[Ip-health] Some critique on Patent Amendment Bill (INDIA)

[lawyers]

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Submissions on Patents (Amendment) Bill

By N. B. Zaveri, Advocate

Dt. 6th October 2004




It is submitted that PA Bill 2003 needs to be totally reviewed in the large=
r interest of the nation, consumers and the national drug industry. The fol=
lowing brief note refers to few important public interest safeguards which =
have to be taken care of in the Bill.



  1.. Restricting the scope of patentability to exclude 'me-too' drugs.


  2.. Retaining the pre-grant opposition provisions.


  3.. Practicable and effective compulsory licence provisions.


  4.. Prior / honest use exception in respect of drugs already honestly and=
 lawfully marketed before grant of patent / EMR.


  The need for these public interests safeguards, can be better appreciated=
 by reference to the recent actual experiences of thousands of poor victims=
 of AIDS/HIV and blood cancer, dying/suffering untreated because as briefly=
 set out below: -


    a.. the drugs required for their treatment, though involving insignific=
ant innovation were granted product patents/EMR because of weak standards f=
ailure of Patent Office or absence of provisions for effective intervention=
 by other interested parties, particularly through pre-grant opposition;


    b.. the governments failure or inability to take effective measures to =
procure generic drugs at affordable prices, or to control outrageously high=
 drug prices, being claimed by right holders.



  Millions of poor dying/suffering AIDS victims denied treatment by ARV dru=
gs protected by patents in African countries -

  Patentees price US $ 10000 to 12000 - CIPLA offers at US $ 350 -

  Government / NGOs prevented from procuring the generic drug because of pa=
tent claims and litigation. Effective public interest safeguards in patent =
laws could have prevented such situation -


  The facts: -

  Insignificant innovation -

  AZT - a 'me-too' drug admittedly known since 1965, its anti-viral effects=
 known since 1975, granted product patents in USA, and several African and =
other countries merely on basis of discovery of its new use for treatment o=
f AIDS/HIV. Such insignificant innovation is not accepted as a patentable i=
nvention under Indian Patents Act 1970 and in many other countries.


  Wide excessive claim -

  While in USA product patent is granted covering all formulations containi=
ng 5mg to 500mg and covering all uses, in Ireland, corresponding patent sim=
ultaneously claimed by Burroughs Wellcome was granted only for formulation =
only for treatment of AIDS/HIV.


  Co-inventors ignored -

  The research and clinical trials leading to the discovery of this new use=
 of AZT, were conducted by the right holder since inception, jointly with N=
ational Institute of Health of USA (NIH). However, the patents were claimed=
 and granted without disclosing the name of NIH as joint inventors or joint=
 owners.


  Outrageously high drug prices -

  Patent holders fixed and maintained international prices of their product=
 at US$ 10000 to 12000 for one year course of treatment. Not even 1% of the=
 population in Sub-Saharan African countries could afford the price. 99% of=
 the population was being denied access to the drug for the entire patent t=
erm.


  Generic manufacturers in India -

  In India new use of a known drug not being patentable as per sec 3(d) of =
Patent Act 1970, CIPLA and other Indian manufacturers produced the drug wit=
h their own technology, and CIPLA made an open public offer to supply the d=
rug to African countries at an price of US $ 350 (i.e. 3% of patentees pric=
e) for the similar treatment.


  Law suit to prevent generic use -

  39 MNCs filed a suit in Pretoria High Court to prevent S.A. Government an=
d others from importing the drug from generic sources. Eventually after 3 y=
ears the suit was withdrawn. But in the meantime, thousands of AIDS/HIV vic=
tims died untreated.


  Defiance of international appeal on humanitarian grounds -

  Despite appeals from UN General Assembly, Vatican, WHO, UNAIDS, UN Human =
Rights Commission and several others, the patentees refused to reduce the p=
rices, and maintain their objections to procurement of generic drug even th=
ough about 700 AIDS victims were dying untreated everyday in South Africa a=
lone.


  The right holders abusing patent grant -

  The patent holders had no intention of 'working' the patent in the host c=
ountry either by local production or even by importation by not reducing th=
e prices or of allowing its local production or imports by granting licence=
s - They made no attempt to reduce the prices to make commercial use to the=
 fullest extent possible. Apparently, the patents were secured and enforced=
 only for preventing generic competition and maintaining their internationa=
l prices.


  Abuses as per TRIPS, but 'TRIPS-plus' patent laws fail on public interest=
:

  All these constitute grossest abuses of patent grant even as per TRIPS an=
d there were sufficient grounds for grant of compulsory licences. Obviously=
 licensing/government use provisions in the patent laws of these countries =
were not designed or implemented to remedy the situation.


  Failure of 'TRIPS-plus' patent laws -

  This specific instance demonstrates how absence of effective public inter=
est safeguards in patent laws can bring miseries for the people: -


        a.. Lax standards 'novelty' and 'inventive step' have resulted in p=
atents being granted for AZT formulations on basis of mere discovery of a n=
ew use for treatment of AIDS/HIV of the known drug. If effective provisions=
 had been made in the patent laws by defining 'product', 'novelty' and 'inv=
entive step', and specifying higher standards to exclude such 'me-too' drug=
s as permissible under TRIPS Agreement, patent grants for such disproportio=
nately insignificant innovation or improvement, and sufferings of millions =
could have been avoided;



        2.. Absence of pre-grant opposition - If provisions had been made f=
or effective pre-grant opposition in patent laws of USA or African countrie=
s, NIH would have been better placed to establish their claims than in post=
 grant reexamination procedures or legal proceedings after grant. Joint own=
ership of NIH could have helped to moderate the price and availability of t=
he product for the benefit of the consumers. It is also possible that the s=
cope of patents claims could have been restricted to the actual contributio=
n as in Irish patent;



        c.. Absence of effective and self operating compulsory licence / go=
vernment use provisions. If practicable, self-operating and CL provisions h=
ad been effectively provided / used in African countries, thousands of AIDS=
 victims could have benefited out of treatment with the drugs offered by CI=
PLA and the governments in this countries would not have been mute, helples=
s witnesses to millions of their citizens suffering / dying from AIDS/HIV f=
or want of treatment and inability to provide the drug at affordable prices=
.


  2003 Bill - will replicate and will generate such abuses and disasters

  Weak patents - The 2003 Bill by Clause 3 now proposes patent grant for ne=
w uses of known drugs by removing the bar of sec 3(d) of Patents Act 1970 a=
gainst such patents by adding the word 'mere'. This will mean that such 'me=
-too' drugs with little or no innovation will become patentable also in Ind=
ia merely on discovery of 'new uses' of known drugs and millions of the poo=
r in India will also face the same plight as in African countries.


  The other aspects of the Bill provisions are referred below -


  EMR grant for Glivec -

  Disaster for blood cancer patients in India

  Grant of EMR for imatinib mesylate (Glivec) product to Novartis in Novemb=
er 2003, has been directly responsible for denial of treatment to thousands=
 of victims of deadly blood cancer - many of them children, already receivi=
ng treatment by generic drugs available at less than 10% of Novartis's pric=
e.


  EMR claimed for product already in public domain -

  The compound imatinib mesylate - including its alpha and beta crystalline=
 forms as well as the amorphous substance - was known since prior to 1995 a=
nd its use for treatment of blood cancer was established and approved by US=
 FDA in 2001. Separate patents covering the original compound (which would =
also include all its forms) were claimed and granted in several countries d=
uring 1992-1995 but were not claimed in India, as under Patent Act 1970, on=
ly process patents were allowable.


  EMR claimed and granted on basis of mere discovery of better physical pro=
perties of known product -

  On mere discovery of better physical properties of the beta crystalline f=
orm - less hygroscopic and more stable - separate (mailbox) application for=
 product patent for the beta crystalline form was made in India in 1998, wh=
ich was retained in the mail-box.


  Formulations imported and marketed at price of Rs. 1000 per capsule

  On receiving market approval in India, Novartis started importing the fin=
ished formulation and marketing it since 2002 at the price of Rs. 1000 per =
capsule (about Rs. 11 Lacs for one year course of treatment for one patient=
).


  6-7 Indian companies honestly and lawfully produce the drug with own tech=
nology and after obtaining drug licences - market the drug at Rs. 90 per ca=
p. Since January 2003 openly, honestly, legitimately and with full knowledg=
e of, and without any objection from, Novartis - producing, marketing and e=
xporting their respective imatinib mesylate products under their own brand =
names. The market price of the Indian Companies' product was only Rs. 90 or=
 less (i.e. at less than 10% of Novartis price) per capsule. Several patien=
ts already receiving treatment by Indian drugs.


  Novartis granted EMR in November 2003 by Patent Controller - immediately =
files suits against Indian companies to prevent them their productions and =
marketing -

  In November 2003, Novartis was granted, exclusive marketing right (EMR) f=
or their Glivec product. Novartis immediately filed legal proceedings in di=
fferent High Courts against different companies to prevent and obstruct the=
ir production and distribution of their imatinib mesylate products. They ha=
ve recently obtained interim injunction orders against the Indian companies=
 from the Madras High Court, which observed that there was no provision for=
 inquiry or refusal of EMR grant on the ground of lack of novelty, non-obvi=
ousness or usefulness of the product.


  Sacrifice that the community is required to make in terms of human lives =
and sufferings, is obviously far out of proportion to the benefits received=
 by it from the small discovery of better physical properties of the beta c=
rystalline form.


  As a direct result, thousands of poor patients dying, suffering from bloo=
d cancer (about 50 dying everyday) are denied treatment by the better affor=
dable product of equal efficacy of Indian Companies, and the Indian compani=
es are prevented from lawfully and honestly producing the drug locally. The=
 country is made dependent on imports for such vital commodity. The country=
 is paying heavily in terms of foreign exchange. Though requested, for what=
ever reasons, the government have not so far taken any action permissible u=
nder sec 24C or 24D of the Act to ensure continuity of production by the In=
dian companies and more importantly for the thousands of blood cancer victi=
ms.


  Again, the mere discovery of a new physical property of a known drug has =
been used to claim patent/EMR. Beta crystalline form, like the alpha form a=
nd the amorphous forms, was part of the substance already in public domain =
since prior to the application and was not a new product in 1997-98. Claim =
for novelty if any could not be attributed to the product, as only the disc=
overy of the particular physical property was new. An application for produ=
ct patent - and consequently for EMR - could not have been legitimately fil=
ed, or accepted or admitted in the mailbox, for the beta crystalline form.


  The absence of clear and unambiguous provisions in the existing PA 70:


    a.. defining 'product', 'novelty', 'inventive step' have resulted in wr=
ongful EMR being claimed, granted and enforced;


    b.. avoidance of pre-grant publication, right of public inspection, eff=
ective pre-grant search, examination and opposition for EMR have resulted i=
n the entire proceedings being shrouded in secrecy; prevented the Indian dr=
ug manufacturers and others concerned from knowledge of the applications an=
d the proceedings leading to EMR grant, and in informing and warning the Pa=
tent Controller about the apparent deficiencies, and worse still, thousands=
 of the blood cancer victims being denied continuity of their treatment wit=
h the already available generic products with disastrous consequences.


  The Government could and should have acted swiftly and decisively by perm=
itting the Indian manufacturers who had been lawfully and honestly producin=
g and marketing the product at less than one tenth of the price, by issuing=
 licences or authorizations u/s 24 C or 24 D of the Act, to continue to do =
so. To preserve and protect the fundamental rights of the honest manufactur=
ers and of the consumers, and to avoid any indecision or inaction, there is=
 also need to provide specific exceptions to patent/EMR rights for such pri=
or / honest use as permissible under Art 30 of TRIPS Agreement and also in =
compliance with the overriding mandatory requirements of the Constitution -=
 Art 14, 19 & 21 and Directive Principles of State Policy.


  The actual experience of failure on part of government in taking action u=
/s 24D in respect of Glivec EMR to protect blood cancer victims and to prot=
ect honest manufacturers, only shows that such provisions often prove to be=
 only paper assurances and not practicable.


  The existing provisions of sec 84 to 92 for grant of compulsory licences =
and government use are burdened with such elaborate time consuming procedur=
es and would take about 8-10 years to secure a CL even for such glaring and=
 publicly known and established facts of excessive drug prices, anti-compet=
itive practices, avoidance of local production and above all the most obvio=
us emergency, extreme urgency or public non-commercial use being present.


  While this experience refers to grant of EMR in respect of only one drug,=
 and that too for five years, one shudders to think of the havoc that will =
be caused when 5000 pending mailbox applications for such drugs are patente=
d for 20 year term and covering a much wider range of drugs, diseases and t=
he entire population.


  The same situation and consequences will be repeated also for the main pa=
tent grant, with much more devastating results, if as proposed by the Bill =
clauses 6 to 23, the existing provisions in the Patents Act 1970 for pre-gr=
ant scrutiny and pre-grant opposition are deleted or diluted.


  The Bill provisions by further deleting / diluting even the existing pre-=
grant scrutiny and pre-grant opposition, will only induce unscrupulous peop=
le to file and secure many more such patent claims and expose people to mor=
e such risks from false, frivolous or fraudulent claims. Recognizing the ne=
ed for such pre-grant opposition, countries like Australia, New Zealand, Pa=
kistan, South Korea have made / retained post 1995, such provisions in thei=
r patent laws. Even USA has initiated steps to make third party interventio=
n more effective by amending its Patents Law in 1999 to specifically provid=
e rights to third parties to object to patent grant, with a right of appeal=
.


  Much more effective provisions for responding to such situations have to =
be provided in the law. To avoid such situations, there is urgent need to p=
rovide in the Patents Act 1970, adequate, effective and practicable compuls=
ory licence / government use provisions as permissible under Art 31 of TRIP=
S Agreement read with Art 5A(2) & (4) of Paris Convention. Even in USA, man=
y Bills are pending in the US Congress to expedite generic competition to c=
ontrol drug prices and such abuse of the patent grant. (Extract from one su=
ch Bill are reproduced below)


  In this context finding and recommendations of:-


    1.. Justice Aiyangar commission (which provided the guidelines for draf=
ting of Patent Act 1970);


    2.. Doha Declaration on Health Care November 2001;


    3.. Joint study and Report of WHO and WTO of August 2002;


    4.. The UK Commission on IPR - September 2002 (officially endorsed also=
 by UK Government) - of which Dr. Mashelkar was also a member;


    5.. Australian Commissions Report (2000).


  are instructive and helpful. Relevant extracts reproduced in Annexure 2.


  The magnitude of the problem - out of 5000 mailbox applications only abou=
t 300 may qualify for patent grant if properly scrutinized: -


  These are not merely isolated instances of 'me-too' type claims. The need=
 and importance of proper and effective pre-grant scrutiny and pre-grant op=
position for these 5000 mailbox applications can be appreciated when we loo=
k at the undisputable evidence and public record showing that during the co=
rresponding period 1995 to 2003, only about 300 new drugs applications (NDA=
s) were approved by the DCGI under the Drug Rules requiring every new drug =
to obtain such approval. The obvious inference is that the drugs covered by=
 the 5000 mail-box applications are not 'new' to require such approval, and=
 would not satisfy the patentability criteria of 'novelty'.


  Thus large majority of the mail-box applications are likely to be for 'me=
-too' type drugs - i.e. for claims in respect of subject matter already in =
public domain before 1995 or before the relevant priority date, or for mere=
 repetitive claims or claims for marginal or insignificant improvements.


  If properly scrutinized, all such product patent claims for 'me-too' type=
 drugs would fail to satisfy the claims. Such claims, in effect, withdraw p=
art of the matter already belonging to the public, and deprive other citize=
ns of what rightfully belongs to them, and impose even on illiterate, poor =
housewives and farmers in remotest villages, restrictions and serious legal=
 obligations.


  Corresponding to the longer patent term, more extensive rights for produc=
t patents, and stronger protection to be provided as per TRIPS Agreement, a=
nd the costs and burden on the State and the Society to protect worthless c=
laims, provisions and standards relating to technological innovation requir=
ed to support patent claims under the existing Patents Act 1970, have also =
to be substantially raised and claims for insignificant or marginal improve=
ments have to be disallowed. In view of the increasing tendency to make fal=
se or frivolous claims, pre-grant search and pre-grant opposition have to b=
e further strengthened - rather than removed or made ineffective as propose=
d by the 2003 Bill.


  Problem of 'me-too' drugs and the remedy being adopted in USA -

  An indication of the gravity and magnitude of the problem of 'me-too' dru=
gs and exploitative drug prices which India may have to face under product =
patents, and guidance for the possible remedy for it, is also available fro=
m the actual experience of such problem of 'me-too' drugs, abuse of 'ever-g=
reening' and outrageously high drug prices, and the legislative and adminis=
trative measures being adopted for the purpose, in USA.


  'Me-too' drugs - the extent of problem

  Every year as against about 70-80 new drug applications (NDAs) approvals =
by US FDA about 4000-5000 patent claims are made / granted. Out of this, on=
ly about 20 are for new chemical entities (NCEs), involving substantial R&D=
, and the remaining about 50 are salts, esters, combinations, formulations =
and new uses based on such NCEs - which involve relatively much less R&D. T=
he remaining patent applications - may only be for 'me-too' drugs.


  President Bush in October 2002 expressed serious concern: -

  ".... When a drug patent is about to expire, one method some companies us=
e is to file a brand new patent based on a minor feature, such as the color=
 of the pill bottle or a specific combination of ingredients unrelated to t=
he drug's effectiveness. In this way, the brand name company buys time thro=
ugh repeated delays, called automatic stays, that freeze the status quo as =
the legal complexities are sorted out".


  The US Congress is also seriously concerned about the problem exploitativ=
e drug prices. Number of Bills under the title 'Greater Access to Affordabl=
e Pharmaceuticals Act' - (S. 54 and others) are under active consideration =
of the Congress which provide for expeditious generic competition to contro=
l the abuses and the heavy losses to the consumer and the nation (officiall=
y estimated at US $ 8 to 10 billion), based on the Findings: -

  (1) prescription drug costs are increasing at an alarming rate and are a =
major worry of American families and senior citizens;


  (2) enhancing competition between generic drug manufacturers and brand-na=
me manufacturers can significantly reduce prescription drug costs for Ameri=
can families;




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