,103.
The efficiency of patent examination and approval in India is not high and there are always many applications to be approved. This can be clearly reflected from the ratio of application for authorization and the ratio of pending authorization. In 2013, the Intellectual Property India had 30,988 patents under examination, with 141,659 pending applications. In 2013, the Intellectual Property India authorized only 3,377 applications, with a ratio of application for authorization about 13 to 1 and a ratio of pending authorization about 51 to 1. The time for patent authorization is about 4 years from the date of requesting substantive examination.
4. Patents Act of India: Compulsory license/nullity of a patent
As stressed in India’s Patents Act, “the formulation of patent granting standards, the issuance of compulsory licenses, and the use of objection procedures before and after the granting by the government of a country are all important flexibility measures for safeguarding public health, and conform to the Agreement on Trade-related Aspects of Intellectual Property Rights.”
Moreover, India is not the only country that has issued compulsory licenses for drugs. Many other countries, including Brazil, Ecuador, Eritrea, Ghana, Indonesia, Malaysia, Mozambique, Thailand and Zambia, have issued compulsory licenses to ensure the accessibility to inexpensive drugs and meet the public health needs.
In addition, Indian companies have lobbied the government to keep a clause that stipulates the raising of objection in the amended Patents Act. In other words, any company or individual can raise an objection to the nullity of a patent proposed by the Indian patent examination authority. By this rule, Indian pharmaceutical enterprises filed numerous objection requisitions, making patents of foreign pharmaceutical enterprises ineffective in India.
5. India’s first compulsory license-”Sorafenib Tosylate Tablets”
India’s first compulsory license was imposed on the “Sorafenib Tosylate Tablets”.
Bayer, a well-known pharmaceutical company, developed a multi-target drug called Sorafenib, which is mainly used for treating advanced renal cancer. In 2008, the drug was patented in India, but the monthly treatment cost was as high as USD 5,700, which was obviously unaffordable for Indians with an average annual income of about USD 1,000. NATCO, an Indian company producing generic drugs, found through statistics that the quantity of the drug provided by Bayer only met the needs of 1-2% of patients in India. As a result, NATCO wrote to Bayer in 2010 to express its willingness to obtain Bayer’s voluntary license on the basis of reasonable terms and conditions, but Bayer refused. NATCO then applied to the Intellectual Property India for compulsory license.
On August 9, 2011, NATCO submitted preliminary evidence to the Intellectual Property India to prove that the patented drugs provided by Bayer did not meet the needs of the Indian people, that the price was far beyond the public’s affordability, and that Bayer did not produce the drug in India but provided the drug through import. On the same day, the Intellectual Property India accepted NATCO’s application and published the letter of application on its bulletin, and meanwhile NATCO provided Bayer with a copy of the application. On November 18 of the same year, Bayer submitted an objection application to the Intellectual Property India. On January 13, 2012, the Intellectual Property India held a hearing to listen to the facts and reasons stated by both parties. Based on the fact that Bayer did not price the drug on the principle of availability and affordability and could not guarantee sufficient and sustainable supply of the drug in India, the Intellectual Property India made a decision on March 9, 2012 to grant NATCO a compulsory license.
Bayer filed an appeal to the Intellectual Property Appellate Board (IPAB) on May 4, 2012 against the compulsory license decision made by the Intellectual Property India, but the appeal was rejected. According to the compulsory license decision of the Intellectual Property India, NATCO can produce and sell the drug in India before the expiration of Sorafenib’s patent in 2020. In addition, the Intellectual Property India has also made the following regulations on NATCO: 1) The price of the drug should not exceed USD 176 per box; 2) Relevant records including sales accounts should be kept and sales details should be reported to the Intellectual Property India and licensor quarterly. 3) 6% of net sales must be paid as license fee; 4) The drug must be provided free of charge to 600 patients who need it and meet the requirements every year. Judging from the implementation effect, the price of Sorafenib dropped 97% after India imposed compulsory licensing, greatly increasing the availability of the drug.
6. “Tarceva”: Complicated process /failed to escape
Tarceva (Erlotinib Hydrochloride Tablets) is a tyrosine kinase inhibitor for epidermal growth factor receptors produced by Roche Pharmaceuticals Ltd. In recent years, Tarceva has been approved to be a drug for the treatment of EGFR-positive lung cancer and other cancers. In 2006, Roche introduced erlotinib tablets to India under the brand name Tarceva. In February 2007, Roche obtained the patent licensing for erlotinib N-(3-ethynylphenyl)-6,7-bis-(2-methoxyethoxy)-4-quinolinamine hydrochloride in India. Since Erlotinib can be used in the treatment of a variety of cancers, in January 2006, Cipla showed its interest in selling ERLOCIP under research and development, the generic drug of Erlotinib. In January 2008, ERLOCIP appeared on the market.
Later, Roche sued Cipla for patent infringement and hoped to issue an interim injunction to prevent Cipla from producing, selling and exporting Tarceva’s generic drug ERLOCIP. Cipla filed a counterclaim that Roche’s patent was invalid. The High Court of New Delhi refused to issue an injunction against ERLOCIP on the grounds of public interest, and rejected Cipla’s request for nullity of Roche’s patent. Roche then lodged an appeal. On September 7, 2012, the Indian court rejected Roche’s patent infringement lawsuit against the patent for Tarceva after dozens of hearings held in four years. The court held that Roche’s main claim was that the compound itself was erlotinib hydrochloride (described by chemical formula), and the claim did not cover the polymorphic special variants. Roche sells special forms of erlotinib (polymorphs A and B), while ERLOCIP sold by Cipla is only polymorph B. Thus, Cipla’s selling of ERLOCIP did not constitute an infringement.
7. “Gleevec”: Rejected
In addition to related compulsory licenses and nullity of a patent mentioned above, India has rejected and unauthorized most potentially price-soaring patented drugs determined by foreign countries. The most typical one is the rejection of the patent application for the Gleevec β- crystalline type.
Gleevec (Imatinib Mesylate) is a leukemia drug developed by Swiss pharmaceutical giant Novartis. In 1998, Novartis submitted the patent application for imatinib mesylate β crystalline type to the Intellectual Property India, which was then rejected in January 2006, because the application failed to reach the standard of novelty and non-obviousness. Therefore, Novartis appealed to the High Court and the case was transferred to the Appeal Board. The Appeal Board made a ruling in June 2009, revising the statement of the Intellectual Property India on the novelty and non-obviousness of its ingredient in its field. However, it rejected Novartis’s application on the grounds that the medicine was not a new substance but an improvement of the known compound, and Novartis failed to prove a significant increase in the curative effect. Later, according to Article 136 of the Constitution of the Republic of India, Novartis then appealed to the Supreme Court through a Petition for Special Consideration, accusing that the Intellectual Property India of violating WTO patent rules and infringing its own interests.
On April 1, 2013, India’s Supreme Court rejected Novartis’s requ
request for patent protection on β crystalline type of imatinib mesylate, on the grounds that the substance patented by Novartis was a known substance and was not qualified for acquiring the invention patent for its not conforming to the regulations prescribed in the patent law in India. In addition, the Supreme Court also examined the difference in curative effects between the β crystalline type of imatinib mesylate and imatinib or imatinib mesylate, and no significant difference was found. Finally, the application ended up with being rejected.
8. So, how do people in this field think of the case?
Most extant things could initiate views on their pros and cons. The “connivance” attitude adopted by India towards drugs produces the significant positive effects: the price of drugs has dropped dramatically and the drugs are available for more people; local enterprises have been trained in imitating the technology and completed the preliminary industrial accumulation.
However, when there are beneficiary, there are also people suffering the interest loss: some patented drugs are prohibited from entering India; international regulatory authorities have stepped up supervision of generic drug companies producing unauthorized drugs from India; the international community rebukes this kind of trend; the innovation capability in India is not able to be improved, etc. Therefore, in response to the above-mentioned problems, although “life is greater than the destiny”, China shall take rational actions when facing with the high-priced drugs... at least for a person in this circle, one should still have certain discrimination ability!
Reference:
1. Official website of Intellectual Property India: HTTP://WWW.IPINDIA.NIC.IN/
2. Research on compulsory licensing system for drug patents in india. CNKI.2018
3. Brief discussion on patent application and interests protection in India. CNKI.2015
Park WeiChart