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Mumbai: Foreign pharmaceutical firms may lose their monopoly over more than a dozen medicines in India this year unless they can prove the drugs are being manufactured locally and are available at reasonable prices.

The intellectual property office wrote in December to all drug makers that have been awarded patents in India since 2006 under an amended law, asking them for information about the working of their patents by 31 March or face a penalty of up to Rs10 lakh.

Similar notices were sent to patent holders across sectors—engineering, information technology and so on.

If the drug makers cannot show they have met their obligations within the three-year window granted to them, the office can revoke monopoly rights over patented drugs and issue compulsory licences to local manufacturers. Since most of the product patents in the drug sector started in 2006, the window is closing now.

The December notice was sent under the Patents Act, last amended in 2004 to bring Indian laws in line with the worldwide trade related intellectual property rights (TRIPS) agreement under the World Trade Organization.

An important drug likely to come under immediate scrutiny is peginterferon alfa-2a, used to treat hepatitis C. Sold by the Indian subsidiary of Swiss drug maker F Hoffmann-La Roche Ltd under the brand name Pegasys, it was the first drug to get a product patent under the new legal regime in March 2006.

Two other important medicines that will complete three years of patent protection in 2010 are erlotinib, used to treat lung cancer; and valgancyclovir, which works against the HIV infection. These are also sold by Roche, under the brand names Tarceva and Valcyte, respectively.

The Indian subsidiary of the world’s largest drug maker, Pfizer Inc., sells two drugs that were granted Indian patents in 2007 and may soon come under patent scrutiny. These are sunitinib, sold as Sutent and used for treating kidney cancer; and maraviroc, sold as Selzentry to AIDS patients.

All these drugs have been imported since they were launched in the local market soon after the patent grant. Some of them cost Rs1 lakh or more for a month’s treatment.

The Act mandates patent holders to annually inform the granting authority, among other things, whether the patented product is being imported or manufactured locally, the quantity sold, and the price.

P.H. Kurian, controller general of patents, designs and trademarks, said his office would make the information publicly available after its compilation.

This will give the “interested parties" a chance to apply for compulsory licences to produce and sell products whose patents have not been worked locally, he told Mint.

Ranjit Shahani, president of the Organisation of Pharmaceutical Producers of India (OPPI), which lobbies for foreign drug makers active in India, pointed to a loophole.

“The Patents Act does not preclude explicit terms. It is, therefore, permissible to import the patented invention," said Shahani, who is also the vice-chairman and managing director of Novartis India Ltd.

Interpreting “working" as manufacturing in India, Shahani said, would violate the TRIPS agreement, which lays down that “patent rights will be enjoyed without discrimination according to...whether products are imported or produced locally".

Roche did not respond to emailed questions. A Pfizer executive said it shared OPPI’s views on the subject.

But Dilip G. Shah, secretary general of the Indian Pharmaceutical Alliance, an industry lobby of Indian drug makers, said “working" the patent in the local market could only mean local manufacture.

“Import can be considered as working of the intellectual property right in smaller markets, as it will be unviable," he said. “But in the case of India, this provision cannot be applied. There are about 17 to 18 drugs, the so-called new chemical entities, under patent protection in India."

Shamnad Basheer, a professor of intellectual property law at the National University of Juridical Sciences, Kolkata, said the Patents Act stipulated that a patent cannot be used merely to enjoy a monopoly.

India could argue its regime is geared towards creating employment and facilitating technology transfer. By importing drugs, drug makers are denying this to the country, he said.

The accessibility of patented drugs is another contentious issue. In 2008, the Delhi high court ruled in favour of India’s generic drug maker Cipla Ltd selling a copycat version of Roche’s patented erlotinib (Tarceva), saying it enhanced patients’ access to the drug.

OPPI director general Tapan Ray said only 35% of Indians had access to modern medicines, against 85% in China and 43% even in Africa.

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