[Ip-health] DG Shah of Indian Pharmaceutical Alliance(IPA) on the Indian Patent Ordinance

[Ram]

Strike a balance on product patents

There are perverse incentives in the current system

DG SHAH | FE

The debate is not about whether to have product patent or not, but
about the type of regime that India should have. It is about having a
law that not only protects new inventions but also domestic companies
from exporting off-patent products to global generics market. The
issue is: should India follow the perverse intellectual property
rights (IPR) laws and practices of the US, EU and Japan or evolve its
own IPR law utilising flexibilities built-in the Trade Related
Intellectual Property Rights (Trips) Agreement?


India is in a unique position. It is alone among developing country
producers of pharmaceuticals to have taken full advantage of the
transitional arrangements under the TripsAgreement. It has emerged as
the principal supplier of low-cost pharmaceuticals, not only for its
people but also for most of the developing world. It has to
demonstrate to the world not a "world class regime", as some in the
government have claimed, but a "Trips-compliant regi-me" that restores
the balance between the interests of the innovator and the consumer.

To develop an appropriate regime, we need people with clarity in mind
on the objectives of the IPR law and larger national interest at
heart. The law will have to strike a balance between (a) promoting
research and protecting access to medicines; and (b) attracting
foreign investment in research and preventing flight of investment in
the manufacturing sector to neighbouring countries with extended
transitional arrangements; and (c) leveraging the knowledge base for
potential rewards (two in the bush) and ensuring a dominant position
in the global generics market (one in hand).

These require a careful assessment of the opportunity in the global
generics market, the current state of the domestic industry and the
national health scene. Already, forces are at work to so design the
law as to contain Indian companies and keep them out of the global
generics market. These forces are working to allow patenting of
marginal changes in known substances (patentability) and to deny the
examiners an opportunity for informed decision-making (pre-grant
opposition). Both are critical components of the new law.

The Trips Agreement permits member countries to define patentability
in their national laws. A definition that denies patenting of marginal
changes in the known substances will serve three purposes: it will not
delay entry of generics beyond one 20-year period, and thereby promote
access to medicines. It will secure timely entry of off-patent
medicines in the global generics market, which is projected to grow at
an annual rate of 19%. Finally, it will also protect significant
domestic investment in the manufacturing sector.

The other critical component of the new law will be the ability to
challenge patent before it is granted, known in technical parlance as
pre-grant opposition. The number of applications suggests that many
are for marginal changes in the pre-1995 inventions, which are not
eligible for patent-protection in India as per the Trips Agreement.
Now, for any reason such as inadequate skill set, inexperience or lack
of integrity, if these applications were granted patents, domestic
manufacturers will be forced to withdraw a number of medicines
currently in the market, as in the case of imatinib mesylate (Glivec),
resulting in non-availability and steep price increase. The remedy to
this lies in retaining the existing provision of pre-grant opposition.

When the rest of the world is initiating steps to reverse the perverse
incentives in the current system, these forces want India to adopt it.
And some in our government justify it as "world class" or "state of
the art" law!

The writer is CEO, Vision Consulting Group and secretary-general,
Indian Pharmaceutical Alliance