Ever-greening of Patents and Public Health: Emerging Issues
Dr. Ashwani Mahajan, Reader, Department of Economics, PGDAV College, University of Delhi
Patents and intellectual property rights are no new terms. First patent law in India came into being in 1852. This patent law was obviously aimed at giving preference to foreign pharmaceutical companies. After independence Indian Patent Act 1970 was enacted after deliberating on the issue for 15 years. This law was aimed at providing medicines at affordable prices to the masses, apart from giving encouragement to research and development and domestic competition while protecting interests of the patent holders. Provision was made only for the process patent and to ensure the availability of medicines at affordable prices to the public, provisions were made for compulsory licensing. Royalty to the patent holders was limited to 5 percent for use of patent by others and for patent to be effective, domestic production was the essential condition.
Then came TRIPS agreement under WTO. The government gave the commitment to amend Indian Patent Act in tune with TRIP’s agreement, which necessitated the inclusion of provisions in the Patent Act, which were undoubtedly not in the national interest in general and public health in particular. Indian Patent Act was amended which led to inclusion of Product Patent, limiting the scope for compulsory licensing, lengthening the period of patent to 20 years and patent protection, even in case there is no domestic production of that product and patent protection was provided even on the import.
Thanks to Indian Patent Act 1970, India emerged as an important production centre for medicines. Medicines are available in India at the cheapest prices. Our pharmaceutical industry in comparison with the rest of the world served not only our own country; rather it emerged as one of the important exporters of medicines all over the world, especially to the developing countries. While Indian Patent Act was being amended by the government under the pressure from WTO appeals were coming from not only within India but even from other countries including WHO to safeguard public health. Under severe criticism from different quarters the government was forced to introduce amendments in Indian Patent Act (Amendment) Bill 2005. Under these amendments provisions were introduced so as to allow the existing domestic production of medicines to continue despite the Patent. Another provision was made to discourage continuation of Patent Right beyond the period of patent by preventing the grant of frivolous patents and ever-greening.
“Ever greening” is when patent owners attempt to extend the patent monopoly by seeking a new patent that “updates” the first one before its expiration. This is usually done by claiming things such as an “inventive” method for administering the pharmaceutical compound covered by the base patent. For pharmaceutical products, this means an extended monopoly that excludes generic drugs from the market.
Ever greening, in one common form, occurs when the brand-name manufacturer literally “stockpiles” patent protection by obtaining separate 20-year patents on multiple attributes of a single product. These patents can cover everything from aspects of the manufacturing process to tablet colour, or even a chemical produced by the body when the drug is ingested and metabolised by the patient.
According to European Generic Medicines Association ,in the 1980s the list of a drug’s properties eligible for patenting was relatively limited. They included:
Primary uses
Processes and intermediates
Bulk forms
Simple formulations
Composition of matter
During the 1990s the catalogue (1) grew to 18, nearly four times the amount of a decade earlier, to include patents on such additional aspects as:
Expansive numbers of uses
Methods of treatment
Mechanism of action
Packaging
Delivery profiles
Dosing regimen
Dosing range
Dosing route
Combinations
Screening Methods
Chemistry Methods
Biological Target
Field of use
EXPERIENCE OF EVER GREENING IN OTHER COUNTRIES
When ever-greening through patent strategies, the originator manufacturer simply keeps adding patents to the product (whether legitimate or not), essentially forcing the generic manufacturer to choose between waiting for all the patents to expire and applying for marketing authorisation anyway, running the risks of litigation and the associated costs and delays.
Drug patent evergreening is the single most important strategy that multinational pharmaceutical companies have been using since 1983 in the US (and since 1993 in Canada) to retain profits from "blockbuster" (high sales volume) drugs for as long as possible.
When the original patent over the active compound of a brand-name drug is due to expire, these drug companies often claim large numbers of complex and often highly speculative patents. Laws in the US and Canada require manufacturers to notify the original brand-name patent holders of their intention to market copies at the expiry of the original patent. The original patent holders can then threaten these potential generic competitors with breaching their now "evergreened" patents and seek a court order preventing their marketing approval.
The ultimate consequence could be elderly and poor patients paying several times the present price for drugs.
The problem is a severe one in the US. In 2002, an extensive inquiry by the US Federal Trade Commission found that as many as 75 per cent of new drug applications by generic drug manufacturers were the subject of legal actions under patent laws by the original brand-name patent owner. These were driving up US drug costs by keeping the cheaper generic versions off the market.
In Canada, a similarly extensive investigation by the Competition Bureau revealed similar problems with drug patent evergreening. It found that the hundreds of legal actions involving evergreening claims were having a disastrous effect on drug prices.
The evergreening article in the Australia-US FTA (article 17.10.4) is far worse than the US or Canadian versions. For the first time it links the operations of our Therapeutic Drug Administration (the drug safety and efficacy body) with supervising patent law.
It requires that TGA drug marketing approval be "prevented" indefinitely (not for the 30-month and 24-month periods as in the US and Canada) whenever any type of patent (including a speculative evergreening patent) is merely "claimed".
The Generic Medicines Industry Association of Australia, in its submission to the Senate inquiry on the FTA, stated that this evergreening provision could lead to "long delays or generic equivalents not reaching the market".
If the big companies succeeded in delaying generic drug market entry for as little as 24 months, the federal cost for just the first few highest expenditure PBS drugs could be $1.5 billion between 2006 and 2009. Public hospital drug expenditures could increase by 12 per cent over the same period.
ATTEMPTS TO RESTRICT EVER GREENING IN INDIA
As per the amendments readied by the commerce and industry ministry and passed by the Parliament, scope of patentability was restricted by expounding mandated terms namely inventive step and new invention. A patentable pharmaceutical substance will now be any new entity involving one or more inventive steps (as redefined). In this regard an issue was raised in the Parliament about the pharmaceutical substance, that whether it will be a New Chemical Entity (NCE) or a New Medical Entity (NME). The matter was then decided to be referred to a Technical Expert Committee to go into the question of whether it would be TRIPS compatible to limit the patent to New Chemical Entity of New Medical Entity involving one or more inventive steps. Apart from this another issue was raised that whether it would be TRIPS compatible to exclude micro-organisms from patenting Hence, an Expert Committee was constituted to examine these issues. This Expert Committee headed by Dr. R.A. Mashelkar submitted its report on the issue of TRIPS compatibility of NCE or NME and recommended as follows:
“It would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only. However, every effort must be made to provide drugs at affordable prices to the people of India. Further, every effort should be made to prevent the grant of frivolous patents and ‘ever-greening. Detailed Guidelines should be formulated and rigorously used by the Indian Patent Office for examining the patent applications in the pharmaceutical sector so that the remotest possibility of granting frivolous patents is eliminated.
NOVARATIS LOST EVERGREENING TEST CASE
Pharmaceutical giant Novartis first file a suit against Indian companies producing generic version of cancer drug imatinib, which was marketed as Glivec (or Gleevec in the US) after second amendment of Indian patent Act 1970, claiming generic producers of the drug violates it’s (Novartis’s) patent rights. The company was granted interim relief and wad granted one of first exclusive marketing rights.
As a developing country, India was not required to full comply with TRIPS rules, which include pharmaceutical product patents, until 2005. in the interim, however, it introduced a temporary system of ‘exclusive marketing rights’ for new products that would then be considered for patents with the advent of full TRIPS compliance. When Novartis was granted one of the first such exclusive marketing rights. For Glivec in November 2003, the price increased from $230 to $2,740.
After India reformed its patent laws to make them compliant with WTO rules in 2005, Novartis was refused a patent for Glivec on the basis that the beta crystalline from did not provide a significant enough “enhancement of efficacy” of the original imatinib molecule. Novartis responded with a writ to the High Court appealing against the ruling. It argued that Section 3(d) of the Indian Patent Act was “unconstitutional as it is vague, arbitrary and violative of Article 14 of the constitution (right to equality)”, and alleged that it contravened India’s obligations under the TRIPS Agreement.
Defending the patent-worthiness of Glivec, Novartis research chief Paul Herrling said “medical progress occurs through incremental innovation. If Indian patent law does not recognise these important advances, patients will be denied new and better medicines”.
India attempts to differentiate genuine innovation from evergreening by using the “enhancement of efficacy” concept. The High Court suggested only that efficacy can be defined as the ability of a drug to produce a desired therapeutic effect.
Novartis maintains that Glivec boosts bioavailability (i.e. the degree to which the drug is absorbed by the patient) by 30 percent over the original form of imatinib, which should constitute an enhancement of efficacy. The Chennai Patent Ofice disagreed in rejecting the application.
THE ISSUE
So far we have talked about the technicalities and what Expert Committee had recommended. It is not merely a question of what definition of pharmaceutical substance is adopted. It is a question of whether our people would be able to afford medicines and can enjoy the right to live as provided by our constitution. Though apparently Mashelkar report seems to be concerned with provision of medicines at affordable prices, prevention of ever-greening of patents and grant of frivolous patents, but its recommendations in fact go against what it says. Theoretically, the logic for patent protection is straightforward. Discovery of new medicines involves heavy cost, those who invent (companies) need an incentive to make this investment. Grant of patent provides this incentive and protection.
But, practically issue is not so straightforward. Those who have invented medicine were given protection for a long period. Now innovative drugs are no longer coming in a big way. They (companies) have very little to add in terms of new medicines. Now their strategy is to get minor tweaks to existing drugs patented and thereby get an ever-extended monopoly wherever possible. In trade circles this phenomenon is called ever greening. In real terms recommendations by Mashelkar Committee actually allow these companies to get this ever extended monopoly by way of ever-greening of patents. This phenomenon is also known as Swiss Patents.
MASHELKAR COMMITTEE’ ARGUEMENTS
1. Given the terms of reference of the committee to find out whether it would be TRIPS compatible to limit the grant of patent for a pharmaceutical substance to a New Chemical Entity or to a New Medical Entity by involving one or more inventive steps. Analysing the TRIPS agreement and also the practice in different countries, Mashelkar Committee comes to the conclusion that it would not be TRIPS compatible to limit the grant of patent for a pharmaceutical substance to a New Chemical Entity or New Medical Entity.
2. It would also not be in the national interest to limit grant of patent for a pharmaceutical substance to a New Chemical Entity or to a New Medical Entity. For this the argument put forward by the committee is that Restricting patentability just to NCEs or NMEs could have both legal and scientific ramifications. There is a perception that even the current provisions in the Patents Act could be held to be TRIPS non-compliant. Drug discovery research is still finding its feet in India. Though many companies are investing, it will at least be a decade before a critical mass is in place and results start accruing. Thus, restricting patentability to just NCEs would mean that most of the pharmaceutical product patents would be owned by MNCs.
3. The report suggests not to confuse ever greening of patents with incremental innovations.
HOLES IN THE REPORT
1.It would be interesting to note that Mashelkar’s report came in December 2006 ,when Novaratis’s case was pending in the court. Faced with severe charges of plagiarism ,when Mashelkar was preparing to withdraw his report ,Novaratis issued a press statement stating” A report from the Mashelkar committee, commissioned by Indian Government and comprised of Indian experts, supports many of the concerns about Indian patent law expressed by Novaratis, mentioning that the laws are not complying with international agreements like TRIPS."
2. Mashelkar Committee while recommending on the issue, chose to ignore the arguments put forward by eminent jurists and experts, different stake holders and groups. It would not be out of context to mention that while ignoring the arguments, contrary to its recommendations, it borrowed (without acknowledgement) from UK based research funded by Interpat, an association of major multinational pharmaceutical companies. The question is if this committee of five renowned experts was to base its recommendations on secondary sources and that too on research funded by the beneficiaries of the recommendations, why it took a long duration of one and a half years to finalise its report.
3. While amending its patent law the Parliament included some unique provisions to prevent ever-greening of patents. It stipulated that if the patent holder wanted a patent for an improvement on an already existing drug it must show the improvement actually made the drug more effective. Though, this stipulation is very logical but it does not concur with the interest of the multinational corporations. The TRIPS agreement explicitly gives us the flexibility to set higher patent standards. The Mashelkar Committees report ignores these flexibilities and declares the present provisions in the Patent Act incompatible with TRIPS.
4. The report though suggests not to confuse ever-greening of patents with incremental innovation, it fails to really distinguish these two.
Dangers Ahead
1. The recommendations of the committee if accepted would go a long way to translate existing patents into an infinite monopoly and artificially high prices for essential medicines for infinite period because only one manufacturer is allowed to supply the market.
2. Hard earned protections placed in the existing law as a result of continuous efforts by experts and activists may also become doubtful and multi national corporations may use these recommendations as a weapon to build up argument against the protections available in the existing law.
Mashelkar retracts
After having thoroughly been exposed, Dr. Mashelkar the chairman of the committee has sought to withdraw the report on the grounds of 'technical inaccuracy and plagiarism' and has requested for three months time to reexamine and resubmit the report. But it is a fact that the committee has not only recommended in tune with the dictates of MNCs, but has also misstated India right to define the scope of patentability and thereby threatened the access to medicines by the masses. The committee therefore loses the moral right to continue and re examine and resubmit its report
References:
Eric Larson, A presentation entitled “Evolution of IPR and Pharmaceutical Discovery and Development”, at the conference: “Intellectual Property Rights: How Far Should They Be Extended?”, organised by The National Academies, Committee on Intellectual Property Rights in the Knowledge-based Economy (22 October 2001).
Eric Larson’s comments during panel discussions in the verbatim report of the conference proceedings, pp 119-127.
Evergreening of Pharmuceutical Market Protection ,www.egagenerics.com
Report of Technical Expert Group on Patent Law Issues , Government of India, Ministry of Commerce & Industry, Department of Industrial Policy & Promotion, February 2006
Indian Patent (Amendment) Act,2005,Government of India
Appendix 1
Extracts of the Report of Technical Expert Group on Patent Law Issues
(a) New Chemical Entity
Terms of Reference: Whether it would be TRIPS compatible to limit the grant of patent for pharmaceutical substance to new chemical entity or to new medical entity involving one or more inventive steps:
5.2 The term "new chemical entity" appears for the first time in International Intellectual Property agreements in the TRIPS Agreement of 1994, under Article 39.3:
"Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, (emphasis added) the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public or unless steps are taken to ensure that the data are protected against unfair commercial use."
5.3 According to the United States (US) Food and Drug Administration (FDA), a new molecular entity (NME) or new chemical entity (NCE) means a drug that contains no active moiety that has been approved by FDA in any other application submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act.
5.4 The term "new medical entity" has neither been used nor defined in the TRIPS Agreement.
5.5 Article 27 of the TRIPS Agreement elaborates the scope of patentable subject matter as follows:
“1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.
2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.
3. Members may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;
(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.”
5.6 Granting patents only to NCEs or NMEs and thereby excluding other categories of pharmaceutical inventions is likely to contravene the mandate under Article 27 to grant patents to all 'inventions'. Neither Articles 7 and 8 of the TRIPS Agreement nor the Doha Declaration on TRIPS Agreement and Public Health can be used to derogate from this specific mandate under Article 27.
5.7 Article 1 of the TRIPS Agreement requires compliance to the provisions of the Agreement, while TRIPS plus provisions are optional. This would mean that limiting grant of patents to pharmaceutical substances to new chemical entities only, and excluding new forms of crystals, polymorphs, etc., if they satisfy the criteria of patentability, is not consistent with TRIPS Agreement.
5.8 Section 2 (1) (j) of the Indian Patents Act defines “invention” as a new product or process involving an inventive step and capable of industrial application. The term “pharmaceutical substance” has also been defined in Section 2 (1) (ia) as any new entity involving one or more inventive steps. The term “inventive step” has been defined in Section 2 (1) (ja) as a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art. Thus, a chemical to be patentable must be new, non-obvious and have utility. However, Section 3 excludes certain inventions from being patented. This, inter alia, includes the exclusions under Section 3 (d) as under:
“The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.
Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”
Thus, the new form of a known substance would not be patentable unless it differs significantly in properties with regard to efficacy.
National Interest perspective
5.9 If the aim of limiting patents to new chemical entities is to prevent a phenomenon loosely referred to as 'ever-greening', this can be done by a proper application of patentability criteria as present in the current patent regime.
5.10 It is important to distinguish 'ever-greening' from what is commonly referred to as 'incremental innovation'. While 'ever-greening' refers to an extension of a patent monopoly, achieved by executing trivial and insignificant changes to an already existing patented product, 'incremental innovations' are sequential developments that build on the original patented product and may be of tremendous value in a country like India. Therefore, such incremental developments ought to be encouraged by the Indian patent regime.
5.11 Restricting patentability just to NCEs or NMEs could have both legal and scientific ramifications. There is a perception that even the current provisions in the Patents Act could be held to be TRIPS non-compliant. Drug discovery research is still finding its feet in India. Though many companies are investing, it will at least be a decade before a critical mass is in place and results start accruing. Thus, restricting patentability to just NCEs would mean that most of the pharmaceutical product patents would be owned by MNCs.
5.12 In case of patenting of drugs, the protection to various forms of same substance (salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixture, etc.) is often seen as ‘ever-greening’ (extending incremental protection to a subsisting patent) and hence such protection is objected to.
5.13 In most countries, patenting of an invention for different forms of the same substance is subjected to the test of novelty, non-obviousness (unexpected effect) and utility before it is granted patent protection. Such a protection in the form of incremental inventions in respect of known and new molecules or a process potentially provides an added advantage to an inventor or a firm to retain its market share or capture a space in the established market. However, patenting an invention does not imply that a person can practice the invention; he would have to exercise due diligence and ensure that the rights of others are not infringed.
5.14 Many drug industry stakeholders feel that the use of the expression “new chemical entity” under the Patents Act would lead to many interpretations. While some Indian drug industry representatives feel that limiting grant of patents to new chemical entities will not be conducive to competitive growth, some others feel that patent protection should only be given based on the strict compliance of the patentability criteria. Many Indian industry representatives are not in favour of widening the scope of patentability.
5.15 The group examined the current level and type of R&D innovations that the Indian drugs and Pharma industry was undertaking. Annexure IV and V provide some representative samples of international patents filed by the Indian industry. It is clearly seen that most of them are based on incremental inventions.
5.16 In the light of the above discussion, it would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only. However, every effort must be made to provide drugs at affordable prices to the people of India. Further, every effort should be made to prevent the grant of frivolous patents and ‘ever-greening’. Detailed Guidelines should be formulated and rigorously used by the Indian Patent Office for examining the patent applications in the pharmaceutical sector so that the remotest possibility of granting frivolous patents is eliminated.
Appendix 2
Extracts from Patent (Amendment) Act,2005
3. In section 3 of the principal Act, for clause (d), the following shall be substitued, namely:—
"(d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.
Explanation.—For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to effica
We could have a drug treatment center for cancer today but the politicians seem to unplug the funds for such a type of research exactly when scientists are almost ready to discover the cure... I wonder why.