Multinational companies (MNCs) that wish to make it big with their innovative therapies in India are now facing a new kind of challenge. It is new because it is not the usual challenge of securing a product patent, which India has won infamy for. Reversing its earlier stand which recognized only intellectual property of processes, India started acknowledging product patents since the beginning of 2005, honoring WTO commitments.

Product patents are now granted in India. Innovator products pass through the regulatory scrutiny without much hassle, but the generic equivalents of the very same brand name products also make a trouble-free entry into the market.

Innovators find it totally befuddling to see generic approvals of on-patent products whose IP has been recognized by the country. “How can the same government, which is granting a patent to the innovator, give marketing approval of a generic equivalent of the same patented molecule?” MNC drugmakers wonder.

Innovators, spending huge sums of money on R&D, consider their commercial rights on the patent protected products to be irrefutable. No guarantee of a term of exclusivity for a patented product is as good as no patent at all. This is nothing but gross violation of IP rights, they assert.

“The patent holders see the grant of patent as a legal right vested on them. It is therefore important to ensure that such legal right vested by one law is protected,” pointed out Ranga Iyer, former MD of Wyeth and former president of Organization of Pharmaceutical Producers India (OPPI), the umbrella body for MNC drugmakers.

Can’t Link Approvals to IP

On the other side of the fence, IP experts from India claim that granting of marketing approval to a generic version of a patented product does not amount to infringing any valid patent.

Exclusive marketing rights are not guaranteed by the revised Indian Patent Act 2005, contends Dr. Gopakumar Nair, a leading patent attorney from Mumbai who has represented several domestic companies in Indian courts.

And the monopoly rights in areas of health and nutrition are subject to various exceptions under different sections of Trade-Related Intellectual Property Rights (TRIPs), Dr. Nair explained, citing relevant articles of the WTO agreement.

Innovators strongly disagree and are seeking judicial intervention to resolve the riddle. The German drug giant Bayer, which recently approached courts to prevent the granting of marketing approval to a generic version of its kidney cancer drug Nexavar (sorafenib) by Indian generic maker Cipla, pleaded that the drug regulator should take into account the patent status of a drug before approving a generic.

Cipla argued that the scheme of Patent Act and Drugs & Cosmetics Act are entirely different in India and they are never meant to be brought together. Such a “linkage” of patents with the marketing approval of generics, if brought to India, would adversely affect access of cancer patients to safe, effective and affordable medicines.

The MNC drug lobbies view the mixing of patent issues with the right to access medicines at low prices only as a tactic to skirt patents by the generic makers that are under regulator scrutiny for excessive pricing of their own products.

Cipla, for instance, which often champions the cause of making costly drugs affordable, has been consistently ranking high on the list of companies charged with overpricing of medicines by India’s drug price watch dog, National Pharmaceutical Pricing Authority, said a senior official with an MNC firm.

Indian IP Regime: A Bold New Approach?

The Mumbai-based Cipla, which is currently the largest company in the domestic market, has reached market with a generic version of Roche’s Terceva (erlotinib), despite its patent status, after contesting its innovator’s claims in Indian courts.

Bayer still wants to fight the case out in India’s Supreme Court even as India’s drug regulator, the Drug Controller General of India, maintains that the office “is not equipped to grapple with complicated patent disputes.”

The desi drug lobbies, meanwhile, would prefer to see an evolving Indian patent system, one that seeks to strike a balance between IP rights and public needs for life-saving products, as an emerging model worthy to be emulated by the rest world.

“India’s IPR regime is designed to restore the balance between the interests of the innovator and consumer. Several developing countries around the world are emulating India’s bold approach,” commented D.G. Shah, secretary-general, Indian Pharmaceutical Alliance (IPA). IPA is the largest conglomerate of pharma firms, representing 13 leading domestic companies that together cover more than one-third of the national pharmaceutical market and contribute more than one-third of India’s exports in medicines.

So it’s no wonder that the Big Pharma is working overtime to change India’s IPR regime, Mr. Shah argued.

Developing nations could not help but adopt the Indian model in the long run, in spite of the aggressive efforts by MNCs, concurred Dr. Nair, joining the chorus praising India’s ‘long and hard IP experiments.’

S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at harachand@gmail.com.