Uncle Sam: Culprit, judge & hangman
Can you patent the sun?’ American medical researcher Jonas Salk who developed polio vaccine made this statement, which is now oft quoted to evoke moralistic stimulus to prevent or limit the patent rights on life-saving drugs, when asked why doesn’t he get his invention patented and get rewarded for the amount of toil and hardwork which have gone into developing the vaccine. Nevertheless, scores of articles have been written against him raising many questions. But then, hate the player, not the game.
While medical innovation is integral to human life sustenance, so is the incentive for drug developer in the form of patent rights to motivate them to bring in greater discoveries in the medical field. But what comes as a muddler is man’s greed to make not just profit but super profit.
Over the span of four decades, India has earned the distinction of being a ‘pharmacy to the world’. ‘Post–Independence era, India witnessed ruling MNCs charging ridiculously high prices for life-saving drugs. Then, during the Indira Gandhi regime, in 1970, according to recommendations of justice Ayyangar Committee report, we brought in process-patent in place of product-patent for inventions relating to food and medicines (Patents Act, 1970). Thus with no monopoly in place, greater competition and bulk production of drugs, the prices crashed to the affordability level’, notes Senior Advocate and member of Lawyers Collective Anand Grover who fought the historic case against Swiss drug major Novartis on patent of cancer drug Gleevec. He is also a Special Rapporteur United Nations Human Rights Council.
But now all is not well here. Indian pharmaceuticals exports suffered its slowest growth in the last 15 years. It grew by just 1.2 per cent to $14.84 billion last fiscal. Intellectual property rights issue being the eye of the storm. A number of multinational pharmaceuticals firms along with US chamber of commerce are stepping up pressure against Indian pharma companies.
But what triggered this? Are we really at fault or is it just another case of harassment of Indian business at the hands of Americans?
A series of events in India which upheld the rights of poor to access affordable medicines bewildered the profit-hungry firms. Last year, Novartis patent application for Gleevec was rejected by the Supreme Court as it was hit by Section 3(d) under India’s Patent Act which restricts the grant of patent to new forms of known substances, particularly patents on medicines which do not exhibit significant enhancement of efficacy thereby preserving maximum competition in the Indian pharmaceutical industry with a view to keeping prices of
Back in 2012, India granted its first compulsory licence against German Bayers to a homegrown generic drug maker Natco Pharma to manufacture and sell a patented cancer drug.
‘Foreign MNCs indulge in the practice of patent ever-greening. They seek patent on different aspects of the same drug to extend their monopoly in the market. They change the formulations of the drug giving them crystalline forms, provide a combination of salts, ester but with no improvement in their therapeutic efficacy. In this way, a single drug would have multiple patents, which is called patent thickets,’ says Grover.
‘And this prevents generic version of the drug to enter market and debars patients to access affordable medicines,’ he adds.
Indian Pharmaceuticals Alliance’s Secretary General D G Shah says USA’s bafflement over the issue is symptomatic. There is more to the entire conflict.
‘The real reason is fear among the US pharmaceutical companies that other developing countries like Brazil, South Africa, etc may adopt TRIPS flexibilities and higher standards of Patentability (Article 3d) as done by India. Even Australia adopted Raising the Bar Act to introduce provision similar to Article 3d. This is what unnerved PhRMA and Pfizer. Hence, an attempt to muzzle India and demonstrate to others that they can’t get away unharmed with provisions such as made by India’, Shah noted.
US pharma MNCs together with USTR have long been denouncing India as non-compliant of TRIPs (Agreement on Trade Related Aspects of Intellectual Property Rights).
‘Not only foreign MNCs, but their governments are also fully aware that Indian IPR regime is fully TRIPS compliant and hence none has dragged India to WTO’s Dispute Settlement Body for alleged violation of the TRIPS Agreement,’ Shah asserts.
Echoing the views, Grover says: ‘They cannot take us to dispute panel, as they know India complies with TRIPS. There is no case for it. All they are doing is just making the life difficult for us. It is a mere gambit to make life difficult for Indian firms by creating undue pressure.’
Leena Menghaney, Access Campaign India Co-ordinator at Médecins Sans Frontières, says, ‘What India is doing when it seeks to limit patent evergreening or when it authorises the sale of a generic version of an expensive patented medicine through the use of compulsory licenses, is entirely within global trade rules, and these actions save lives. Other countries are now considering similar legislation replicating the Indian model. The US pharmaceutical industry and USTR are clearly worried and are now seeking to curb India’s influence on global patent reform efforts that have the potential to increase access to medicines for millions in need in developing countries.’
While, India accounts for 60 per cent of pharma exports to US market, since last year, there has been a spate of imports alerts being raised against Indian drug makers by USFDA, an agency responsible for the control and safety of food drugs. Out of Ranbaxy’s total eight plants, its three plants—Mohali, Paonta Sahib and Dewas – were hit by the imports alerts. Wockhardt received two alerts and Sun Pharma suffered an import ban from its Gujarat facility.
So can we presume imports alerts raised against Indian firms were motivated?
‘To bring the USFDA warnings on some Indian manufacturing sites into perspective, it is important to note that issuing warning letters after inspection at manufacturing sites is a routine practice by Drug Regulatory Bodies like the USFDA, EMA as part of their control of drug manufacturers’ activities.’
‘Since the beginning of 2014, as identified on the public web page of the USFDA (http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2014/default.htm) several US-based manufacturing companies were issued warning letters, such as Amgen Inc, Pallimed Solutions Inc, Triangle Compounding Companies, together with Indian or Chinese companies. When looking at the archived warning letters on the USFDA website, warning letters have been sent by USFDA to generic companies as well as to multinational drug companies. Similar profiles of warnings can be retrieved from other NMRAs,’ says Menghaney.
‘However the media attention using the warning letters after inspection of manufacturing sites and the alarming quotes made on quality standards of Indian medicines supplied in the USA and in the rest of the world seem deliberately over-emphasised. Lobbying groups for the multinational pharmaceutical industry have effectively hijacked such on-going monitoring by Drug Regulatory Authorities of the Indian generic medicines imported in their market —and the routine actions that follow — as a tool to create fear among patients and governments who depend on low cost generic medicines. The media should be careful and balanced in its reporting as it could negatively impact public health with false perceptions among the public that more expensive and bigger brands of multinational companies are superior’ she adds.
Despite repeated attempts, Sun Pharma and Wockhardt refused to give comments over the issue.
Generic drugs: Lifeline for developing countries
Drug pricing globally has long remained a contentious issue, with drug developers in advanced economies maintaining that patent protection is essential for them so that there is always an impetus to innovate more drugs, claiming the amount they pour into research & development runs into billions of dollars. A testimony by Pfizer’s Chief Intellectual Property Officer Roy Waldron accusing India of adopting discriminatory practice against US Companies (shared by Lawyers Collective) claims that it takes more than $1 billion and 10-15 years of research to develop medicines.
In reply to Waldron, lawyers collective affirms ‘Drug companies claim that since they spend billions of dollars per drug in research, they are entitled to whatever amount of returns they can recoup within the monopoly period and more. These claims are based on extrapolation from certain industry sponsored studies which are frequently cited by the pharmaceutical companies to justify these multi- billion dollar claims. The first study on pharmaceutical R&D claims the cost per drug to be $231 million (1987 dollar). This study was sponsored by major pharmaceutical companies such as Merck, Pfizer and Bayer which is based on confidential data submitted by these companies which cannot be independently verified. The results of this study were then exaggerated to multi-million dollar figures. For instance, on 2 January, 2001, then PhRMA President Alan Holmer announced that it takes about $500 million just to get one drug into market. Public Citizen, a non- profit, critiques this figure on the grounds that the 1993 Di Masi study does not represent what companies actually spend on drugs to discover and develop new molecular entities. Rather, it includes the cost of all failed drugs and the expense of using money for drug research than other investments. It also does not account for tax deductions that companies get for R&D. Therefore it substantially overestimates the expenditures on R&D.’
Gleevec, anti-cancer drug, considered to be the major scientific breakthrough by Novartis went on to become a ‘blockbuster drug’, a concept where a drug generates annual sales of at least $1 billion for the company that creates it. Hence, against the term of 20 years of patent protection, any pharma company realises its cost and profit within five (maximum) years, and rest of the years, all it does is reap superprofit. Leena says, ‘Today the debate is not about the duration or term of a patent on a new drug. Today it’s about India’s campaign to curb evergreening. Patent-holding companies regularly pursue evergreening strategies to prolong their monopolies ever further than the 20 years of patent term that are available for a new compound, thus breaking that fundamental balance. They file and obtain multiple patents on a single medicine. If these patent filings are staggered over a period of years, the end result is that monopoly protection for that particular drug can extend well beyond the
original 20 years.’
For example, the patent on the active ingredient in imatinib, the cancer drug marketed at $100, 000 per patient per year by Novartis in the US, will expire in 2014 i.e. next year in the US. However, secondary patents granted wrongly on the same drug will extend Novartis’s market monopoly beyond 20 years in the US until 2018, preventing more affordable generics from entering the market.
Its generic versions in India cost just $1200 per patient per year.
Similarly today the new Hepatitis C drug sofosbuvir costs over $80,000 for a treatment course of three months per patient. The generic cost of sofosbuvir if generic competition opened up could be less than $200 for a treatment course of three months per patient.
Speical 301 Report —Tool to discredit India
The ‘Special 301’ Report is an annual review of the global state of intellectual property rights (IPR) protection and enforcement, conducted by the Office of the United States Trade Representative (USTR) pursuant to Section 182 of the Trade Act of 1974. After a lot of elaborative stir created to threaten to downgrade India to ‘priority foreign country’, which invites sanctions, USTR maintained ‘status quo’ by maintaining India on ‘priority watch list’. Does it hint at end of friction between India and US over the issue?
Anand Grover notes, ‘They wanted to wait for the new government to come. But no Indian government would choose to succumb to US pressure in this matter. It would result in total destruction otherwise.’
Reverberating Shah says: ‘The USTR and PhRMA had misread India. They had anticipated that India under the previous government will buckle down under pressure. Instead they found to their surprise that not only IPA, but the entire bureaucracy (DIPP, Commerce, Health and MEA) unitedly stood together and encouraged the IPA to take on the Big Pharma. The out-of-cycle review was partly a face saving for Pfizer and partly to wait for the face of the new government as they did not want to start on a wrong foot with the new government.’
This moral fight for the right to access affordable medicine seems perpetual, but what is praisable is India’s virtuous stand for not just its countrymen but around the globe.