Pharmaceutical IP in India: Unique Challenges

Vinita Radhakrishanan
Senior Partner, Chief Patent Officer
(Research, Risk Clearance & Strategy), BananaIP

Intellectual property (IP) rights are extremely important for the pharmaceutical industry. The use of the IP system by SMEs in the pharmaceutical industry depends largely on the business strategy of a company, its size, resources, innovative capacity, competitive context and field of expertise. Research-based, innovation-led companies that seek to develop new drugs, improve or adapt existing drugs or develop new pharmaceutical/medical equipment or processes, tend to rely heavily on the patent system to ensure they recover the investments incurred in research and development. Vinita Radhakrishnan, Senior Partner, Chief Patent Officer (Research, Risk Clearance and Strategy) at BananaIP, specializes in Bio/ Pharma patent law and Patent Strategy talks about the unique challenges faced by Indian Pharmaceutical companies with regards to IP.

A constant and continuous effort towards harmonizing and standardizing Intellectual Property(IP) regime worldwide, in its own capacity, has been contributing towards the making of a Global Economy. Despite its jurisdictional nature, loyal adherence to the TRIPS agreement by its member states has brought in certainty, all be it to a limited extent, with regard to the protection of Intellectual property rights across the world. Having said that, the extent and strength of protection conferred to the same piece of IP vary significantly from country to country depending on its social, economic, political and moral structuring. This is particularly true in case of the protection rendered to IP in the Pharmaceutical industry. In their pursuit to find the fine balance between incentivizing innovation and facilitating optimum access to health, most nations exploit the flexibilities available to them under the TRIPS agreement to adopt a differential protection system for pharmaceutical inventions, India being at the forefront of such efforts.

With population of over a 1.3 billion and less than 20% covered under health insurance, enabling access to affordable health care becomes one of the primary objectives of all health reforms in India. Being the world's largest provider of generic medicines and producers of 70% of the domestic pharmaceutical supply, the Indian Generic industry is one of the key contributors to the countries' rising GDP and thus has a strong influence on the policy framework in the country relating to Pharmaceutical Industry. It is against this backdrop the philosophy and framework of Patent Law in India has evolved.

Securing IP rights, more specifically Patent rights, significantly enhances the commercial prospects of Innovative businesses. This is particularly applicable to the pharmaceutical sector where research, development and commercialization are both risk and cost intensive. By granting exclusivity for a period of 20 years the patent system aims to provide pharmaceutical industry an opportunity to recoup their investments. However, owing to the patent regime that India has adopted, the perceived benefits of the patent system do not filter down to innovators in India to its full extent. The innovator companies face several unique challenges while protecting their IP in India few of which are discussed here.

Exclusion from Patentability
To comply with TRIPS, the Indian Patent system re-adopted the once abandoned Product Patent regime for pharmaceutical inventions. However, this inclusion came with riders that restrict the scope of protection conferred to pharmaceutical patents in India. Although the amended law allowed patents for both process and product related inventions, in an effort to ensure that there is no lingering effect of exclusivity post the stipulated patent term (the so called "ever greening effect), several categories of pharmaceutical inventions that are patentable across the globe, were specifically excluded from patentability, posing a unique hindrance to the pharmaceutical innovator companies conducting business in India.

Section 3 (d) of the Indian Patent Act excludes new forms of a known substance, including salts, esters, ethers, polymorphs etc., from the ambit of patentable subject matter, if such new form does not provide enhanced therapeutic efficacy. This necessarily means that even if the invented form provides other benefits such as better bioavailability or better stability compared to the known form, unless and until the applicant is able to show enhanced therapeutic efficacy at the time of patent filing, new form of a known substance will not be awarded a patent. Similarly, section 3 (d) also excludes the new use of known substance from the ambit of patentable subject matter. A recent study indicated that 45% of all rejected pharmaceutical patent applications cited Section 3(d) as a reason for rejection. Novel combinations of known drugs also fall outside the scope of patentable subject matter as per section 3 (e) unless the said combination shows synergistic effect when administered together. Given that the requirement for generating undue experimental data is time intensive and the act of filing a patent before your competitor does, is time sensitive, the pharmaceutical innovators often find themselves in a dilemma as to when and whether to file for a patent in India.

Lack of Data Exclusivity
The lack of provision for data exclusivity provided by the drug regulatory body in India (CDSCO) adds to the already existing challenges faced by the pharmaceutical innovators. Contrary to the practice followed by regulatory bodies in other jurisdictions for example the EMA in Europe, and the FDA in US, the Central Drug Standard Control Organisation(CDSCO), the drug regulatory body in India, does not provide data exclusivity for the applications submitted to them for Approval. The lack of data exclusivity provisions over and above the challenges faced due to the non patentability of new forms, use and new combinations of known drugs, makes it very difficult for the innovators in the business of repurposing pharmaceutical products to sustain in the Indian Market.

Shrinkage of Patent Term
Shrinkage of patent term is a challenge most pharmaceutical innovators have to deal with in most parts of the world. The 20 years term of exclusivity for a patent is mostly notional in case of pharmaceutical inventions. The long drawn regulatory approval process effectively eats into at least half of the patent term provided under the law. Unlike in case of other technologies, the commercial exploitation of a pharmaceutical patent is not possible till the regulatory approval process is completed. In India, this challenge is more severe when compared to many other countries. Recognizing the disadvantage caused to the patent applicant due to delay in regulatory approval, many countries including United States, Japan and countries of the European Union allow a patent term adjustment beyond the 20 years of patent life to compensate for the delay in the approval process. Such a provision is not available in India due to which the term of exclusivity available for Indian Patents in the pharmaceutical sector is reduced further when compared to the term available for the same invention in other jurisdictions.

Compulsory Licensing
Having to deal with a strong Compulsory license regime coupled with a very powerful Generic industry is another challenge that is unique to pharmaceutical innovators in India. Although, India has issued only one Compulsory license till date (for Bayer's sorafenib tosylate in 2012), this decision has nevertheless incentivized many generic players in the market to seek compulsory licenses for patented drugs being sold in India. Even though , the compulsory license applications, which do not satisfy the legal requirements, are being promptly rejected by the patent office, the uncertainty of the fate of a patent in addition to the other challenges discussed above, makes it difficult for an innovator company to assess the value their pharmaceutical patent will generate in the Indian market.

Despite these uncertainties and challenges, probably the sheer size of the Indian market is incentive enough to keep the big pharmaceutical innovators interested in the Indian market. Having said that, in our effort to finding the fine balance between innovation and access to health, are we tipping the balance by over-incentivizing the already powerful generic industry at the cost of domestic innovators, giving them fewer reasons to research, develop and innovate in the pharmaceutical field, is a question we need to seek answer for.