1. Column: Drug licensing must recognise patents

Column: Drug licensing must recognise patents

Once patent-linkage gets embedded in our law, cheap drugs won’t get market entry

By: | Published: October 30, 2015 12:23 AM

Nearly 30 months back, US drug multinational Merck Sharp & Dohme (MSD) had petitioned the Delhi High Court to restrain Indian firm Glenmark Pharmaceuticals from manufacturing and selling its anti-diabetes drugs viz., Zita and Zita-Met, which violated MSD’s patents. The drugs contain sitagliptin, for which MSD holds a patent in India.

Though Glenmark claimed that it had used sitagliptin phosphate, on which MSD held no patent, the court remained unimpressed with the Indian pharma company’s attempt to paint the two compounds as fundamentally distinct.

In its October 7 judgment, the High Court restrained Glenmark “by permanent injunction” from making, using, selling, distributing, advertising, exporting, offering for sale or dealing in sitagliptin phosphate monohydrate or “any other salt of sitagliptin in any form, alone or in combination with any other drug, thereby infringing on patent of MSD.”

Coming at a time when prime minister Narendra Modi, during recent meetings with the top brass of the political establishment in the US and Germany, has reiterated his government’s commitment to ensuring enforcement of intellectual property rights and the creation of an environment conducive to innovation, the sitagliptin order will certainly boost India’s credentials. But, is that enough?

Seeking enforcement of patent rights through courts is a long-drawn process even as the outcome remains highly uncertain and circumscribed by the interpretation of individual judges. Considering that the option of going to a higher court is always available, the wait only gets longer.

In India, where “safety” and “efficacy” of pharmaceutical or agrochemical products is a major concern, anyone wanting to manufacture/import, sell, use, distribute or export a drug must take prior approval from the national regulator, viz., the Drug Controller General of India (DCGI) under the relevant provisions of the Drugs & Cosmetics (DC) Act, 1940.

Under the DC Act, DCGI, while considering applications for registration, doesn’t have to take cognisance of the existence of any patent. This leads to an anomalous situation whereby government itself becomes a party to patent infringement. This emboldens generic companies to freely go for setting up businesses disregarding patents, and continue using the registration granted by regulator as a shield.

Surely, since DCGI ought to know that a patent right is held by person/company over a product, it should reject an application for approval/registration of such products straight away if it is not supported by consent letter from the patent holder? In other words, it should recognise the existence of patent—or “patent-linkage”, as it is known in WTO jargon—at the time of considering applications for market approval.

While removing a maze of uncertainties and ensuring timely enforcement of  patent-holder’s rights, this will also reduce load on the courts. It would also spare employees/workers, vendors and all others connected with the making and selling of infringed product the agony of losing their jobs/income when a court orders the closure of business.
Patients, too, will be spared the sudden disappearance of a cheap drug (invariably, the generic drug sells at a fraction of the innovator’s price as it involves no cost on R&D or stewardship) from the market.

Once “patent-linkage” gets embedded in our law, cheap drugs won’t get market entry in the first place. This will help in getting patients/buyers acclimatised to the harsh reality that a new/invented medicine costs money and therefore, is priced high. Today, they are kept immune, which is detrimental to their interest in the long-run as then there won’t be any incentive for the innovator to work on new drugs.

For making patented drugs affordable for the poor, the government can always work out mechanisms such as centralised procurement and making them available through its hospitals/healthcare centres at subsidised rates. But, it would be unfair to expect that the inventor suffer; unfortunately, this is what is happening under the existing dispensation.

A widespread perception that patent-linkage will be tantamount to going beyond India’s obligation under the TRIPs or TRIPs-plus agreements is a myth. This is an inevitable step that government must take to protect the rights of the patent-holder and hence, is fully consistent with our commitments under the WTO. Apart from reinforcing India’s credentials as a country serious about protecting IPR, patent-linkage adoption will rein in the cult of generic companies making a quick buck, riding on the back of R&D efforts of the innovator. Instead, it will prompt them to go for indigenous R&D which, at present, is non-existent. A self-propelled, R&D-driven domestic pharma and agrochemical industry will be much better equipped to deliver what Indian patients and farmers want, and at substantially lower prices. Will prime minister Modi crack the whip by amending laws to provide for patent-linkage?

The author is aDelhi-based policy analyst

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