Parnil Urdhwareshe
India?s generics landscape has been very eventful over the past few months and the world is paying close attention to its generics medicine chest. Consequently, India is facing problems of perception, and while it is important to learn from the opposition, there is still reason to keep the faith.
In March this year, the Intellectual Property Appellate Board (IPAB) granted Natco a compulsory licence to manufacture a generic version of Bayer?s anti-cancer drug Nexavar, when it was found that the drug was not sufficiently available in India. In April, the Supreme Court denied Novartis a patent on what Novartis claimed was a new, beta-crystalline form of its blockbuster anti-cancer drug Imatinib Mesylate, for lacking any enhancement in ?therapeutic efficacy?. More recently, Indian generics giant Ranbaxy paid $500 million in fines and settlements for having violated American drug safety regulations and while the case did not involve Indian IPR laws, India?s generics industry was once again under fire.
These decisions, which have polarised public opinion, have been praised for balancing patients and patent protection but have also been criticised as being protectionist and innovation destroying. Often, Ranbaxy?s transgressions are raised as proof of the damage that India?s allegedly weak regulation is causing. This year?s 301 Report prepared by the US Trade Representative to identify trade barriers is but one example, which claims that the Novartis and Bayer decisions ?? raised serious questions about the innovation climate in India?.
The apex court stated that the Novartis decision is not against incremental invention; it distinguishes between incremental invention and ?evergreening??minor modifications in existing products made to obtain prolonged patent monopoly. Novartis was not granted a patent because, among other things, it was unable to prove that the new crystalline form of Imatinib was more therapeutically effective. Our patent laws do not allow patents on ?new forms of known substances? without ?enhancement of known efficacy?. The case was a landmark because the Supreme Court determined ?efficacy? to mean ?therapeutic efficacy? in case of medicine and so sought to prevent the practice of ever-greening.
It is also certainly not against innovation. The subject of the Novartis case was not a new drug. It was an old one that could not be proven to be more effective in a new form. It would not be wrong to say that, if anything, the decision was against anti-innovation practices such as evergreening and while the United States objects to the decisions, it seems to have had similar positions on evergreening itself. The US President?s Plan for Economic Growth and Deficit Reduction, released by the White House in September 2011, sought to use Medicaid to prohibit market exclusivity for ?minor changes in product formulations? for generic biologics. It explicitly called such objectionable practices ?evergreening?.
In the Natco case, the compulsory licence granted to Natco was also in line with the Doha ?Declaration on the TRIPS agreement and public health.? Under the declaration, the TRIPS agreement is to be interpreted in a manner that promotes access to medicines. The compulsory licensing provisions were invoked when Bayer couldn?t make the drug widely available and prior negotiations with Bayer for a licence failed. It is also important to remember that while Natco was given a compulsory licence, the IPAB increased the royalty that Bayer received.
It is important to step back and understand that the Novartis decision does not ?destroy innovation? and that India is not anti-innovation. But perceptions are tremendously important and are not shaping up in India?s favour.
For one, our pharmaceutical industry?s reputation for piggybacking on the innovations and research of others is becoming further entrenched, and the compulsory licence granted to Natco hasn?t helped in this regard. And while it is argued that the Novartis decision will lead to more R&D and innovation in the absence of evergreening, whether such R&D will take place in India is doubtful. Pharmaceuticals barely invest in India when it comes to R&D?the number is pegged at less than 1% of the global total.
The combined signalling effect of the perceived ambiguity on standards, pricing, poor regulation and patent and litigation backlogs add up to a discouraging image.
Part of this is attributable to the undefined terms used in our patent laws. Both the Novartis case and the Natco case revolved around the meaning of undefined terms used in the Indian Patent Act. Where our laws are balanced and effective, the lack of definitional certainty makes them unpredictable. One reason for this could be the limited time in which the Parliament had to pass the amendment to the Patents Act in 2005, hurriedly drafted to bring India?s patent laws in compliance with the provisions of the TRIPS Agreement in order to fulfil the requirements for India?s membership to the WTO.
As India continues to evolve towards a patent regime that attempts to better balance patients with patent protection, negative perceptions and opposition are inevitable. While it is important to learn from such opposition, the spirit that India?s IPR regime is beginning to embody should not be abandoned.
The author is an intern with the Indian Council for Research on International Economic Relations and a student at the National Law Institute University, Bhopal
