India’s patent laws balance producer and consumer interest. Big Pharma would like that to change, to beat back generic competition.

The US pharmaceutical industry and chamber of commerce have launched an all-out disinformation campaign against the Indian Patents Act. They have enlisted allies in the US government, including members of Congress, the US International Trade Commission, Secretary of State John Kerry, and even President Barack Obama, to carry their claims to the highest levels of the Indian government — most recently during Manmohan Singh’s visit to the US.

The primary claims in this disinformation campaign are that India is violating US-based global norms on patent rights, that it is adopting patenting criteria not authorised by international law, and that it is discriminating against US companies through protectionist policies that shield Indian generic companies and steal US jobs. Every one of these claims is false — in multiple ways.

Unilateral US moves

The US industry claims that the patent cases that Big Pharma has lost in India involve drugs that have been patented in the US and other countries and therefore India’s actions are illegal.

Apparently, Big Pharma wishes the US could impose its pro-monopoly IP laws on every other country. In fact, international norms are set by the WTO agreement on Trade-Related Aspects of Intellectual Property (TRIPS). The US and Big Pharma got much of what they wanted in TRIPS but not everything.

TRIPS preserved significant interpretative flexibilities (Article 1.1) and explicit flexibilities concerning patentable subject matter, disclosure requirements, and standards of patentability (Article 27). It allows countries to balance the interests of IP owners and users, to prioritise public interest and promises technology transfer (Articles 7, 8). TRIPS expressly allows limitations and exceptions to IP rights (Article 30), compulsory/government use licences on any ground (Article 31), and parallel importation (Article 6). TRIPS allows opposition procedures and payments of royalties in lieu of injunctions.

It is simply irrelevant legally whether a particular patent has been granted in another country. Countries have flexibilities to enact much more stringent patent standards than the US.

This is exactly what India has done and it has drawn a line in the sand against granting secondary, evergreening patents on minor modifications of existing medicines, on new uses of existing medicines, and combinations of existing substances. In fact, India has gone further than needed towards liberalisation because it provides patent protection for incremental changes where a significant increase in therapeutic efficacy is demonstrated.

India’s patent rejections and its single compulsory licence are domestically, internationally, lawful.

Preposterous position

Novartis, Pfizer and US Congressman Lee Terry’s claim that India pulled a fast one when its Supreme Court rejected Novartis’ 1997 patent application on a compound that was revealed four years earlier in a 1993 foreign application is legally preposterous. India didn’t have to grant patents on pharmaceuticals innovated before TRIPS’ effective date in 1995, and it certainly doesn’t have to grant secondary patents relating to the same compound thereafter. The Glivec patent application was properly rejected.

US industry complains that other patent decisions have gone against it. Guess what — Pharma loses patent cases in the US and Europe too. In fact, over 70 per cent of generic company challenges against innovators are successful. Nearly 40 per cent of pharmaceutical patent applications in the US are rejected.

Too bad if a company wastes its time on me-too drugs and extending their existing monopolies, it’s going to lose out — more so in a country with rigorous patent application examinations.

Just as it is entitled to weed out weak patents, India was fully justified in issuing a compulsory licence in 2012 on Bayer’s Nexavar, a $60,000-a-year cancer medicine which was grossly overpriced and available to only a tiny fraction of Indian patients. Compulsory licences have been lawful since the 19th century, are directly authorised by TRIPS and widely used in the US and elsewhere.

Big Pharma claims that compulsory licences aren’t available for cancer drugs — a lie; or they are only available for national emergencies — another lie; or that India is establishing a general exception to patents for pharmaceuticals — an even bigger lie.

Sovereigns retain the right under TRIPS to issue compulsory licences or allow public, non-commercial use of patented products/ processes as long as correct procedures are followed and adequate remuneration is paid.

Last but not least, Big Pharma claims that India’s drug regulator is violating its rights by registering generic equivalents of patented drugs and allowing their sale. So does the EU. It is only the US and a handful of other countries that require drug regulators to act as ‘patent police’ and deny marketing approval for generics.

If a drug company thinks its patents are being violated, it has a simple solution — go to court and see if a judge agrees. But Big Pharma doesn’t want to spend its money going to court and risk having its patent declared invalid.

It wants to spend taxpayers’ resources instead and have government enforce its private rights.

Bogus claim

US industry claims that it is being picked on. But since 2005, India has granted 161 patents to Pfizer, 333 to Sanofi, 243 to Roche, 200 to Novartis. I guess those patents don’t count.

The only ones that count according to Pfizer’s IP Chief, Roy Waldron, are the ones they didn’t get. During this time, Abbott’s market share in India increased from 2.3 per cent to 7 per cent, Pfizer’s from 2.5 per cent to 3.2 per cent, and Merck’s from 0.42 per cent to 1.1 per cent.

Foreign pharmaceutical companies have lost the bulk of patent cases in India because they file nearly 90 per cent of patent applications. This isn’t some big protectionist conspiracy.

This is a government patent office and a judiciary shielded from government interference that is applying the law to the patent cases before it.

Most of the favourable decisions go to Big Pharma and most of the negative ones do too — what’s the great mystery?

What’s really going on?

Big Pharma is salivating to exploit middle- and upper-income patients in India and other ‘pharmemerging’ countries and wants to beat back generic competition.

To ensure this, the US pharmaceutical industry and its agents will always try to corral and hamstring the Indian generic industry or turn it into junior partners. If Pharma can’t win fair and square, it will malign generics, usually about quality.

It’s no surprise that the timing of the Big Pharma disinformation offensive is right around the time that Brazil and South Africa are launching their own patent law reforms, following in India’s footsteps.

The EU’s proposals in the EU-India FTA negotiations or the US’ IP demands in the Trans-Pacific Partnership Agreement negotiations are clear evidence of the US and Europe’s long-term objectives to secure monopoly rights for their IP industries.

So far, India has stood firm. It has countered Pharma propaganda with facts and it has done so politely.

But sometimes it’s appropriate to call a lie a lie, instead of merely trying to cure it with information.

Pharma hopes if it repeats its myths and misrepresentations often enough, a gullible public will believe it.

But India must stand firm and protect its high-standard patent regime and its status as the pharmacy of the developing world — millions of lives are at stake.

(The author is a professor at Northeastern University School of law and senior policy analyst for Health GAP.)

(This article was published on October 11, 2013)
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