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Business News/ Opinion / Rampant evergreening in Indian pharma industry

Rampant evergreening in Indian pharma industry

Pharmaceutical companies commonly used legal argument, as opposed to demonstrating proof of therapeutic efficacy, to overcome anti-evergreening objections

Every new drug in the marketplace has a long history leading up to its appearance on the countertop at your local pharmacist. Photo: BloombergPremium
Every new drug in the marketplace has a long history leading up to its appearance on the countertop at your local pharmacist. Photo: Bloomberg

India has been at the forefront of developing an alternative model of patent law which many developing countries have since emulated. A key highlight in the Indian law is Section 3(d) of The Patents Act, 1970, which was introduced in 2005 as a yardstick to distinguish real innovation from trivial tweaks. Section 3(d) was instrumental in the Indian Patent Office (IPO) rejecting the patent for Novartis’ drug Glivec (imatinib mesylate). Its constitutional validity was challenged and upheld before the Madras high court. The decision rejecting the patent for Glivec was upheld by the Intellectual Property Appellate Board (IPAB) and later by the Supreme Court in 2013. Though the law with regard to anti-evergreening, upheld and clarified by Indian courts, remains in the books, its application by the IPO has been far from satisfactory.

Every new drug in the marketplace has a long history leading up to its appearance on the countertop at your local pharmacist. The first step that pharmaceutical corporations take on discovering an entirely new drug is to secure intellectual property rights for it in the form of a patent. A primary patent, covering a new molecular/chemical entity, rewards innovation with a free reign over the marketplace for a period of 20 years, which is the term of the patent. However, this also sets the clock ticking, since innovators need to reap the fruits of their inventive labour and maximize revenue within this period.

Once this expires, generics enter the fray with cheaper versions and compete in this lucrative marketplace to drive prices down. One would expect innovators to do what they do best—innovate—going back to cranking out the next life-saving drug. This entails going through an entire cycle of discovery, clinical trials, marketing and distribution, replete with the risk of failure at every step— since the vast majority of discovered drugs don’t make it to market.

The convenient alternative for corporations would be to extend the existing exclusivity in the market as long as possible, fending off the arrival of generics. Since it is not possible to extend the term of the initial patent filed, this requires creative alternatives. Innovators instead seek to reset the 20-year clock by subsequently filing patents that are minor variants of the parent compound, called secondary patents. This practice, known as evergreening, allows a prolonged monopoly that unfairly denies the public access to medicines at equitable prices. Such variants to previously known drugs are usually arrived at as a manner of routine experimentation in the pharmaceutical sciences, and hence may not be truly innovative. Nevertheless, they might still hold tremendous value if they demonstrate a relative improvement in some properties over their antecedent. Different countries hold up patent applications for such innovation to differing standards.

Section 3(d) of The Patents Act, 1970 in India was an innovation in its own right, albeit one in law, which deals specifically with such inventions. The statute clearly defines the standard for follow-on patents on drugs as one of therapeutic efficacy, where applicants may need to supply some clinical evidence. This standard was tested and upheld by the Supreme Court in a landmark decision in 2013 involving a patent application for Novartis’ anti-cancer drug Glivec. This was heralded by many as an example of India leading the charge on curbing evergreening, thereby safeguarding its access to public health.

Despite such measures, we discovered that evergreening practices may be rampant in India, based on a study of about 2,300 patents for drugs granted between 2009 and 2016. In our study titled Pharmaceutical Patent Grants In India, we have shown that the IPO could be operating with an error rate as high as 72% for secondary patents, despite provisions to keep them in check. Secondary patents granted by the Indian Patent Office were in contravention of the anti-evergreening provisions contained in The Patent Act, which also include Sections 3(e) and 3(i), apart from Section 3(d).

While Section 3(d) sets the bar high for secondary patents with the mandated requirement for clinical evidence, others such as Section 3(e) set less well-defined thresholds. The easiest way patent applicants overcame the need to produce efficacy data was by proffering convoluted legal argument, which is an easy thing to do in an esoteric field like patent law.

Most prominently, patent applicants repeatedly blunted the effect of Section 3(d), by claiming an incorrect application of Section 3(d) by the IPO. They would direct the attention of the IPO to another provision which has traditionally governed the grant of patents for combinations—Section 3(e). Section 3(e) stipulates a requirement of demonstrating synergy (of any property, not solely therapeutic) where the invention is an admixture of known substances. Since the proof for synergy is a nebulous standard at best (in common parlance, it is explained as where the sum of 2+2 is 5), and one that applicants could readily overcome, applicants would steer the argument away from the exacting evidential requirements that a Section 3(d) citation would warrant.

By doing this, applicants were able to get over the Novartis standard set by the Supreme Court which required patent applicants to prove significant improvement before getting a patent granted on follow-on improvements. By misdirecting the attention of the IPO from Section 3(d) which required the applicants to prove therapeutic efficacy before the IPO—a hard ask for trivial innovations—the applicants were happy to show that their patent involved a combination and that it had synergy.

The argument pharma companies had against Section 3(d) was that it would affect the incentive to innovate. What has been demonstrated in the cases under study, is that by overcoming Section 3(d) they only have an incentive to tweak and not innovate. Over the years, the IPO has developed a reputation for separating the wheat from the chaff by applying the anti-evergreening provisions. When it comes to pharmaceutical patents, maintaining the quality of grants is inherently linked to the issue of access to medicines. There is very little room for error here.

Feroz Ali and Sudarsan Rajagopal are, respectively, the IPR chair professor at IIT, Madras and part of Accessibsa, a Shuttleworth Foundation project on access to medicines, and a London-based patent analyst.

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Published: 26 Apr 2018, 10:31 PM IST
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