Questions and Answers on India, Intellectual Property and Access to Affordable Medicines

Questions and Answers on India, Intellectual Property and Access to Affordable Medicines

June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Médecins Sans Frontières/Doctors Without Borders (MSF), like many international treatment providers and funders, routinely relies on quality-assured affordable generic medicines from India to treat people in our projects. India is the source of the majority of generic medicines used in many developing countries, thanks to provisions in its patent law which safeguard the interests of public health. MSF urges India to retain the existing public health safeguards in its national intellectual property (IP) rules that improve access to price-busting generic competition, despite pressure from numerous sources.

Q1: Why do millions of people rely on India for affordable medicines?

A: India is known as the ‘pharmacy of the developing world.’ Medicines produced by generics companies in India are among the most affordable in the world.

Before 2005, India did not grant product patents on medicines. This allowed for the production of low-cost generic versions of medicines that were patented in other countries. Competition among generic producers in India has brought the price of medicines to treat diseases such as HIV, hepatitis and cancer down by more than 90 percent. 

India thus became a key source of essential medicines at an affordable price, such as antiretroviral medicines (ARVs) to treat HIV. Over 96 percent – and growing – of all HIV medicines purchased by donors for use in developing country treatment programmes come from India.

As a member of the World Trade Organization (WTO), India was obliged to start granting pharmaceutical patents in 2005, and has since granted thousands of patents for medicines. However, when amending their patent law to comply with the new WTO rules, Indian lawmakers decided to set the bar high for what does and does not merit a patent, in the interest of public health. India also avoided the introduction of any intellectual property rules for pharmaceuticals which exceed obligations under the WTO TRIPS Agreement (see question 4).  India generally awards patents for new pharmaceutical compounds. But the amended patent law was specifically designed to limit a common pharmaceutical industry practice known as ‘evergreening.’ Evergreening is when companies try to extend their patent monopolies by additional  years – in some cases by as much as 20 years – by making modifications to existing medicines (e.g., combining multiple existing medicines into one pill). ‘Evergreen’ or ‘secondary’ patents are routinely granted in wealthy countries, but India chose to prioritise public health over pharmaceutical industry interests. This public health approach to setting strict patent standards is in line with international trade rules and better provides for the robust generic competition that keeps medicine prices low.

Q2: Why does MSF rely on India for affordable medicines?

As a medical treatment provider, MSF relies heavily on affordable, quality-assured medicines, many of which are generics produced in India. For example, more than 80 percent of the medicines MSF uses to treat more than 200,000 people living with HIV in its projects today are sourced from Indian generic drug companies. MSF also relies on India as a source of affordable essential medicines to treat a number of other diseases and conditions. If the existing public health safeguards in India’s law were removed or diluted, there would potentially be huge ramifications on generic production and the availability of affordable medicines.  MSF, along with many other treatment providers, patient groups, and affected communities, have long appealed to India to retain the legal protections that have made it the ‘pharmacy of the developing world’, and have called for other countries to uphold or apply similar legal public health safeguards.

Q3: What is the relationship between intellectual property and affordable medicines?

A: When a pharmaceutical company is awarded a monopoly in a specific country, the company gains a right to block generic competition in that country for a specific period of time. The patent prevents other companies from easily registering and/or selling the medicine in that country for the duration of the patent term, which is a minimum of 20 years for pharmaceutical patents. Companies can thus charge high prices because there are no competitors in the market.

When patent barriers are overcome or patent terms expire, multiple generic producers can then produce medicines, thereby driving the price down. Competition among multiple producers is the tried and tested way to bring prices down.

Competition among generic manufacturers in India - in the absence of patent barriers – is what helped bring the cost of HIV treatment down from over US$10,000 per patient per year in 2000 to around $100 today. With the availability of low-cost affordable generic drugs from India, nearly 14 million people living with HIV today receive treatment. The absence of patents in India also helped promote patient-driven improvements, such as the development of three-in-one HIV pills called fixed-dose combinations, and special formulations for children.

Q4: Does India not grant patents on medicines at all?

A: As a WTO member, India has to comply with trade rules set by the WTO. One of these is the Agreement on Trade-Related Aspects of Intellectual Property Rights, or the TRIPS Agreement, which obliges WTO member countries to grant patents on pharmaceuticals. To comply with this international obligation, India amended its patent law in 2005 and started to grant patents on medicines. As a result, when patents are granted in the country, Indian generic manufacturers are not able to automatically produce cheaper generic versions of these medicines.

This is already beginning to have a significant impact on access to affordable medicines, both in India and beyond, as many newer medicines (invented after 1995) are highly likely to be patent-protected in India – and many such as raltegravir (for HIV), and bedaquiline and delamanid (for drug-resistant tuberculosis) already are.

Q5: Why is the multinational pharmaceutical industry lobbying against generic competition from India?

Several recent legal decisions in India have set the stage for heightened tensions.

Swiss pharmaceutical company Novartis lost a seven-year battle to claim a patent on a new form of an existing medicine.  The Indian Supreme Court ruled that claims on new forms of known substances did not meet the patentability requirement in Indian patent law. The price of the generic version in India is now 99% lower than Novartis’ price.  This patentability standard is now being applied by the Indian patent office in the examination of secondary patent applications on a number of cancer, HIV, and hepatitis C drugs, which if rejected, open up the opportunity for robust competition.

In 2012, India issued a ‘compulsory licence’ for an anti-cancer drug that was priced out of reach. As a result, a licence was granted to a domestic manufacturer to market a generic version, which was made available at a price 97% lower than the originator’s. The positive outcome on affordable pricing led the Indian health ministry to set up an independent expert committee to identify exorbitantly-priced cancer drugs for which further compulsory licences may be issued.

Finally, in patent dispute cases, some courts have refused to automatically stop production of generics through injunctions while a dispute is being settled. Indian courts have argued that they cannot automatically grant injunctions in favour of patentees and must weigh the public interest, including the potential risk of denying patients access to life-saving medicines. Companies like Roche, BMS and Pfizer oppose these measures because they would like to use their Indian patents to block the entry of affordable generic versions of high-priced patented drugs to the market.

 

Finally, multinational pharmaceutical companies like BMS, Bayer and Roche object to flexibilities in India’s law that allow a generic manufacturer to obtain regulatory approval of a generic drug while that drug is still under patent.

 

Over the last decade, India’s precedent-setting use of public health safeguards in its laws and policies and judicial activism has become a target of the multinational pharmaceutical lobby, and can be seen as one of the starting points of intensified pressure against affordable medicines production in India.   

 

Q6: What is going on now in India to cause concern?

The multinational pharmaceutical lobby and several governments with major pharmaceutical stakeholders are now engaged in efforts to pressure India to change its policies and laws to introduce new barriers to affordable generics. Much of this pressure comes through regional or bilateral trade agreements, which are designed to operate outside of WTO rules, and stop the manufacture, registration and sale of affordable generic drugs.

India is facing pressure from multiple sources to change its national laws in ways that undermine public health safeguards and threaten to restrict access to affordable generic medicines:

From the Regional Comprehensive Economic Partnership (RCEP) trade agreement: The RCEP agreement is a regional trade agreement between India, China, Japan, South Korea, Australia, New Zealand and the ASEAN group of countries. Japan and South Korea have proposed provisions designed to undermine generic competition, particularly from India. For example, ‘data exclusivity’ would allow companies to get a de-facto monopoly through the backdoor—even for drugs that do not merit a patent under India’s law—by restricting the ability to register generic drugs unless expensive and unethical clinical trials are replicated. Japan is also pushing provisions for IP enforcement that are of great concern for procurers of medicines, like MSF, as they increase the risk of medicines being seized at Indian borders.

From the United States: the U.S. has increasingly pressured India to introduce changes to its domestic policies to restrict access to medicines, particularly following instances in recent years when the patent office and courts have made use of legal TRIPS flexibilities, including for example, the issuance of a compulsory licence, and the high-profile rejection of a secondary patent on a new form of an existing cancer medicine. Since then, the U.S. has hosted Congressional hearings, conducted two U.S. International Trade Commission investigations and used numerous other strategies to criticise India’s law.

 

See: Persistent US Attacks on India's Patent Law & Generic Competition for further details.

From the European Union (EU): In previous free trade agreement negotiations between the EU and India, TRIPS-plus provisions (see question 7) like data exclusivity and patent term extensions were proposed by the EU. India rejected these provisions and the negotiations have since stalled, but it is possible that they could be restarted. The remaining IP enforcement and investment provisions are still a matter of grave concern, as they could have serious negative impacts on generic competition from India, from legitimate medicines being blocked from leaving India, to third parties—such as treatment providers—being embroiled in court cases simply for buying or distributing generic medicines.

 

See: How an FTA between the EU and India could threaten access to affordable medicines for further details.

From Switzerland and EFTA group of countries: A group of four European countries – Switzerland, Norway, Iceland and Lichtenstein – who make up the European Free Trade Association (EFTA), have been negotiating a free trade agreement with India since 2007. The EFTA negotiations, led by Switzerland, have been on hold for the last few years, but are expected to restart soon. The leaked text has shown that text proposed by Swiss negotiators would require India to lower its patentability criteria, in a bid to get the legal framework for examining patent applications in India relaxed. If Switzerland succeeds, multinational pharmaceutical companies are likely to obtain secondary patents far more widely in India, effectively blocking generic competition.

From India: Officials from India’s new government have made conflicting statements about plans to modify India’s IP rules, indicating there is reason to be concerned that the pressure may be having an effect. The new government has delayed a decision to allow generic production of an exorbitantly-priced patented anti-cancer medicine that is unaffordable for patients in the country, in spite of a recommendation by a Health Ministry expert committee that the Ministry of Commerce consider inviting generic companies to apply for compulsory licences on these drugs. India is also currently reviewing its national IP policy and is accepting input from domestic and foreign stakeholders on what should be reflected in this policy, including, for example, from the United States Trade Representative.  The first draft of the policy is alarming, as it fails to recognise the balance needed between intellectual property rights and the need for generic competition.

 

Q7: What would happen if India applied stricter intellectual property protections, beyond existing intellectual property protections and beyond what is required by international trade rules?

A: If India changes its IP laws to grant pharmaceutical companies additional intellectual property rights at the expense of public health safeguards, more treatments will remain priced out of reach in India and for countries and providers relying on procurement from India for the duration of the respective patent terms, or longer. This could be true even for treatments that are merely new forms of existing medicines and do not deserve a patent under current Indian law.  India could lose its ability to supply much of the developing world with affordable generic medicines.

Intellectual property rules that restrict access to medicines and are not required under the WTO TRIPS Agreement are referred to as ‘TRIPS-plus’ provisions. The common feature of all TRIPS-plus provisions is that they complicate and/or delay the marketing of generics, and thereby reduce access to medicines.

See the chart below for more details on TRIPS-plus provisions and how they compare to India’s existing IP rules.

 

Table 1: What kind of policies are at stake when we talk about TRIPS-plus provisions?

Policy

TRIPS flexibilities for public health

India’s patent law

Scope of patentability

Countries have the right to define patentability criteria; for example, to only grant patents for truly innovative products and to exclude or limit new use or new forms of known medicines from patentability.

India’s law is strict about what does and does not deserve a patent, reserving patents for new drugs and discouraging secondary patenting i.e. new uses/forms of known drugs.

Patent challenges

Not every patent claim is valid. Countries have the right to create patent challenge mechanisms. The TRIPS Agreement contains no limits on the possibility of pre- or post-grant patent challenges.

India’s patent law allows any third party to oppose a patent if they deem a given claim on a drug ineligible for a patent under India’s law, before (pre-grant) or after (post-grant) a patent has been granted. Oppositions filed by patient groups in India constitute an important form of public oversight that helps reduce evergreening, which can cause unwarranted delays to generic competition.

Enforcement

The TRIPS Agreement does address pharmaceutical IP enforcement (i.e. penalties for breaking IP protection rules). However TRIPS does not include stringent stipulations on this enforcement, because claims of patent infringement are complex and can impact access to lifesaving medicines.

Indian courts distinguish patent disputes over lifesaving drugs from other cases of IP infringement. Indian courts have argued that the validity of the patent must be tested and they must weigh the public interest - whether the patients would suffer irreparable hardship if the generic drug was blocked from the market while the dispute is pending.

Data exclusivity

The TRIPS Agreement does not require data exclusivity. Data exclusivity means that for a fixed period, drug regulatory authorities cannot process the registration dossier of a therapeutically equivalent generic version of a medicine using the original drug’s safety and efficacy data. Generic manufacturers must either wait out the exclusivity period or repeat expensive and unethical clinical trials. A drug’s data may be restricted by data exclusivity even if that drug is not patented.

India protects clinical data from unfair use, but does not provide for data exclusivity recognising that this goes well beyond international trade rules obligations and would have considerable impact in delaying the entry into the market of cheaper generic drugs.

Patent term extensions

The TRIPS agreement requires a 20-year patent term, but it does not require this term to be extended for regulatory delays.

Indian patent law does not provide for patent term extensions.

Patent linkage

Patent linkage means linking patent status to the registration of medicines. This requires a drug regulatory authority to withhold marketing approval for a generic version of a patented drug regardless of whether the patent is valid or not. Patent linkage delays generic competition, and can undermine the use of compulsory licences and circumvent normal patent dispute processes. Patent linkage puts undue burden on the agencies responsible for drug safety and efficacy to police private patents. WHO has warned developing countries against implementing patent linkage.

At present a drug’s patent status and its registration status are two separate issues in India. Section 107A of the patent law allows generic producers to manufacture a generic version of a patented drug, conduct all tests and obtain necessary marketing approval (or registration).

Compulsory licenses

Compulsory licensing is the authorisation given by the government, judiciary, patent office or the competition commission to a third party to market and supply a generic version of a patented drug, without the consent of the patent holder. TRIPS recognises this as a legal means to overcome barriers in accessing affordable medicines and WTO members have the freedom to determine the grounds upon which they are granted. The patentee is entitled to royalties.

There are several compulsory licence provisions in the Indian Patents Act, but India has only granted one compulsory licence on a patented cancer medicine that was priced out of reach for the majority of patients who needed the drug.

 

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