Everyone related to the pharmaceutical industry, whether it is corporate innovators and generic industry, multinational companies and domestic sectors, member-nations and NGOs, analysts and practitioners, investors, inventors and entrepreneurs and academic researchers, would agree that patent scenario, globally as well as nationally, has become most dynamic and extensively debated in the post TRIPs regime of globalization and harmonization.
However, looking back to 70s will give a picture of what a not so sophisticated patent regime has done to the Indian pharmaceutical industry. In 1970, the 'shifting patent environment' was strictly restricted to India and the domestic patent Act. Pursuant to this, many multinational (MNC) pharma companies walked out of India in protest. No patent applications were filed in India in the 70s to early 90s, as an expression of dissent (also due to non-patentability of products and the 'licence of right' provision). The period also saw phase wise shut down of research centers established in the country. However, notwithstanding all this developments, the Indian pharmaceutical industry has grown by leaps and bounds between 1970 and 2007.
The transformation of General Agreement on Tariffs and Trade (GATT) to World Trade Organisation (WTO) and the birth of Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) through WTO brought in major challenges and uncertainties. The harmonization of intellectual property (IP) regulations, including product patents in all fields through TRIPs, prompted sweeping amendments to the domestic patent Act. The consequences of TRIPs were expected to be 'devastating' for Indian pharma industry, if the predictions of 'devils advocates' in the 90s were to be believed.
Harmonizing IP laws, especially patent laws, through TRIPs resulted in a few changes and transformations in the Indian pharma industry. First and foremost, it became imperative for all serious pharma players to learn and practice the nuances of TRIPs and international patent laws. The intense integration of regulatory affairs with patents in the international markets of commercial interest forced the pharma entrepreneurs to follow global systems and practices. This helped India to create awareness programs and patent proficiency, building up talent pool in patent laws. In the government circles and bureaucratic corridors, the much needed and long felt negotiation skills and IP literacy also emerged in the meantime, thanks to keen interest and commitment to protect national and sovereign interests within available flexibilities.
While the MNC lawyers, who helped to incorporate intellectual property rights into GATT and transform GATT to WTO, expected to reap rich rewards, create dissidents by spearheading the 'patent all' and 'evergreen' culture into third world countries and economically dominate the developing and least developed countries, are probably repenting that they brought the 'intelligentsia' of the developing countries into the 'patent bandwagon'. Post WTO/TRIPs, the developments in the global patent systems were slow in the 90s and early days of the millennium. However, the pace of development has picked up to globalize the 'flexibilities in the TRIPs', which were opted by the developing countries initially and are now finding acceptance even in the developed countries, for balancing the rights of patentees with social and research obligations.
India was being labeled prior to 1995 as 'pirates' and 'reverse engineering experts'. The patent systems, which got reviewed and rightly evaluated post-TRIPs by countries like India, Brazil and others are getting 'reverse-engineered' to be adopted even by EU and USA, to control the ever-increasing hunger for 'evergreening' and enforcement of frivolous patents through excessive threats and litigations.
The excellent beginning made by the Chennai High Court, delivering a well-analyzed and world-class judgement on 'Gleevec' has also set a trend for patent jurisprudence in India. The learned counsels who argued on both sides and the Lordships of the Bench, demonstrated to the world that India could hear vexed patent disputes and deliver classic landmark judgements, which could stand review and scrutiny worldwide. The adoption of the principle of 'efficacy' in chemicals, to be used as medicines, is now commonplace in EU, Japan and PCT. It is probably difficult for anyone to find a safe haven or safe harbor anymore and escape from the need to provide proof of efficacy for a drug molecule (NCE), with USA itself adopting amendments to 35 USC as recently notified by the Federal Register (to be effective November 1st 2007) and also the impending Patent Reforms Act, 2007 in USA.
At this crucial juncture, the important questions are:
■ Is patent regime in India emerging to be strong in fundamentals through enforcement?
■ How is this trend likely to aid a robust growth of Indian pharma?
Substantive patent provisions have their base in Article 7, 8, 27, 30 and 31 of TRIPs. While the liberal approach to enforcement of patentee rights have been the trend in Europe and US for nearly a century, post-TRIPs these countries have seen broader participation in the debates and disputes. The third world sovereign nations, civil societies and NGOs and even patent professionals, who are keen to see a balanced and fair enforcement of patent rights, have been contributing increasingly to the debate on controlling abuse of monopoly rights in 'evergreening' and anti-consumer practices.
The newly emerged patent-debate forum has impacted the approach of jury even in US Supreme Court and the US Court of Appeal in Federal Circuit (CAFC). Judgements such as Amlodipine Case (CAFC), Case No.2006-1261 and Teleflex vs. KSR (S.C.), Case No.04-1350 by US SC/FC have been hailed worldwide (not so much welcomed in USA itself, though) as people-friendly and generic-friendly. At least for a moment, it was felt that inspired by the above judgements the US Federal Trade Commission (FTC) was recommending to USPTO and other agencies to control the 'evergreening' and unfair abuse of patent system.
These verdicts may possibly become the law, find base in the Manual of Patent Examination Procedure (MPEP) and act as guidelines to District Court patent judgements. However, a recent District Court judgement has succeeded to support the patentee, successfully explaining the non-relevance of the CAFC/SC judgements.
Takeda vs. Alphapham, no. 2006-1329 (Fed Cir. 2007)
This case appears to strengthen a feeling that patent related judgements may still continue to be delivered on a case-to-case basis. The recent (August 20, 2007) CAFC Federal Circuit judgement in the interference proceedings on Frazer vs. Schlegel (2006-1154 - interference no. 104,776), US courts acknowledged the overseas 'priority dates' to have relevance and supremacy over 'US first filings'.
The trends in Para IV challenges, 180 day exclusivities, authorized generics, self-generics, patent delistings, prior settlements, pay offs and trade-offs, pre-emptive and pre-negotiated patent suits have all taken centre-stage in USA, consequent to low key new drug (NCE/IND/NDA) pipelines coupled with the anticipated large patent expiries. India who is emerging as a major - the single largest - generic source, cannot remain insulated from these developments in USA.
The most interesting scenario to watch in US patent domain in next five to ten years will be the rush to work through or invalidate the plethora of subsidiary RLD (Orange Book listed) patents on new use/method of treatments. It will also take into account consequent pressures on innovator assignees/ licencees to negotiate heavily to 'keep the wolves at bay' till the regular expiry date of the patent, including pediatric and hatch-waxman patent term extensions and patent term adjustments.
While these exciting developments are in progress in USA, Europe has by and large been unidirectional in the post-TRIPs patent regime. Patent grants, patent infringement suits and patentability criteria have been moving towards curbing abuses and 'evergreening' in the region. The US Bolar type research exemption for pharma has been introduced in Europe in November 2005. The Supplementary Protection Certificate (SPC) provision has also been tightened to prevent prolific 'evergreening' in regulatory protections. This has helped Indian EDQM/European regulatory approved pharma companies to enter Europe faster, even though the expected 'exclusivity' period still hurts the generic introductions in some cases.
Post-Doha declaration, especially with reference to Para 6, the aspirations of LDC nations and developing countries with insufficient domestic pharma operations had zoomed sky-high. However, subsequent interpretations and procedural operational hurdles had made it a 'heptathlon' (hurdle) race. Consequently, member-nations have commenced to grant compulsory licences or exemptions to grant permissions to import patented medicines from parallel sources, specifically with reference to anti-retroviral drugs, from third world countries, where such products are legally and legitimately manufactured under regulatory approvals. In these third world countries, the patent act provisions permit 'Doha Para-6' type exportations against overseas compulsory licences.
The current trends are increasingly impacting extended and extra-effective protection to new and me-too drugs. An area where innovation-based pharma corporations have achieved reasonable success is from a relatively unexpected corner. While incorporating the data protection (exclusivity?) clause in Article 39(3) of TRIPs, even the most optimistic would not have expected to increasingly fall back on 'data exclusivity' provisions to strengthen patent-type regulatory based protection to new pharmaceutical market introductions.
Though data exclusivity has become integral part of all bilateral negotiations post-2000, even the developed countries, semi-developed, industrialized and developing countries are debating and considering additional extension to the data exclusivity period, from 5 or 6 years to 10 or even more years. It varies from country to country based on the currently existing time frame. Post 'Gleevec', Sec.3 (d) disputes in IPAB, Chennai High Court and Supreme Court and the Mashelkar Committee Report 'data exclusivity' has become the single-most subject of highest-level negotiations and tradeoffs. The heat and dust seem to be settling down to give a sign of a little relief, at least for the domestic pharma industry.
Indian patent & pharma scenario
Post-independence Indian government has been fighting a two-pronged battle. The objectives of this two-pronged war were poverty alleviation and industrialization. The government desperately wanted to improve the living conditions of its citizens and industrialize the nation to attain self-sufficiency. While the government has succeeded in the latter to a great extent, including giving an impetus to pharma industry growth, much need to be done to achieve the former objective. The country's and it's pharma industry's march to the global forefront would succeed, only if the government and the industry join hands to tackle 'healthcare' issues at home, including extending the reach and depth of healthcare related service to the backward areas and improve 'affordability and accessibility' issues with due diligence.
Indian pharma industry appears to be heading for one of the toughest times in next 5 to 10 years. While the 'doomsday' predictors of yesteryears seem to have taken a back set and most of the 'kite flying' predictors of the pharma colonialism days have calmed down, time has come to caution the policymakers and law makers in general and pharma regulations in particular, that time has come to burn the 'midnight' oil to salvage the predominantly domestic pharma industry from the turmoil and tribulations, which may impact it in next couple of years. If we fail here, we will fail forever, as the transformation may otherwise be irreversible under the weight and burden of global treaties and agreements.
The "Gleevec" judgement from Chennai High Court must not bring in a sense of legal complacency. The country's patents Act 1970 still needs to be fine-tuned and made legally and logically sound. An urgent review of the parliament-drafted patent amendments to bring them at par with legal expectations is called for. The ambiguities, which are likely to lead to judicial interpretations contrary to the objectives of the law makers, may need corrections, rectifications or eliminations for reinforcing the desired objectives to prevent 'evergreening', soften the impact of over-litigations and monopoly-abuses and to ward off challenges to legitimacy of well-intended provisos.
In the meantime, the domestic pharma could best emulate newer global trends and develop positive mindsets to work together, share innovative merits and preserve litigation expenses to improve R&D efforts and innovation productivities. Pro-active innovative approach is the only 'mantra' for Indian pharma's success in the post-2005 scenario. Current style of 'inward looking' management will need to be replaced by a networking and open-minded approach and overlook.
Data exclusivity
In the context of increasing pressures of bilateral negotiations and trade offs, some form of data exclusivity is bound to emerge in place sooner or later. This may come more as a 'trade-of' 'quid pro quo'. It is better to continue the debate on elements of Art. 39.3 of TRIPs, such as unfair commercial use, term (effective date and period), considerable effort, reliance, other data, new chemical entities and protect the public and come out with data exclusivity provisions, which incorporates a common priority date, disincentives for delayed market entry, exceptions for compulsory licences including Doha Para 6 type (Sec.92-A) exports against overseas indents and limiting to truly new chemical entities (NCEs). A definite trend in Indian pharma in coming years, will be substantial increase in voluntary licences to ward off the otherwise unavoidable 'evil' (?) of compulsory licences.
To attain new highs the Indian pharma has to do a lot of homework, with introspection. The domestic restrictions of National Pharmaceutical Pricing Authority's (NPPA) extended and stricter price control may help the smaller (SME) pharma companies and those who are solely engaged in domestic operations to continue to earn their meager profits on large volumes. The US FDA, EDQM and other prestigious global regulatory approvals, DMFs, ANDAs and the like are fast loosing the glitter and glamour. The days may not be too far when the very same Indian pharma companies who are all rushing into US markets, may start looking for greener pastures, due to overcrowding in US generics and consequent erosion in expected high returns. Strategies will need to be devised to find long term solutions to overcome this likely scenario.
(The author is CEO of GNA Patent Gurukul & Gopakumar Nair Associates, Mumbai.)