Newspaper: The Economic Times

Section: Policy

Date: 6th Jan’ 09

Page: 13

Indian cos gain, not just MNCs

KRISHNA SARMA
Managing Partner Corporate Law Group

IN THE last couple of months, there has been much controversy on patent grants for ‘mere modifications or new forms of known drugs.’ From highlighting ‘inconsistency and lack of transparency in the functioning of Indian Patent Offices’ to allegations of graft and collusion—every conceivable irregularity have been imputed, prompting 150 eminent persons to petition the prime minister.

The grant of patents to two of Cipla’s drugs, Osemaprazole and Alendronate, by the Mumbai patent office is an encouraging development in the evolving Indian patents regime. Osemaprazole is a modified isomer of Astrazeneca’s blockbuster drug Nexium, while Alendronate is a salt in amorphous form of Merck’s best-selling drug Fosamax. At the same time though, other patent applications similarly placed as Cipla’s two products have been rejected by the Chennai and Delhi patent offices.

At the heart of this inconsistency are Section 3 (d) of the Indian Patent Act, 1970 and its interpretation. This provision disallows second use patents and limits patent protection to new forms of a known substance unless it can be shown that they differ significantly in properties with regard to ‘efficacy’. A significant problem in prosecuting patents today is the varying interpretation ‘enhanced efficacy.’ This leaves patent applicants vulnerable to subjective interpretations of individual controllers and examiners in the four patent offices.

It is true that several hundreds of pharmaceutical patents have been granted in India since 2005. It is also true that most of these patents are being granted to MNCs. Critics argue that the number of patents being granted in India far outnumber the NCEs (new chemical entities) being discovered in the world. Further, they say many of the patents granted are for ‘marginal’ improvements to existing therapies—often shortly before the original patent expires. This, they say, could undermine generic competition, lead to limited access to medicines for the poor and divert resources away from real research.

In fact, this criticism is not fair. First of all, multiple patents (as many as 200) relating to a single product sometimes result over time because significant hurdles were encountered in the product’s development that, if not overcome, would have prevented its manufacture or its safe and effective use. Even the most innovative new compound will fail the test of the market if its pharmacokinetic properties prove unstable, if the medicinal content degrades in the human system or cannot be safely stored on shelf, or if it can’t be manufactured in standardised acceptable quantities, at reasonable cost. These and other “inventive steps” that drive the long journey from laboratory to patient are critical to ensuring that a medicine is approved for the intended indication, with minimal risk to the patient population, and at a cost that the market will bear.

Second, spectacular breakthroughs (so-called “first-in-class products”) are now rare. Change often occurs in molecules that may seem trivial, but they bring about tremendous changes in benefits to patients. A patient, for example, is free from the stabbing pain of angina, not just because researchers developed calcium channel blockers, but because they took the next step: finding a way to lengthen the potency and therapeutic benefits of these drugs in the human system, in extended release tablets.

Patent system is required to provide the necessary incentives to achieve these breakthroughs, especially with regard to pharmaceuticals. The current level and type of R&D innovations by the Indian drug industry are mostly incremental in nature and over 70% of patent filings by Indian research institutes belong to this category.

Therefore, the point is that the principles and application of law must be uniform for homegrown firms like Cipla and (foreign) MNCs.