India's generics industry has made affordable medications available worldwide. This success is entwined with its evolving patent laws, particularly for pharmaceuticals. This blog explores India's pharmaceutical patent landscape, its influence on innovation, drug access, and public health. The 1970 Patent Act was a turning point for India, initially recognizing only the methods of drug production for patenting, with a protection period of seven years. Post-WTO membership and TRIPS compliance, India transitioned to a dual system of process and product patents, extending protection to 20 years.

Evolutionary backdrop and India’s global pharma market sector

There has been tremendous growth in the global pharmaceutical business since WWII. During the war, numerous pharmaceutical companies increased their spending on drug research and development because to the high demand for antibiotics. Companies quickly expanded the business in the years after the war as they established themselves as multinational corporations (MNCs) by penetrating overseas markets. A few large multinational corporations (MNCs) now control the vast majority of the world's pharmaceutical products. The majority of these companies' wealth and power come from their headquarters in industrialized countries. The problem is that many developing countries do not have these kinds of firms. This is mainly because producing new or existing medications requires a great deal of expertise, education, resources, and money. Consequently, a number of emerging countries, including India, have become reliant on medicine imports. As time has progressed, India has solidified its position as a leading manufacturer of reasonably priced generic medications. “Presently, India's pharmaceutical sector is currently valued at $50 Bn. India is a major exporter of Pharmaceuticals, with over 200+ countries served by Indian pharma exports. India supplies over 50% of Africa's requirement for generics, ~40% of generic demand in the US and ~25% of all medicine in the UK” and "considered the world's third-largest by volume" and major global generic medication production, further establishing the country as "a global leader in the pharmaceutical industry," according to experts. The majority of the world's pharmaceuticals come from India, and the country is also a major supplier to its own population. Just two countries on Earth have a bigger proportion of the domestic pharmaceutical industry controlled by generic medication makers than by huge multinational corporations (MNCs). That country is India. Although many smaller companies focus solely on reverse-engineering medications from elsewhere, a handful of indigenous firms are competent to handle both generic drug manufacture and research & development. The manufacturing of narcotics is not an issue in India, but their accessibility is.

The TRIPS influence

TRIPS, effective from 1995, mandated member countries to set a baseline for intellectual property protection, including patents. For India, this translated into a dual protection system for pharmaceutical inventions, aligning with global standards

Medicine product patents were not recognized in India for a long time until the country joined the WTO. Without product patents to worry about, Indian pharmaceutical businesses produced a flood of generic medications, propelling the country to the forefront of generic drug manufacturing globally . As a result of the low cost of generic medications in comparison to their patented equivalents, India has become the go-to pharmacy for numerous developing nations, in addition to supplying its own citizens with cheaper pharmaceuticals . Yet in 2005, India was compelled to comply due to its contractual obligation under the TRIPS Agreement , had to change its legislation to grant medicines patent protection for their products.

Limitation of pharmaceutical patent prosecution

The Indian government passed a law that limited pharmaceutical patent protection to novel chemical substances or those that improved the therapeutic "efficacy" of existing substances in an effort to balance the competing demands for affordable drugs and strong intellectual property protection. Several multinational corporations, such as the Swiss pharmaceutical firm Novartis, have taken issue with this rule, which is codified in section 3(d) of the Patents (Amendment) Act . Which states that “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.” This limitation constraints Big pharma’s to produce multiple patent for the existing drug using it’s secondary application for patent grant (the evergreening strategy)

A critical debate in patent law is the balance between incentivizing drug innovation and ensuring the populace’s access to affordable medication.

There has been a concerted push to standardize intellectual property rules by numerous countries and international organizations in the last several decades. Nevertheless, there has been disagreement throughout the effort at standardization, most notably over the rules governing pharmaceutical patents. Developing countries do not have the resources to set up their own pharmaceutical industry, thus they rely on MNCs. This has led to ongoing tensions between the two groups.

India’s patent framework includes provisions for compulsory licensing, a TRIPS flexibility, to protect public health interests.

The pharmaceutical industry has a reputation for being intense reliance on information and extremely competitive. Research in the pharmaceutical industry is notoriously expensive and fraught with uncertainty. Consequently, pharmaceutical corporations must secure patent monopolies over any innovative and beneficial product that result from their years of hard research.

Judicial Rulings and Court Interpretation

Novartis AG V Union of India

When pharmaceutical company Novartis challenged patent application for the leukemia drug Gleevec in India, it became the first major legal challenge for the amended patent law. The World Trade Organization granted developed countries and LDC transitional period to comply with all provisions of TRIPS . This is a contractually binding obligation by India to make it complaint with the provisions of TRIPS since India became signatory of it.

Novartis contested the constitutionality of section 3(d) under TRIPS and the Indian Constitution when the patent of its leukemia medicine Gleevec was denied. A judgement against Novartis by the Indian Supreme Court has far-reaching consequences for multinational corporations, the Indian pharmaceutical sector, and individuals suffering from a lack of access to affordable medications internationally.

The business community argues to reap the advantages of pharmaceutical companies' costly research and development, the country must acknowledge intellectual property rights. "This case is about safeguarding incentives for better medicines so that patients' needs will be met in the future," says Eric Althoff, a spokesman for Novartis, during an interview with The Associated Press.

But aid organizations fear millions of impoverished people may endure pain and death if Indian pharmaceutical companies do not provide inexpensive generics. "The implications of this case reach far beyond India, and far beyond this particular cancer drug," says Leena Menghaney of Doctors Without Borders, speaking to the news service. "Across the world, there is a heavy dependence on India to supply affordable versions of expensive patented medicines."

Anand Grover, a lawyer who argued the case on behalf of Cancer Patients Aid Association in India, said the ruling confirmed that India had a very high bar for approving patents on medicines. “What is happening in the United States is that a lot of money is being wasted on new forms of old drugs,” Mr. Grover said. Because of Monday’s ruling, “that will not happen in India.” These were the different perspectives that arose one in favour of pharmaceutical industry and one in favour of aid companies

Effect on Stock Prices following Supreme Court Decision

Stock exchange Impact Novartis ($NVS) India's stock took a nosedive in 2013 when the Apex court in India rejected a patent for one of the company's drugs, ruling that the innovation at issue did not qualify for patent protection in India. Prior to this, the business had appealed the decision to the Supreme Court from the Madras High Court. Since Novartis failed to present proof of a change in therapeutic efficacy, the Supreme Court ruled that the medicine was only a modification of an existing treatment. After comparing the two drugs, the court found that neither "Imatinib Mesylate" nor the "Beta Crystalline form of Imatinib Mesylate" had any characteristics that improved the drug's therapeutic effectiveness. The shares fell to Rs 558.10, which was a 7% drop, and was the company's 52-week low.

Efficacy Interpretations

Former WIPO director, Nuno Pires de Carvalho , when asked about section 3(d)’s compliance with TRIPs, stated, WTO members can individually define the term invention for purposes of patentability, subject to meeting the TRIPS criteria of “novelty,” “inventive step” and “industrial application potential,” of the substance concerned. Therefore, what India did through Section 3(d) was to make it clear that a number of technical creations are not inventions, unless they present a significant increase in efficacy.

The "efficacy" the Madras High Court used Case law from 2007 includes Novartis AG v. Union of India and Others . In order for a newly found version of a known chemical to be considered an invention, the patent application must demonstrate that the improved form has a better therapeutic impact, according to the court's ruling. In pharmacology, "efficacy" refers to "the ability of a drug to produce the desired therapeutic effect" and is distinct from the drug's potency, "Therapeutic" means "having a good effect on the body" according to the dictionary. The patent application is required to demonstrate, in accordance with the definitions of "efficacy" and "therapeutic" retrieved before, how effective the new discovery would be in curing an illness or having a positive impact on the body.

Pharmaceutical Companies Producing Generic Medications

For nations that can't afford branded medications, companies like Lupin and Cipla in India have become the main source of affordable generic versions of AIDS, cancer, and malaria medications. However, as there is no development investment to amortize, the generics business in India may sell them for approximately 10% of the branded cost. The only difference is that India has been particularly blasé about disrespecting foreign patents, but otherwise it's the same as any generic medication strategy.

India initially used its mandatory licensing regulations in March 2012. Despite the fact that Bayer's cancer medicine Nexavar is still on patent, it granted indigenous manufacturer Natco Pharma the license to manufacture and sell a version of the treatment. Bayer will make a pitiful sum from Natco's 6% royalty payment since the difference between their monthly prices—$170 vs. $5,000—is so large. A variant of the medication will be offered by Cipla at a monthly cost of $130.

Drug sales in India have enormous potential, but the business is well aware of the risks involved. No matter the court's ruling, the industry may anticipate far-reaching consequences for the foreseeable future.

[Image Sources: Shutterstock]

As the Tarceva case, Roche submitted a patent application for Tarceva in India in 1996, and the patent was approved in 2007. The Drug Controller General of India approved Roche's Tarceva for sale in 2006 after the company intermittently sought approval. One of Roche's rivals, Cipla, introduced a Tarceva generic in 2008. Not long after that, Cipla was sued for infringement by Roche. Given the pricing disparity between Roche's patented drug Tarceva and Cipla's generic counterpart, a division bench of the Delhi High Court affirmed an earlier decision allowing Cipla to produce and sell a replica of the drug in the Indian market. Because of the large price disparity, the court did not wish to prohibit sales of the generic medicine, which would have denied patients access to a low-cost alternative. A court in India has finally acknowledged the need of taking the public interest into account when deciding whether to grant or deny an injunction order. The use of evergreening strategies by multinational corporations to prolong their patent monopolies is one issue,

The Nuances of Patentability

Current law recognizes product patents for new chemical entities (NCEs) – original molecules not previously disclosed. Mere modifications or new uses for existing drugs are not patentable. This distinction, as outlined in Section 3(d) of the Patents Act, aims to balance rewarding genuine innovation with ensuring access to affordable generics.

while section 3(d) safeguards low-income individuals who must pay exorbitant prices for drugs. However, because they can't recoup the expenses associated with "drug discovery," numerous innovative enterprises feel duped. Without succumbing to foreign demands, the Indian government should persist in looking out for the interests of its people.

In the chemical and biological sciences, section 3(e) addresses the patenting of combination inventions and states, "a substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance." In accordance to a long-standing principle of patent law the Combinations of numerous components that do not necessitate the use of innovative faculties and can be used separately are not eligible for patents in India, In order for a piece of information to be considered patentable, the components must be able to interact together in a way that produces new or enhanced results. When it comes to pharmaceutical composition claims, the Indian Patent Office usually raises an objection under Section 3(e) of the Patents Act, 1970. This is because claims involving pharmaceutical compositions often involve either a known composition or a straightforward combination of known components without any synergistic effects. The most common reason people object to these types of patent applications is because the words used in Section 3(e) of the Patents Act, 1970, such as "mere mixing" and "aggregate of the qualities," are hard to understand. The case was decided by the Hon'ble Bombay High Court, which characterized "mere admixture" as "where a person merely admixes the known ingredients with the hope of getting an additive effect of both substances." Admixtures are called synergistic compositions when they have an impact that is greater than the predicted additive effect. If you don't know the composition or properties of a substance, you can't make an admixture of it.

Bhabha Atomic Research Centre v. Union of India established that a combination of characteristics that were known prior to the priority date and randomly selected from a number of possible combinations does not constitute an inventive step but rather the accumulation of properties and hence does not qualify as a patent.

A patentable invention cannot be "any process for the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or other treatment of human beings or any process for a similar treatment of animals to render them free of disease or to increase their economic value or that of their products," as stated in Section 3(i) of the Patents Act, 1970.

The pharmaceutical industry is rife with assertions that purport to be about composition but really relate to methods of treatment. Recall that in India, no treatment-related claim can be patented. Alternatively, a patent may be granted for devices or apparatus that are used in surgery, medicine, or diagnostics.

Conclusion

There are valid ethical concerns about the consequences of strengthening patent protection for the goods of multinational corporations, which disproportionately affects the average person and makes it more difficult for them to afford necessary medications. The truth, though, is that these companies rely on the protection of intellectual property rights to create and produce the branded and generic medications that people all over the globe depend on. From a theoretical standpoint, India could keep doing what it's doing, its generics business just copies and pastes the formulas of drugs manufactured in other countries. However, rather than implementing the bare least to guarantee compliance with TRIPS, India should endeavour to safeguard intellectual property rights if it wants to develop into a significant scientific and technical superpower. Indian pharmaceutical patent law has evolved in a predictable fashion for obvious reasons, but the country has also changed a lot since its patent rules were first put into place. There are various ways in which India could have repositioned itself in the global discussion about IP rights had it not been involved in the Novartis case. Even if the judgment will benefit the generics business in India and those who want cheap drugs in the short term, it could slow down R&D efforts in the long run, both domestically and internationally.

The pharmaceutical industries in depth research is much appreciated but if secondary application of a drug is patentable with slight modifications every pharma industries will introduce their drugs this secondary application of a drug patentability exist in the united states that is prone reason for their medicine to be over priced and the drug is over patented not allowing such evergreening strategies the framers in India would have kept such tedious process in mind and would have amended the patent amendment in 2005 wherefore Encouraging collaborative research and development models by the government must be made that incentivize innovation while prioritizing access to essential medicines

Author :Anstein Rone J, in case of any query, contact us at Global Patent Filing or write back us via email at support@globalpatentfiling.com.