Indias Intellectual Property Rights Regime And The Pharmaceutical IndustryPrepared By:

Rishi Raninga(2014C03)Ronald Kiro(2014C04)Shailie Naik(2014C08)Shivani Nehru(2014C10)Mittal Parmar(2014C31)

Archit Kannan(2014C44)Dony Joseph(2014C52) Gauri Singh(2014C54)Harsha Tandure(2014C55)Jery Eapen(2014C59)

1ContentsOverview of the CasePatents in Pharma IndustryPatent Act 1970Indian Pharma IndustryComparative StudyGlobal EnvironmentOther Pharma Cases

Overview of the CaseCipla Ltd., Bombay based Indian Pharmaceutical drug manufacturing company offered to sell Triple-therapy AIDS drug cocktails in Africa for $350 a year per patient in February 2001.

$600 a year to larger government programs.

$600 offer to African government was $400 below the price set by pharmaceutical firms that held the patents for those drugs.Impact of Ciplas MoveThis move ignited firestorm Storm in the West.MNCs in agreement with WHO had agreed to cut down their prices for AIDS drug combinations to African countries to $1000 a year per patient, below the $10,000 to $15,0000 amounts normally charged in developed countries in May 2000.Cipla price cut forced some MNCs to reduce the price again.Ciplas move political trick compassionate shrewdThe controversy between Indian Pharmaceutical Companies and the larger US and European MNCsMarrakesh Agreement.Patents In Pharma IndustryTo promote development and innovation in drug therapies to improve human health.This discovery made Pharma companies to make huge, long term financial investments in R&D.It took almost 10-15 years and $500 million to develop and bring a new drug to the market.

Concept of Patent The English word patent was derived from the Latin patere (to be open) and referred to an open letter of privilege from a sovereign.

In 1474, the Venetian Senate regularized the practice of granting patents with rules and administrative procedures.

In 1641, the first patent in the American colonies was issued in Massachusetts for a method of manufacturing salt.

With the Industrial Revolution, patent protection became an increasingly important device for encouraging innovation that allowed society to progress.

Patent Protection in Pharma IndustryTo promote development and innovation in drug therapy's to improve human health. This discovery made Pharma companies to make huge investments in R&D.Patents that resulted from R&D projects, moreover, were never successfully commercialized due to a number of factors, such as the discovery of even better therapies that would make other research projects obsolete.

Early Patent Law In India

British enacted the EXCLUSIVE PRINCIPLES ACT(1856) to protect invention in India.

Exclusive rights were given to the manufacturer to sell, make and authorize others to do so.

PATENT AND DESIGN ACT OF 1911: The 1911 act codified the patent regime in much greater detail, establishing for the first time in India a system of patent administration under the office of controller of patents.Challenges to Patent ActDependency on imported products, they argued, resulted in exorbitant drug prices, which were among the highest in the world.Many commentators in India supported the concept of patent protection for inventors, but wanted a regime that primarily rewarded the domestic industry, not MNCs. Pharmaceutical MNCs saw the patent issue as a direct threat to their livelihood and felt the situation demanded a forceful political response.1970 Patent ActRelated Government PoliciesPrice Controls (Drug Price Control Offer DPCO)Measure to promote self-relianceDPCO placed price ceiling on certain mass products. Drugs divided into 4 categories:LifesavingEssentialLess essentialNon-essential

Foreign Exchange Regulation Act of 1973Aimed to reduce dominance of foreign countries.Allowed equity investment of 40% by foreign firm in Indian venture.

Evolution of Indian Pharmaceutical Sector

Top Pharmaceutical Companies

Mergers and Acquisitions & 100% FDI2014: Sun Pharma takeover Ranbaxy for $3.2BJoint VenturesMultinational companies are collaborating with Indian Pharma firms to develop new drugs Pfizer partnered with Aurobindo Pharma to develop generic medicines Six leading pharmaceutical companies have formed an alliance LAZORR to share their best practices, so as to improve efficiency and reduce the operating costs

Research and Development

Indian pharmaceutical companies spend 6 per cent of their total turnover on R&D

Creation of a New Global EnvironmentCreation of WTO : permanent successor institution to oversee global tradeWTOs primary function Resolve trade disputes (among 142 member nations)Rules of new international trade regime:GATT. Trade in goodsGATS, General Agreement for Trade in ServicesTRIPS, Agreement on Trade Related Aspects of Intellectual Property RightsSignificance of TRIPSIPR in 7 areas : CopyrightsPatents TrademarksGeographical indications

Trade secretsIndustrial designsLayout designs for ICsProducts and processes patentable for 20 yearsRedefinition of Patent New, inventive, with industrial applicationsProvision No nation to discriminate based on technology

Induced Trade TensionsIndia listed on US priority watch list1990 Indian patent protection weak; adverse effect on US Pharma1992 Indias denial of patent protection unreasonableImposed penalty suspended duty free privileges

India's intellectual property rights related decisions have affected the biopharma industry much more than the other sectors-John J Castellani, CEO, PhRMA (Pharmaceutical Research and Manufacturers of America), a group of US-based drug makers

Points of ContentionIf countries show scant respect for IP protection, the future of new medicines is at riskIncentives for the research-based pharmaceutical industry to invest over $ 1 billion and 10-15 years in the development of a single new medicine will be underminedChallenges to the IP ecosystem in India are seen as a serious concern to the future climate for innovation across several sectors. India is being seen as an outlier in recognising and enforcing patent rights, and this perception could weaken India's investment climate.

Special 301 Report

USA did not move India to the priority foreign country (Danger zone), because they hope

Positive solution:New government will address the issues. Even they knew Congress wont come in power again. As such, USTR reviews the trading partners on annual basis. But for India, USTR has planned an Out-of-Cycle Review (OCR) of India, in fall 2014 (i.e. Late September 2014). So, if Modi takes strong initiatives to enforce IPR in MNCs favor, well be removed even from the priority watch list- just like South Korea, Philippines etc. Worst case scenario: Modi continues status quo, Obama puts India on priority foreign country status = puts sanctions under US trade law. Then India can retaliate by dragging them to WTO, after all, our patent regime is compliant with TRIPS (Trade related intellectual property rights). Besides India can also adopt tit-for-tat, sanctions for sanction then USA industries will be hurt more. Hence Worst case scenario unlikely.Developing Countries and Indian IPR

Developed Countries and Indian IPR

Internal Debate on Indian Patent Act 1970BJP strongly protested the revival in the Indian Patent Act 1970 then.One of the most prominent opponent of TRIPS was Dr. Hamied owner of CiplaCipla was earning by selling Pfizers Sidenafil -viagra tablet at 1c per pill in developing countries as Erecto that Pfizer was selling at 10 $ per pill!To Henry Mackinnel, CEO of Pfizer, the business model of Cipla was the reason to support the strong patent laws to carry out international business.Dr. Reddys viewDr. Reddys was lobbying the indian government to enforce and adopt international rules.Dr. Reddys founder Dr. Anji said: If you spend Rs. 10 Crore, you can start developing new molecule and thus this way MNC would focus on research where margin is higher and might give its generic drug business away to the local drug manufacturers in the developing countries. Dr. reddys itself had licenced its two molecules to Danish companyDifficulty is to carry out the clinical development in the developed part of the world. Product can also be licenced. MNC gives 10% profit on such products.Facts to gauge the impact of the introduction of pharmaceutical patents in IndiaConsistent growth rate of the Indian economyRising income levelsIncreasing penetration of insurance on all fronts, especially after allowing entry of private playersFor the 60% of the "poor" in India, who currently do not have access to pharmaceuticals, price rise and demand sensitivity due to patent introduction is irrelevant. Thus only a small part of the market will be affected by the new regimeIndia is governed by a government which relies more on populist politics for survival and this would ensure that the best interests of the population is kept in mind without buckling too much under international pressures. All in all, India stands to gain more in the new patent regime with the inherent costs being marginalized by several factors

US-based MSD (Merck Sharp & Dohme) Pharma, the third-largest pharma company in the world by revenues, asked theDelhi High Courtto bar Mumbai-basedGlenmarkfrom selling two popular anti-diabetic drugs.

MSD's move came a week after Glenmark Pharma launched generic versions of a range of anti-diabetes products sold by the US company under the brand names Januvia and Janumet. Glenmark branded its medicines Zita and Zita Met.

Merck unit sues Glenmark Pharmaceuticals for infringing patent on diabetes drugs

Januvia and Janumet are patented and enjoy IP protection of 20 years in India. However, under the Drugs and Cosmetics Act of India, a company can apply for approval to market a patented drug four years after its launch. Glenmark has used this route to get an approval to launch the drug. Under the Drugs and Cosmetics Act, state-level regulators can grant marketing approval even if a patent exists, as long as the drug has been around for four years. Glenmark is the third Indian company to use this route to launch a patented drug. Earlier, Cipla and Natco Pharma had tried to launch anti-cancer drugs in the Indian market through this route. From the drug regulatory side, there is nothing that stops Glenmark from launching the drug. A drug regulator cannot hold back an approval because of an existing patent, the courts have made it clear.

Quia Timet InjunctionNovartis filed a quia timet suit against Ranbaxy for its patented antidiabetic drug Galvus.

What is Quia Timet Injunction:An injunction to restrain wrongful acts which are imminent but have not yet commenced .The standard of proof for quia timet injunctions and what constitutes genuine threat for infringement is still ambiguous in India.

Ranbaxys move:Applied for revocation of Novartis patent in Intellectual Property appellate board (IPAB).Novartis counter move:One of Ranbaxys managers quote vildagliptin is at the developmental stage and is being actively pursued for development.Delhi HCs current decision:Delhi court has granted the injunction observing that applying for patent revocation is indicative of imminent intent to launch of generic version. Contradiction:Applying for patent revocation may also be construed as an act of good faith by the generic company; to have the validity of the patent adjudicated before launching the generic version.

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