The Indian way in pharma regulation

The Supreme Court verdict denying a patent to Novartis for an updated version of the firm's anti-cancer drug Glivec may have a far greater impact in India and outside than was earlier realised, when India became TRIPS (Trade-Related Aspects of Intellectual Property Rights) compliant by amending its patent Act in 2005. The judgment intellectually validates the Indian law and brings out its implications, offering leads to the global quest for a way to aid the discovery of new and better drugs while making them affordable.

Interestingly, at precisely the time when India was seeking to strengthen its intellectual property rights (IPR) regime, then US President George W Bush's emergency plan for AIDS relief decided to procure and use generic antiretroviral drugs, something that was not done initially. According to a study, this saved over $323 million in five years (2004-08); and by 2008 in several African countries 99 per cent of antiretroviral drugs distributed were generic - and, in good part, made in India.

The Indian attempt to reintroduce product patents created disquiet in large parts of the world. The HIV/AIDS director of the World Health Organisation, Dr Jim Yong Kim, wrote to the Indian health minister in 2004 saying that national legislation should be adapted to fully use the flexibilities contained in the TRIPS agreement to support "members' right to protect public health and, in particular, to promote access to medicines for all". He added: "As India is the leader in the global supply of affordable antiretroviral drugs and other essential medicines, we hope the Indian government will take the necessary steps to continue to account for the needs of the poorest nations … without adopting unnecessary restrictions that are not required under the TRIPS agreement...."

India's current patent regime, as the Supreme Court judgment has pointed out, has a long legislative history. Since 1950 the government had sought to provide medicines at the cheapest price commensurate with giving reasonable compensation to the patentee. Compulsory licensing was introduced in 1952. On the basis of the Ayyangar report, the Indian patent Act of 1970 came into being, excluding food and medicines from product patents.

Product patents were reintroduced through the amendment to the patent Act in 2005 after intensive political discussion. In the parliamentary debate to pass this legislation, says the judgment, "cutting across party lines, member after member from the Opposition benches highlighted the grave risk in creating private monopolies in … pharmaceuticals … and the ploys used by big companies to artificially extend the life of patent…." Interestingly, Novartis and Glivec were repeatedly mentioned in the debate.

The minister, in his reply, promised not to allow evergreening. This took shape particularly through the provisions of Section 3(d), which detailed what was not an invention - "a new form of a known substance which does not result in the enhancement of the known efficacy of that substance..." Then, as a measure of abundant caution, the section listed many derivatives such as salts and others that would be considered the same as the original.

Critically, the act distinguishes between "invention" and "patentability" and "sets up a second tier of qualifying standards for chemical substances/pharmaceutical products in order to leave the door open for true and genuine inventions but, at the same time, to check any attempt at repetitive patenting or extension of the patent term on spurious ground." On the basis of this, the Supreme Court held that the beta crystalline form of imatinib mesylate of Novartis did not qualify the test of Section 3(d). It is clear that this provision in the Indian law makes evergreening more difficult than in the developed world - notably, the US, where the substance in question has secured a patent.

Currently, the global pharmaceutical industry is affected by two developments. One, the big drug discovery firms have just been through a process of shrinking patent pipelines and are regrouping to build their future business scenario on the basis of revenue from new patents. But the ability of conventional chemistry to produce new blockbuster drugs is limited. The future of patented drugs in biotechnology is far greater and the ability of generic companies to come up with bio-equivalent substitutes technologically far more difficult. Thus, Big Pharma has been down but by no means out.

Generic firms, which seek to benefit from the Indian sanction against evergreening, will eventually have to get their act together in the biotechnology area, which will require far more investment in R&D than made till now. But the day of the generics has come, most notably in the US and Europe, because of the need to cut healthcare costs.

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