Domestic pharmaceutical firms seek removal of India from USTR list of weak IPR regimes

New Delhi | Published: February 17, 2017 6:23:40 AM

The Indian Pharmaceutical Alliance (IPA), which comprises top-notch domestic drug companies, has dispatched a letter to the United States Trade Representative (USTR), making a strong case for removal of India from its Priority Watch List (PWL) on intellectual property rights (IPR) in its 2017 edition.

drug_pti-l-1The 2016 edition of the USTR’s PWL included India for allegedly failing to adequately protect IPR in its pharmaceutical sector. (PTI)

Dibyajyoti Bhattacharjee

The Indian Pharmaceutical Alliance (IPA), which comprises top-notch domestic drug companies, has dispatched a letter to the United States Trade Representative (USTR), making a strong case for removal of India from its Priority Watch List (PWL) on intellectual property rights (IPR) in its 2017 edition.

The 2016 edition of the USTR’s PWL included India for allegedly failing to adequately protect IPR in its pharmaceutical sector. The fallout of finding mention in the PWL would obviously be a lower level of investor confidence in the country. The USTR 2016 report expressed concern about the lack of clarity on standards for Sections 85 and 92 of the Indian Patents Act pertaining to compulsory licence (CL). While under Section 85, only a single issue of grant of compulsory licence by India and a solitary refusal have been reported prior to 2016, no case was reported in 2016, IPA noted. CL is a TRIPS-compliant mechanism under which the signatory nation can allow a local firm/s to manufacture a patented drug under certain defined circumstances namely ‘extreme urgency’, ‘national emergency’ or ‘public non-commercial use’.

In both the cases pertaining to Section 85 that were reported, the IPA noted, application for a CL was made principally because the reasonable requirements of the public for the relevant drug were allegedly not met at a “reasonably affordable price”.

The applicant for a CL for Bayer’s NexavarTM (for the treatment of advanced cancer) established its case and was so granted the licence. Likewise, the Controller of Patents refused the licence application for AstraZeneca’s drugs (for the treatment of Type II diabetes) as it failed to establish its case. There are no records of any CL having been granted under Section 92 in the past.

Abhijit Das, head, Centre for WTO Studies at IIFT, observed that the current IPR regime in India compliant with the WTO TRIPS agreement helps to protect its generic medicines sector by preventing “ever greening of patents”. This is contrary to the interests of global big pharma companies, many of which are based in the US and want to make inroads into the lucrative healthcare market in India, he added.

The USTR 2016 report sought further clarification from New Delhi to raise the confidence of the patentees such that they better understand the conditions for which a CL would be permitted in the country. Replying to this, the IPA said lack of specific standards for the grant of compulsory licences under Section 85 ought not to matter as the decisions of the Controller of Patents are subject to judicial review. Also, the conditions for issue of CL under Section 92 are clearly specified in the section itself and are exceptional in nature, the body of top Indian pharma companies said.

The 2016 USTR Report implies that the limitation in Section 3(d) of the Indian Patent Act goes beyond the established criteria set out in the TRIPS Agreement – that a product or process is patentable if it is novel, non-obvious and capable of industrial application. India, however, believes that Section 3(d) is in conformity with the TRIPS Agreement. “Section 3(d) is not discriminatory in nature and market access, as influenced by patent protection, is neither unfair nor inequitable to US persons as compared to Indian persons or people with other nationalities,” IPA said.

While patents for new substances are often known as primary patents, the patents for new forms of the same substance are often termed secondary patents. These secondary patents for the same substance are said to increase patent monopoly for a novel drug — the so-called ‘ever greening’ of patents.

However, despite India taking constructive steps to strengthen the IP environment in the country, it is unlikely that the US would stop complaining about the same anytime soon or remove India from the PWL. The reason lies elsewhere, analysts said, citing the drying up of blockbuster drugs in the Big Pharma’s pipeline of new drugs. The WTO TRIPS agreement has enabled India to develop its highly competitive generic medicines sector, which is also a leading source of export earnings for the country.

Meanwhile, the Global Intellectual Property Center of the US Chamber of Commerce recently released its international IP index has ranked 45 countries by the ‘strength’ of their intellectual property standards. India is placed 42nd on the list followed by Pakistan and Venezuela. The highest ranked country is the US followed by the UK, Germany and Japan.

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