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India's patents versus India's patients

What the Roche Pegasys case means for big pharma

India is now at the epicentre of a debate on patent versus patient. In recent months, a number of high-profile cases involving global pharmaceutical heavyweights and India's patent authorities have played out, with implications for patients and drug-makers worldwide. 

In October, India revoked Pfizer's patent on cancer drug Sutent, a month later it rejected AstraZeneca's patent appeal for Iressa, and the case between Novartis and India's Patent Office, which refused to grant a patent on the company's cancer drug Glivec, is still being heard in the Indian Supreme Court. 

Now, however, it is Swiss drug-maker Roche's moment in the spotlight, after India's Intellectual Appellate Board revoked its patent for Pegasys, a drug used to treat hepatitis C.

Although previous challenges from generic rivals in India had been dismissed, the Patent Office upheld a challenge from a rehabilitation trust in October on the grounds that Pegasys is not more efficacious than an older version of the drug. 

In this respect, India's patent law is unique because it does not consider new forms of a known substance to be inventions, unless they are proven to enhance its efficacy. 

Roche is not alone in this situation. Back in 2006, Gilead fell afoul of the same rule when The Indian Network for People Living with HIV/AIDS and the Delhi Network of Positive People filed a pre-grant opposition against a patent for Viread, causing the application to be rejected. In 2009, Gilead filed an appeal to challenge this decision but the appeal is yet to be heard.

Other issues at play
Beneath the surface of these cases, there are other issues at work. Although the Roche dispute is focused on the level of innovation necessary to secure a patent, the real debate in this and similar cases is about the interplay between intellectual property (IP) and competition law. The relationship is a complex one: IP rights allow companies to recoup sufficient income to reinvest in the development of new drugs, while competition puts pressure on companies to innovate in order to keep stride with market rivals. 

If the right balance is struck, both can work together to drive the R&D necessary to find new drugs and treatments. But in the case of Roche and Pegasys, the two have come head-to-head.

IP is vital to the patent-rich pharma sector. The patent cliff is having a devastating impact on revenues as some of the biggest earning drugs lose out to competitive generic companies in India and other developing countries. This, and the pervading economic gloom, is putting a squeeze on finances. With drugs typically taking 12 to 15 years to develop, costing perhaps a billion pounds – and with no guarantee of success – beleaguered pharmaceutical companies are cutting back on expensive and time-consuming R&D and diversifying into more gainful areas. 

Without IP rights to reward innovation and provide some measure of security in these tough times, pipelines may run dry.

However, pharma companies are not the only ones to suffer from this austerity. Governments are under increasing pressure to provide more cost-effective and accessible healthcare, particularly in developing countries like India with poor populations. In such circumstances, they can sometimes decide to override IP in favour of encouraging competition and driving down price.

India's patent law is unique because it does not consider new forms of a known substance to be inventions

This was one of the arguments put forward in the Pegasys case by Sankalp Rehabilitation Trust, which pointed out that Hepatitis C is treated with a six-month course of Pegasys, costing around R436,000, given in combination with Ribavirin, which costs an additional R47,160. This is a huge sum for the 10 to 12 million people infected with hepatitis C in India, a country where poverty still affects a huge number of people. 

Striking this balance can be difficult – each ruling against big pharma could improve India's ability to supply the developing world with affordable generic medicines; but it could also discourage companies wary of India's lax IP laws to invest there. 

It will be interesting to see how the ruling against Roche will impact on future cases in India. Significantly, the case classed a patient group as an 'interested party' in patent opposition cases for the first time, potentially opening the floodgates to future patent challenges. Alternatively, we might see more examples of compulsory licensing in India where a government allows a third party to produce a patented product without the consent of the patent owner. 

In a landmark decision earlier this year, India granted its first ever compulsory licence for Bayer's cancer treatment Nexavar, on the grounds that the drug-maker was failing to make it accessible to more people. 

Whatever the case, we must remember that IP and competition law are not always opposing forces. Some tension will always remain between increasing supply in the short-term, by opening up access to generic companies, and in the longer-term, by retaining the incentive to invest. But despite this, it is vital to remember that both drive innovation. Without one or the other, there would be no incentive for companies to invest in the new drugs and treatments that benefit everybody.

Article by
Nick Beckett

partner at CMS Cameron McKenna. He heads the Intellectual Property practice and Lifesciences industry group

21st January 2013

From: Sales, Regulatory



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