India Overturns another Patent

India appears to be taking on the first world’s pharmaceutical industry, with the third decision this year against a major pharma company – this time the Switzerland-based Roche Pharmaceutical Group.

In what was described as a victory for patients’ groups, India’s Intellectual Property Appellate Board revoked a patent granted in India to Roche for pegylated interferon alfa-2a, which is used to treat Hepatitis C. The patent, granted in 2006, was the first such patent on a medicine under the new TRIPS-mandated product patent regime for medicines as part of the country’s obligations under World Trade Organization's (WTO) international trade rules.

Roche, with US$22 billion in sales across the world in the first half of 2012, joins the Swiss pharmaceutical giant Novartis and German drug maker Bayer as having been bruised in the Indian legal system.

India’s Patent Office fired the first shot in March by issuing a license to a generic drug manufacturer, effectively ending the German pharmaceutical company Bayer’s monopoly in India on the drug sorafenib tosylate, known as Nexavar, which is used to treat kidney and liver cancer.

In that case, the patent office ruled that not only had Bayer failed to price the drug at a level that made it accessible and affordable, it also was unable to ensure that the medicine was available in sufficient and sustainable quantities within India. Competition from the generic version is expected to bring the price of the drug in India down dramatically, from more than US$5,500 per month to close to $175 per month – a price reduction of nearly 97 percent. A domestic company, Natco Pharma, now manufactures and sell a generic version of Nexavar and will pay a 6 percent royalty on net sales every quarter to Bayer. Natco is also committed to donating free supplies of the medicines to 600 patients each year. The license is valid to 2020.

Novartis has sought to challenge India for denying a patent for Glivec, scientific name imatinib mesylate, a popular blood cancer drug with global sales in excess of US$4 billion. The Indian patent office refused Novartis’s application for a patent on Glivec on the grounds that it is only a slightly modified molecular version of an original patent that dates from 1993. The product has long been produced as a generic and marketed in India by local companies at a fraction of Novartis’ price of approximately US$2,000 for a month’s supply, making it unaffordable for most of India’s 1.2 billion people.

Patent protection for pharmaceutical products starts 20 years from the date of invention. Clinical testing of drugs can take several years, shortening the patent protection period. As with Novartis, drug companies slightly modify the formula of the drugs to repatent them as new products.

Although Novartis challenged the decision in the Supreme Court, the two-judge Supreme Court Bench expressed skepticism over the company's claims that the drugs were substantially different, saying that, "A plain reading of the two patent applications shows that there is no difference in the two substances."

The standoff in India thus carries global resonance. The focus on generics – cheaper copies of expensive branded medicines whose patents have expired – will have a ripple effect on both affordability and the dynamics of India's pharmaceutical market. The gulf between the cost of branded drugs and generic alternatives is often vast. For instance, industry estimates suggest that over 80 percent of the antiretroviral medicines (ARVs) used by MSF (Médecins Sans Frontières) or Doctors Without Borders in its HIV/AIDS programs come from producers of generics based in India. Similarly, 80 percent of the ARVs purchased with donor funds globally come from India. MSF also relies on Indian generics for malaria and tuberculosis treatments.

In the Roche case, Sankalp Rehabilitation Trust, which provides treatment and rehabilitation support for injecting drug users, challenged the grant of the patent to the Swiss pharma company legal aid from the Lawyers Collective HIV/AIDS Unit. Sankalp challenged a 2009 decision of the Patent Office that upheld the validity of Roche’s patent. Roche argued that because Sankalp was not a business competitor or a researcher in the sector, it could not have challenged its patent at all.

Sankalp argued that it represented a community of drug users who are particularly at risk to Hepatitis C and also that its members were directly affected by Hepatitis C.

Setting aside the patent, the Intellectual property board held that Roche’s pegylated interferon was obvious to a person skilled in the art and that Roche has not provided any evidence, in the specification or even otherwise, to prove that pegylated interferon has enhanced efficacy. The board observed that “public interest is a persistent presence in intellectual property law” and also held that it was against public interest to “allow unworthy patents to be on the Register”. Holding that “the appellant who works for the community which needs the medicine, is definitely ‘a person interested’”, the patent office noted that a successful challenge would “break the monopoly” and “bring the drug within reach of the community for whom it works, not only by reduction in cost, but also because of increase in supply”.

Hepatitis C treatment, which entails a six month course of pegylated interferon and ribavirin, is currently unavailable in the public health care system, meaning that patients with chronic Hepatitis C must purchase Roche’s pegylated interferon alfa-2a at a cost of approximately Rs436,000 (although available at a discounted price of Rs314,496) and spend another Rp47,160 on ribavirin, entailing a total expenditure of nearly Rs500,000, making it unaffordable to most of them.

Eldred Tellis, director of the trust, who had challenged the patent, told Citizen News Service: “We hope that the absence of a patent barrier will spur generic competition to bring down the price of this much-needed drug for those suffering from Hepatitis C. We also hope that the government will now take concrete steps to start providing access to this medicine. It is unacceptable that people are dying due to Hepatitis C because they cannot afford to buy the medicine.”

Seemingly inspired by India’s decision on compulsory licensing of the cancer drug, the Indonesian government has also taken steps to over-ride patents on a range of HIV drugs. President Susilo Bambang Yudhoyono quietly issued a decree in September authorizing government use of patents for seven HIV/AIDS and hepatitis B medicines held by the likes of Merck and Co, Glaxo Smith Kline, Bristol-Myers Squibb, Abbott and Gilead.

China also overhauled parts of its intellectual property laws in June to allow local production of patented medicines. The amended patent law allows Beijing to issue compulsory licenses to eligible companies to produce generic versions of patented drugs during state emergencies, or unusual circumstances, or in the interests of the public.

Loon Gangte, of the Delhi Network of Positive People rightly believes that, "When drugs are patented, and pharmaceutical companies fail to fulfill their obligation to make patented medicines available and affordable to patients, the only way to bring prices down is through examining the validity of the patent granted or compulsory licensing which allows generic production of more affordable versions."

(Shobha Shukla is Managing Editor of Citizen News Service (CNS). Email: shobha@citizen-news.org, website: http://www.citizen-news.org)