Business Today

Patent Spotlight

Manasi Mithel | Print Edition: March 18, 2012

More than 80 per cent of affordable medicines used to combat HIV , the virus that causes acquired immunodeficiency syndrome (AIDS), in developing countries comes from India.

Home to the highest concentration of makers of generic drugs, the country has been a global source of cheap medicines. Generic medicines are copies of drugs or brand name counterparts originally innovated by other companies.

The epithet of an 'affordable drug source' - for medicines for AIDS to cancer to cardiac ailments - could come up for closer scrutiny depending on the fallout of the case in the Supreme Court of Novartis versus Union of India, Cancer Patients Aid Association and others, the final hearing of which is set for March.

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The case follows Swiss MNC Novartis moving the Supreme Court challenging the grounds on which its patent application was rejected under the Indian Patent Law by the Indian Patent Office for its cancer drug, Glivec.

The medicine, with global sales of some $4.7 billion (Rs 23,500 crore) in 2011 for the Swiss drugmaker, has tested India's patent laws like no other drug. Novartis says the latest version of the drug increases drug efficacy by 30 per cent but rivals say the basic drug molecule, imatinib mesylate, was patented in the early 1990s and therefore does not qualify for patent protection under a law that came into force in 2005.

The country's patent tribunal had rejected protection to the drug, used to fight leukaemia and stomach tumours, on the grounds that it is not compatible with patent laws.

Glivec enjoys patent protection in over 40 other countries. The drug is available in India for Rs 1 lakh for a one month therapy; patients typically may need it for five or six years if not more.

The company claims bulk of it is made available either free or at a hugely subsidised price. A generic version of glivec, sold by Hyderabad's Natco Pharma and branded veenat, launched before Indian law changed in 2005, sells for around Rs 7,500 for a one month therapy.

Niche cancer drugs by other multinationals, including some non patented, are in the similar price range. Roche, a leading player in the oncology space, for instance, which recently cut down the price of herceptin, a medication used in breast cancer treatment, still sells it for under Rs 1 lakh per vial and the total treatment, depending on the dose and severity, could cost close to Rs 15 lakh.

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The hearing in the Novartis case may last for days, if not weeks, giving everyone enough time to chew over some critical questions.

Will India change the way it grants pharmaceutical patents? Will it redefine the parameters on which a patent is to be granted? Will access to affordable medicines become more difficult? Or, in the least, will drug MNCs get the clarity they have been seeking?

At a broad level, little or nothing has drastically changed on the Indian pharma landscape since 2005, when the country switched to a 'product patent regime' that allows patent protection to individual medicines instead of limiting rights of patent holders to protection over the process used to make the drug. The earlier 'process patent' was porous and it was easy to develop copycat drugs with minor tweaks to the manufacturing process.

There has been the argument that India is gradually seeing the entry of monopoly drugs at prices that the average Indian may not afford. In a November 2011 working paper, Sudip Chaudhuri, a professor at Indian Institute of Management Calcutta, has analysed what he calls "The MNC behaviour after the re-introduction of product patents in India".

He says: "Between 1995, when India signed the TRIPS agreement and 2010, 180 new drugs have come into India, of these 33 have MNC monopoly, meaning sold by only one MNC company and many of them are lifesaving and expensive."

He expects this number to increase as many others are under patent and are in the process of getting marketing approvals. (TRIPS refers to the Trade Related Aspects of Intellectual Property Rights global agreement sealed in 1994.)

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Indian generic drugmakers argue that the government is doing little to deal with the issue of access to affordable medicines. "We are in a sense selling our soul to the multinationals as we are likely to see many lifesaving drugs that are outside the price control coming into India.

This has already started as we are seeing monopoly drugs entering India and there will be many more by 2015," says Y.K. Hamied, Chairman and Managing Director of Cipla, among India's top three drugmakers. Hamied, a longtime critic of monopoly by drug MNCs, expects the situation to get even worse in terms of access to low-cost medicines.

"What is even more disturbing is the India-EU free trade agreement. What they want is not TRIPS but TRIPS Plus," he says.

The only way out for India, says the Cipla chairman, is to put in place 'a pragmatic compulsory licensing policy' that would allow a company to copy any drug and pay the patent holder a royalty of, say, four per cent. India today has a compulsory licensing clause but the procedure is long-winded and domestic drugmakers complain little comes of it.

Such arguments focus on affordable drugs access for 800 million Indians who live on incomes of less than Rs 3,000 a month. But they do not adequately address how Big Pharma companies that spend billions of dollars on develop a new drug will recoup investments.

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The lucrative upside before generic drug makers under compulsory licensing is also glossed over in such opinions. MNCs say they have channels open to ensure affordable delivery of their patented drugs, sometimes even free of cost, to the needy.

Novartis's GIPAP - short for Glivec International Patient Assistance Program - has distributed glivec medication valued at more than $1.7 billion to patients prescribed the drug since the programme started in late 2002, the company claims. Roche runs a women's cancer initiative called Prayas to provide better access to its herceptin drug for women below the poverty line.

"The argument that there is a flood of monopoly drugs entering the country is not true," insists Kewal Handa, Managing Director, Pfizer Ltd, the Indian unit of the world's biggest drugmaker by sales.

"In fact, in the last seven years, only 14 patented drugs have entered India and they have a market share of only around 0.05 per cent."

Others also point to how MNCs are pricing their drugs lower in India. Merck & Co., for instance, sells its diabetes drug januvia in India at a price much lower than its US market price.

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