The product patent regime and India's strive for affordable medicine

184 Pages·2010·1.25 MB·English

IMAGE
united nations development programme
povErty rEductIon HIv/AIdS
and
FIvE yEArS Into tHE product pAtEnt rEGIME:
IndIA’S rESponSE

FIVE YEARS INTO THE
PRODUCT PATENT REGIME:
INDIA’S RESPONSE
Sudip Chaudhuri, Chan Park and K. M. Gopakumar
Edited by Kajal Bharadwaj
December 2010
Copyright © December 2010
United Nations Development Programme
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UNDP is the UN’s global development network, advocating for change and connecting countries to
knowledge, experience, and resources to help people build a better life.
Cover Photo: Mohammad Moniruzzaman / UNDP Picture This.
Design: Alex Majumder.
Printing: Consolidated Graphics, New York, USA.
Disclaimer:
The views expressed in this publication are those of the authors and do not necessarily represent those of
the United Nations, including UNDP, or their Member States.
ABout tHIS Study
this study was commissioned by the united nations development programme (undp) under the auspices of
the Intellectual property and Access to Medicines capacity Building Initiative, a cross-practice project between
undp’s poverty Group and the HIv/AIdS Group. the project initiated in 2004 seeks to support the building
of developing country and broader Southern capacity to sustainably access affordable HIv/AIdS drugs in the
context of the implementation of the World trade organization (Wto) Agreement on trade-related Aspects
of Intellectual property rights (trIpS) and intellectual property provisions in other trade agreements (e.g.
bilateral and regional trade arrangements). Since 2009, the project has broadened its focus in understanding
various dimensions and policy interventions to direct health innovation towards meeting long term public
health goals, including sustainable access to affordable medicines. In terms of the Millennium development
Goals (MdGs), the project aims to contribute directly to the achievement of MdGs 6 and 8 (and indirectly to
MdG 1) by seeking to facilitate a policy environment in which generic drugs will be more accessible to those
who need them, in particular poor and vulnerable populations.
the tension between the need to promote innovation and development of new healthcare technologies
(which some parties argue require higher standards of patent protection) and the promotion of sustainable
access to affordable medicines is not new — it has come to the fore in many developing countries as a result
of their implementation of certain provisions of the trIpS Agreement. developments in India have impacts
well beyond its borders, given the reliance thus far of much of the global market, especially in developing and
least developed countries (Ldcs), on the supply of low-cost, quality Indian generic pharmaceutical products.
this study is intended to be a contribution towards understanding the continued role of India as a supplier of
affordable medicines five years after having complied with the trIpS Agreement. the study analyses the role
of both the Indian pharmaceutical industry and the Indian legal system in building a post-trIpS scenario that
continue to be conducive to sourcing affordable medicines.
chapter 1 of this study (written by Sudip chaudhuri) looks at the changes in the Indian pharmaceutical industry
and the strategies adopted by surviving generic companies as well as the emergence of new originator
companies and how this could impact availability of affordable medicines. chaudhuri further analyses and
presents options available and makes recommendations for policy makers including using flexibilities under
the patent law to the fullest which may be critical to promote the revival of a robust generic industry.
chapter 2 of this study comprises two sections and analyses the response of the Indian legal system. the first
section (written by chan park) analyses whether Indian patent offices and courts of law have made full use of
flexibilities within the new patent act as well as whether they have interpreted provisions in favor of public
health. Focusing on the strict patentability criteria in the Indian law, chan additionally analyses applications
that have been granted patents in all of the patent offices in the country foreseeing possible trends and
establishes the need for continued strict interpretation of patentability criteria. In his recommendations,
chan also urges for more transparency by the patent offices.
the second section (written by K. M. Gopakumar) takes a closer look at the pharmaceutical patent applications
in India’s ‘mailbox’. the mailbox was a transitional mechanism required under trIpS that was established
to accept patent applications between 1995 and 2004. Based on databases of the mailbox applications,
medicines approved during this period for marketing both in India and the uS and their patent history,
Gopakumar examines the potential of some of the safeguards in India’s patent law to keep space for generic
competition open. He urges the strict application of the safeguards in the Indian law as well as institutional
Five years into the product patent regime: India’s response 5
ABOUT THIS STUDY
reforms and capacity building for the safeguards to be truly effective and finds that the Indian experience has
some important lessons for LDCs seeking to implement the TRIPS Agreement in the coming years.
The study has benefitted from several inputs and comments from various experts including through a
national validation meeting organized by UNDP which was attended by various stakeholders including from
the government, private sector, national experts and civil society. Initial drafts of the study benefitted from
inputs and comments provided by Tenu Avafia, Luisa Bernal, Biplove Choudhary, Kamal Malhotra, Luciana
Mermet, Savita Mullapudi Narasimhan, Cecilia Oh and Yumiko Yamamoto.
During the national validation and technical consultation meeting comments and inputs were provided by Tenu
Avafia (UNDP); Jayant Dasgupta (Economic Advisory Council, India); Arun Jha (Department of Pharmaceuticals,
India); K S Kardam (Deputy Controller of Patents and Design, India); Yogendra Kumar (Ministry of External
Affairs, India); Dinesh Abrol (NISTADS, India); Kajal Bharadwaj (national expert); Reji Joseph (RIS); Radhika Lal
(UNDP); M. Santhosh (CENTAD); Leena Menghaney (MSF); Savita Mullapudi Narasimhan (UNDP); Yogesh Pai
(CENTAD); Rathin Roy (UNDP); D G Shah (IPA); Madhukar Sinha (Center for WTO Studies) and Juliana Vallini,
(ANVISA, Brazil). Support from UNDP India Country Office in the organization of the workshop is gratefully
acknowledged, including from Deepti Handa, Alka Narang and Shashi Sudhir.
UNDP hopes that the findings of this study will be used to design appropriate policy approaches for the
consideration of different stakeholders in India, including the ministry of health, patent offices, ministry of
trade, department of industrial policy, pharmaceuticals, agrochemicals, the justice department, national
policy experts and civil society. Outside India, the findings may provide useful policy lessons for policy makers
in other developing countries seeking to balance similar tensions in policy objectives. It is hoped that this
study shall provide much needed insight into India’s continued role as a supplier of affordable medicines to
the developing world. Additionally, it can be used as an entry point towards exploring strategic south-south
cooperation mechanisms on seeking solutions for health innovation to meet human development goals.
The overall coordination and editing was facilitated by Savita Mullapudi Narasimhan.
6 Five Years into the Product Patent Regime: India’s Response
TAblE OF CONTENTS
Page Content
9 Executive Summary
19 Chapter 1: The Industry Response
the Indian pharmaceutical Industry After trIpS
by Sudip Chaudhuri
73 Chapter 2: The legal Response
73 chapter 2A: Implementation of India’s patent Law: A review of patents granted by the
Indian patent office
by Chan Park
105 chapter 2B: Landscape of pharmaceutical patent Applications in India: Implications for
Access to Medicines
by K. M. Gopakumar
121 Afterword
127 References
127 chapter 1
131 chapter 2A
132 chapter 2B
133 Annexes
list of Acronyms and Abbreviations
ActA Anti counterfeiting trade Agreement Inn International non-proprietary name
AGE Advanced Glycation End product IpAB Intellectual property Appellate Board
AndA Abbreviated new drug Application (India)
AnvISA Agência nacional de vigilância Sanitária Ldcs Least developed countries
(Brazil) MMv Medicines for Malaria venture (MMv)
ApI Active pharmaceutical Ingredient Mnc Multi national corporation
ArIpo African regional Intellectual property Mrp Maximum retail price
organization MSF Médecins Sans Frontières
Arv Anti retroviral ncE new chemical Entity
AZt zidovudine (Arv drug) ndA new drug Application
cArG compound Annual rate of Growth nME new Molecular Entity
cdrI central drug research Institute nddS normal drug delivery System
cdSco central drug Standards control nIStAdS national Institute of Science technology
organization (India) and development Studies (India)
cEntAd centre for trade and development nIpo national Intellectual property
cIpI confederation of Indian pharmaceutical organization (India)
Industries nME new Molecular Entity
cIpIH commission on Intellectual property oApI organisation Africaine de la propriété
rights, Innovation and Health (WHo) Intellectuelle
cMIE centre for Monitoring Indian Economy oSdd Indian Government’s open Source drug
crAMS contract research and Manufacturing discovery
Services pAt profit After tax
cro contract research companies pct patent co-operation treaty
cSIr council of Scientific and Industrial r&d research and development
research (India)
tdF tenofovir disoproxil Fumarate
dcGI drug controller General of India
tEG technical Expert Group on patent Law
dGcI&S directorate General of commercial Issues (India)
Intelligence and Statistics
tnMSc tamil nadu Medical Services corporation
dMF drug master file
trIpS Agreement on trade related Intellectual
Ec European commission property rights (Wto)
EFtA European Free trade Association uK united Kingdom
EMr exclusive marketing rights undp united nations development program
Epc European patent convention uS united States
Epo European patent office uSFdA united States Food and drug
Eu European union Administration
FtA Free trade Agreement uSpto united States patent and trademark
GAtt General Agreement on tariffs and trade office
GMp Good Manufacturing practices uStr united States trade representative
GSK GlaxoSmithKline WHo World Health organization
IBSA India Brazil South Africa (trilateral WIpo World Intellectual property organization
grouping) Wto World trade organization
IMpAct International Medical products Anti-
counterfeiting taskforce (WHo)
EXEcutIvE SuMMAry
“We are truly at a turning point in our response to the pandemic of HIV/AIDS. The
goal of putting three million people into treatment by the end of this year has
prompted a reservoir of hope. But for that hope to be fulfilled, generic drugs must
be available. People Living With AIDS stand poised between life and death. The
Parliament of India can make it possible for millions of people to embrace life.
Excellencies, we urge that every flexibility offered by the TRIPS Agreement be
incorporated in the President’s Patent Ordinance and that no “TRIPS-plus”
provisions are included which would jeopardize the continued supply of crucial,
affordable AIDS therapies and other essential medicines by India to the world. It
is not possible to exaggerate the international importance of the decisions facing
India.”
- Dr. Nafis Sadik and Stephen Lewis to the Indian Prime Minister and President,
11 March 2005
In 2005, the un Special Envoys of the un Secretary General on HIv/AIdS in the Asia pacific and Africa
collaborated for the very first time to write to the Indian government highlighting the importance of generic
HIv medicines from India to the achievement of universal access to treatment goals. Along with the un
Special Envoys, the world was watching closely to see how India would balance its obligation to comply with
the trIpS Agreement deadline to amend the Indian patents Act, 1970 with its role as the leading supplier of
safe, effective and affordable generic HIv medicines.
the substance of the original Indian patents Act, 1970 abolished product patent protection in pharmaceuticals
in order to ensure that medicines were available to the public at reasonable prices and was largely based on
the recommendations of a report of a commission chaired by the jurist rajagopala Ayyangar in 1959 which
stated that laws “have to be designed, with special reference to the economic conditions of the country, the
state of its scientific and technological advance, its future needs and other relevant factors…so as to minimize
if not eliminate the abuses to which a system of patent monopoly is capable of being put.”
the resulting Indian law did not provide patent protection for pharmaceutical products and as a result, India’s
generic manufacturers were able to offer triple-combination anti-retrovirals (Arvs) at a fraction of the price
being offered by patent-holding multinational pharmaceutical companies. the lack of patent barriers also
allowed Indian generic companies to manufacture fixed dose combinations of Arvs that have become the
weapon of choice in the global scale up of Arv treatment.
But to comply with trIpS, India amended her patent laws and re-introduced product patent protection in
pharmaceuticals from 1 January 2005 leading to global concerns about the continuing ability of Indian generic
companies to supply these medicines. these concerns were taken seriously by the Indian parliament, which
aware of its responsibility not only to Indians but to patients across the world adopted the only pragmatic
solution available — to utilize flexibilities available under trIpS in an attempt to secure the availability,
affordability and accessibility of medicines.
Five years into the product patent regime: India’s response 9
EXEcutIvE SuMMAry
Five years after India changed its patent regime this Study examines the impact of these safeguards on access
to medicines analyzing the impact of trIpS on the Indian pharmaceutical Industry as well as the response of
the legal system.
The Indian Pharmaceutical Industry after TRIPS, Sudip Chaudhuri
the Indian pharmaceutical industry occupies a special position among developing countries having
demonstrated strong innovation capabilities, strength in developing cost-efficient processes and significant
capacity in setting up manufacturing plants for drugs satisfying international quality norms, earning
worldwide recognition as the ‘pharmacy of the developing world’. this study examines how Indian generic
companies are responding to the new policy environment of the trIpS regime, the impact on their growth
and the fruition of the promises of the trIpS regime to deliver increased, more relevant r&d. the analysis of
the performance of the Indian pharmaceutical industry is largely based on a sample of 166 large and medium
sized Indian companies. the study explores changes in the domestic and export markets as well as in the
research and development area.
In terms of the domestic market, the study finds that Indian companies continue to maintain their dominance
though there is renewed interest from Mncs. changes in the domestic patented market are yet to take effect
fully and will be heavily influenced by the manner in which India’s amended patent law is applied. the Indian
companies are taking various responses including filing oppositions to ensure the robust application of
India’s patent law, exploring voluntary licensing, engaging in patent disputes and resisting the enforcement
of greater patent rights in order to restrict the scope of the patented market.
the domestic generic market, which comprises the bulk drugs market and the retail formulations market on
the other hand, has seen significant changes. For bulk drug manufacturers, trIpS hardly makes a difference
as they already operate in a very competitive environment and will continue to do so even after patents
expire. In the post-trIpS situation large firms that cannot initiate the manufacturing of new drugs as they did
earlier will be the most adversely affected. Anticipating the shrinkage in domestic operations due to trIpS,
Indian companies have been introducing new products and promoting these aggressively resulting in the
expansion of the retail formulations market. Market concentration is also rising with negative implications
for pricing. the market share of the top 20 companies has increased while more than half of the small-scale
pharmaceutical units operational in India have closed down in the last two years.
In terms of exports, the study finds that the export market is larger than the domestic market not only for
large companies but also for smaller companies. However, only a small number of companies have been able
to undergo the full transition to exports to regulated markets. For the larger companies, there is an increasing
interest in developed markets like the uS (which is now the largest export partner in both bulk drugs and
formulations) and their role in these markets ranges from supplying generics where patents have expired to
an increase in their own patenting practices and patent challenges. Exports to developing countries including
Ldcs is an area that will be most affected after the trIpS regime when patents are granted in India and to
utilize India’s capability and capacity for enhancing the access to essential medicines in developing countries,
compulsory licensing or other measures will be of vital importance.
10 Five years into the product patent regime: India’s response