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Bitter pill to swallow for pharmaceutical companies

Date: 05 June 2013
Author: Patrick McManamny
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Key points

  • Indian patent law includes provisions that can make it difficult to obtain patents for pharmaceuticals or new formulations of existing drugs.
  • Even once you have obtained a patent in India for a pharmaceutical, you still face challenges arising from the patent office’s and courts’ willingness to grant compulsory licenses to generics companies and to refuse to grant preliminary injunctions unless you can prove any differences between your product and a generics product are inconsequential.
 
India represents approximately the 15th largest pharmaceutical market in the world, worth about US$12-15 billion per annum.  This market is rapidly growing, with a growing middle class (and associated health care coverage).  PriceWaterHouse Coopers estimates that the pharmaceutical market in India may grow to US$48.8 billion in 2020.  Thus, this country represents an emerging market of interest to many pharmaceutical and biotechnology companies.  However, several recent developments in Indian patent law has set alarm bells ringing in the pharmaceutical/biotechnology companies.
 

Patentability

A recent development in Indian patent law was the decision by the Supreme Court to refuse Novartis’ patent application covering Gleevec.  Gleevec is the beta crystalline form of imatinib mesylate, which is the salt form of the free base and is used to treat the blood cancer chronic myeloid leukaemia. 
 
In the case of Gleevec, Novartis had filed an earlier patent application to imatinib mesylate, which was never pursued in India.  Gleevec is the only form of imatinib mesylate that was ever taken into clinical trials (and subsequently approved).
 
Indian patent law requires that any patent directed to a new form of a known substance must show that the new form has improved efficacy.  In this regard, a derivative or analog of a known substance is also considered a “new form” of a known substance.
 
In the lead up to and in the Supreme Court’s decision, there was some discussion of what “efficacy” means.  Novartis argued that Gleevec is more bioavailable, soluble and stable than imatinib mesylate.  However, the Supreme Court (and earlier decisions) held that the reference to “efficacy” in the context of pharmaceutical patents means improved “therapeutic efficacy”, and that while the data provided by Novartis showed an improvement in properties important in the development of a drug, they did not contribute to therapeutic efficacy of the drug.
 
There was also an indication by the court that data showing improved efficacy must be included in the specification as filed (i.e., post-filing data provided during prosecution or litigation may not be sufficient).  Since Novartis’ patent application did not include such data (and Novartis’ were unable to produce data showing improved therapeutic efficacy during prosecution/litigation), the application was refused.  Patents covering Pfizer’s Sutent and Roche’s Pegasys were revoked for similar reasons in 2012.
 
Accordingly, if you propose to protect a new form of an existing therapeutic compound (or a reformulation of an existing therapeutic compound) in India, you would be well-advised to include some form of comparative data showing improved therapeutic efficacy of your new compound/formulation compared to that of the prior art.  Clearly, this may not be possible in some circumstances.  This, combined with India’s refusal to grant patents to second medical uses of known compounds, can make it very difficult to obtain protection for a new drug.  Of course, patents covering manufacturing methods may provide some protection against generics, particularly those who manufacture in India.
 

Enforcing your patents

Even after you obtain a patent covering a new therapeutic product in India, you are not out of the woods. India’s court system has recently handed down decisions providing ways for generics companies to either avoid a patent or to compulsorily obtain a license under a patent.
 

Infringement/Preliminary injunctions

On 4 April 2013, the Indian High Court handed down a decision refusing to grant a preliminary injunction to Merck Sharp and Dohme (MSD) preventing Glenmark Pharmaceuticals (Glenmark) from selling a generic form of sitagliptin (Januvia® or Janumet®).  MSD owns Indian Patent No. 209816, claiming the R and S stereoisomers of sitagliptin and sells Januvia® or Janumet®, which comprise the R stereoisomer of this compound.
 
Glenmark argued that their product comprises three components (sitagliptin, a dihydrogenphosphate form thereof and a crystalline form thereof).  Glenmark also argued that MSD had filed separate patents for sitagliptin, a dihydrogenphosphate form thereof and a crystalline form thereof and the patents to the dihydrogenphosphate form and the crystalline form were abandoned.  MSD also filed a patent application for a combination of sitagliptin and the dihydrogenphosphate form thereof.
 
MSD countered that their patents to the salt and crystal forms of sitagliptin were abandoned because they were not allowable under Indian practice (see above) and that Patent 209816 covered salts thereof.  The court appeared to accept this reasoning, however then went on to require that MSD show that the combination of sitagliptin and the phosphate form as sold by Glenmark was equivalent to sitagliptin (i.e., that the phosphate form was inconsequential).  MSD did not present such evidence, and the court refused to grant the preliminary injunction.
 

Compulsory licenses

India’s Patent Act includes provisions giving the Government the right to grant a compulsory license under a patent to a third party and to set the terms of that license.  A compulsory license can be granted after three years from patent grant on any of the following grounds:
  • the reasonable requirements of the public with respect to the patented invention have not been satisfied; 
  • the patented invention is not available to the public at a reasonably affordable price; or 
  • the patented invention has not been worked in the territory of India. 
Recently, the Indian Government has made use of these provisions.
 
In 2012, the Controller General of Patents Designs and Trademarks of India (“Controller”) granted a compulsory license under Bayer’s patent protecting the cancer drug Nexavar to Natco.  In March 2013, the Intellectual Property Appellate Board upheld the compulsory license.  Essentially, the Controller granted the license based on the following reasons:
  • Bayer’s drug was only available to a small percentage of Indian patients– the Controller considered this meant that the drug was not “meeting the reasonable requirements of the public” as required by law;
  • Bayer’s drug cost about 280,000 Rupees (over US$5,000) per month, meaning that it was not “reasonably affordable” to the majority of India’s population (Natco has agreed to sell their generic form of Nexavar for no more than 8,800 Rupees less than about US$900) per month; and
  • Bayer did not manufacture their product in India (meaning that the patented invention was not “worked in the territory of India”).
Under the terms of the compulsory license, Natco must pay Bayer a 6% royalty on net sales, must manufacture their product at its own plant in Hyderabad (it cannot outsource production), must sell the drug only for the treatment of kidney cancer or liver cancer and must supply their product free to at least 600 needy and deserving patients each year.
 
Since this decision, Indian generic company Cipla has sought three more compulsory licenses (for trastuzumab (Herceptin), dastatinib (Sprycel) and ixabepilone (Ixempra)).  If successful, these licenses may be granted relatively quickly (in the Nexavar case, the license was granted within about seven months of commencement of the case).
 
Pharmaceutical companies are taking several steps to try to avoid compulsory licenses being granted under their patents.  For example, Roche has reduced the price of Herceptin in India (from 110,700 Rupees (about US$2,000) to 75,000 rupees (about US$1,300), with similar reductions in price for Rituxan (rituximab). Roche has also partnered with Indian company Emcure to produce Herceptin and Rituxan in India.  Thus, Roche appears to be attempting to provide their drugs at a price that is “reasonably affordable”, thus making it accessible to the broader Indian population and to “work” the patented invention in India.
 
From about 1 July 2013, the Indian Government will also start enforcing new price control rules for 348 non-patented drugs (with a proposal to introduce rules for patented drugs still under consideration).  Under these rules the government will set the price of each drug based on the weighted average price of all of its variants having a volume-based market share of more than 1%.  The new rules also prevent pharmaceutical companies increasing their prices to avoid the price controls.
 
Companies looking to sell a pharmaceutical/biological therapy in India should consider issues such as:
  • Pricing – making their product reasonably affordable and, as a consequence, accessible to the public (bearing in mind the effect that this may have on their pricing in other countries) or alternative strategies for reducing the costs of their product to the end user (e.g., Novartis recently negotiated an agreement with the Chinese government under which they provide three doses of Gleevec for every dose the government purchases, thus maintaining the full price for purchased drug while offering significant savings); and
  • Partnering with an Indian company to manufacture their product in India (at least for sales in that country).
 

Summary

As discussed in more detail above, India’s patent laws can make it difficult to obtain patents to therapeutic products and to subsequently enforce those patents.  Accordingly, companies should approach commercialising their technologies (or enforcing their patent rights) in this country with care and with the advice of experienced lawyers and patent attorneys.
Tags:  Pharmaceutical, biotechnology, India
 
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