India’s Intellectual Property Rights

Regime And The Pharmaceutical
Industry
Prepared By:

Rishi Raninga
Ronald Kiro
Shailie Naik
Shivani Nehru
Mittal Parmar

(2014C03)
(2014C04)
(2014C08)
(2014C10)
(2014C31)

Archit Kannan
Dony Joseph
Gauri Singh
Harsha Tandure
Jery Eapen

(2014C44)
(2014C52)
(2014C54)
(2014C55)
(2014C59)

Contents
 Overview of the Case
 Patents in Pharma Industry
 Patent Act 1970
 Indian Pharma Industry
 Comparative Study

 Global Environment
 Other Pharma Cases

Overview of the Case
 Cipla Ltd., Bombay based Indian Pharmaceutical drug
manufacturing company offered to sell “Triple-therapy
AIDS” drug cocktails in Africa for $350 a year per
patient in February 2001.
 $600 a year to larger government programs.
 $600 offer to African government was $400 below the
price set by pharmaceutical firms that held the
patents for those drugs.

Impact of Cipla‟s Move  This move ignited firestorm Storm in the West. below the $10.000 to $15.  Cipla‟s move –“political trick” “compassionate” “shrewd”  The controversy between Indian Pharmaceutical Companies and the larger US and European MNCs  Marrakesh Agreement.  MNC‟s in agreement with WHO had agreed to cut down their prices for AIDS drug combinations to African countries to $1000 a year per patient.0000 amounts normally charged in developed countries in May 2000. .  Cipla price cut forced some MNCs to reduce the price again.

 It took almost 10-15 years and $500 million to develop and bring a new drug to the market.Patents In Pharma Industry  To promote development and innovation in drug therapies to improve human health. long term financial investments in R&D.  This discovery made Pharma companies to make huge. .

 In 1641. the first patent in the American colonies was issued in Massachusetts for a method of manufacturing salt.Concept of Patent  The English word “patent” was derived from the Latin patere (to be open) and referred to an open letter of privilege from a sovereign. . the Venetian Senate regularized the practice of granting patents with rules and administrative procedures. patent protection became an increasingly important device for encouraging innovation that allowed society to progress.  With the Industrial Revolution.  In 1474.

moreover.Patent Protection in Pharma Industry  To promote development and innovation in drug therapy's to improve human health. This discovery made Pharma companies to make huge investments in R&D. were never successfully commercialized due to a number of factors. . such as the discovery of even better therapies that would make other research projects obsolete.  Patents that resulted from R&D projects.

establishing for the first time in India a system of patent administration under the office of controller of patents.  Exclusive rights were given to the manufacturer to “sell”.Early Patent Law In India  British enacted the EXCLUSIVE PRINCIPLES ACT(1856) to protect invention in India. . “make” and “authorize” others to do so.  PATENT AND DESIGN ACT OF 1911:  The 1911 act codified the patent regime in much greater detail.

but wanted a regime that primarily rewarded the domestic industry. not MNCs. which were among the highest in the world.  Many commentators in India supported the concept of patent protection for inventors. .  Pharmaceutical MNCs saw the patent issue as a direct threat to their livelihood and felt the situation demanded a forceful political response. they argued. resulted in exorbitant drug prices.Challenges to Patent Act  Dependency on imported products.

. Products were no longer patentable. Compulsory licensing changed wrt to third party access Eliminated equating imports with working a patent.1970 Patent Act Time period of patent coverage shortened from 16 to 5 years.

 Drugs divided into 4 categories: 1) Lifesaving 2) Essential 3) Less essential 4) Non-essential Foreign Exchange Regulation Act of 1973  Aimed to reduce dominance of foreign countries.Related Government Policies Price Controls (Drug Price Control Offer DPCO)  Measure to promote self-reliance  DPCO placed price ceiling on certain mass products.  Allowed equity investment of 40% by foreign firm in Indian venture. .

Evolution of Indian Pharmaceutical Sector .

Top Pharmaceutical Companies .

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so as to improve efficiency and reduce the operating costs .2B Joint Ventures  Multinational companies are collaborating with Indian Pharma firms to develop new drugs  Pfizer partnered with Aurobindo Pharma to develop generic medicines  Six leading pharmaceutical companies have formed an alliance „LAZORR‟ to share their best practices.Mergers and Acquisitions & 100% FDI  2014: Sun Pharma takeover Ranbaxy for $3.

Research and Development  Indian pharmaceutical companies spend 6 per cent of their total turnover on R&D .

Creation of a New Global Environment  Creation of WTO : permanent successor institution to oversee global trade  WTO‟s primary function – Resolve trade disputes (among 142 member nations)  Rules of new international trade regime:  GATT. Agreement on Trade Related Aspects of Intellectual Property Rights . General Agreement for Trade in Services  TRIPS. Trade in goods  GATS.

with industrial applications  Provision – No nation to discriminate based on technology .Significance of TRIPS  IPR in 7 areas :  Copyrights  Trade secrets  Patents  Industrial designs  Trademarks  Layout designs for ICs  Geographical indications  Products and processes patentable for 20 years  Redefinition of Patent – New. inventive.

adverse effect on US Pharma  1992 – India‟s denial of patent protection unreasonable  Imposed penalty – suspended duty free privileges “India's intellectual property rights related decisions have affected the biopharma industry much more than the other sectors” . PhRMA (Pharmaceutical Research and Manufacturers of America). CEO. a group of US-based drug makers .John J Castellani.Induced Trade Tensions  India listed on US “priority watch list”  1990 – Indian patent protection weak.

.  India is being seen as an outlier in recognising and enforcing patent rights. the future of new medicines is at risk  Incentives for the research-based pharmaceutical industry to invest over $ 1 billion and 10-15 years in the development of a single new medicine will be undermined  Challenges to the IP ecosystem in India are seen as a serious concern to the future climate for innovation across several sectors.Points of Contention  If countries show scant respect for IP protection. and this perception could weaken India's investment climate.

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Special 301 Report .

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 Worst case scenario: Modi continues status quo. But for India.just like South Korea. Then India can retaliate by dragging them to WTO. sanctions for sanction then USA industries will be hurt more. we‟ll be removed even from the priority watch list. Even they knew Congress won‟t come in power again. because they hope  Positive solution: New government will address the issues. As such. USTR reviews the trading partners on annual basis.e. after all. in fall 2014 (i. Late September 2014). Hence Worst case scenario unlikely. if Modi takes strong initiatives to enforce IPR in MNCs‟ favor. Philippines etc. So. our patent regime is compliant with TRIPS (Trade related intellectual property rights).USA did not move India to the priority foreign country (Danger zone). Obama puts India on “priority foreign country status” = puts sanctions under US trade law. Besides India can also adopt tit-for-tat. USTR has planned an Out-of-Cycle Review (OCR) of India. .

Developing Countries and Indian IPR .

Developed Countries and Indian IPR .

CEO of Pfizer. Hamied owner of Cipla  Cipla was earning by selling Pfizer‟s Sidenafil -viagra tablet at 1c per pill in developing countries as Erecto that Pfizer was selling at 10 $ per pill!  To Henry Mackinnel.  One of the most prominent opponent of TRIPS was Dr. .Internal Debate on Indian Patent Act 1970  BJP strongly protested the revival in the Indian Patent Act 1970 then. the business model of Cipla was the reason to support the strong patent laws to carry out international business.

MNC gives 10% profit on such products. Product can also be licenced. Anji said: If you spend Rs. reddy‟s itself had licenced its two molecules to Danish company  Difficulty is to carry out the clinical development in the developed part of the world.  Dr. Reddy‟s view  Dr. you can start developing new molecule and thus this way MNC would focus on research where margin is higher and might give its generic drug business away to the local drug manufacturers in the developing countries.  Dr. Reddy‟s was lobbying the indian government to enforce and adopt international rules. Reddy‟s founder Dr.Dr. . 10 Crore.

Thus only a small part of the market will be affected by the new regime  India is governed by a government which relies more on populist politics for survival and this would ensure that the best interests of the population is kept in mind without buckling too much under international pressures.Facts to gauge the impact of the introduction of pharmaceutical patents in India  Consistent growth rate of the Indian economy  Rising income levels  Increasing penetration of insurance on all fronts. especially after allowing entry of private players  For the 60% of the "poor" in India. All in all. India stands to gain more in the new patent regime with the inherent costs being marginalized by several factors . price rise and demand sensitivity due to patent introduction is irrelevant. who currently do not have access to pharmaceuticals.

asked the Delhi High Court to bar Mumbai-based Glenmark from selling two popular antidiabetic drugs.  MSD's move came a week after Glenmark Pharma launched generic versions of a range of anti-diabetes products sold by the US company under the brand names Januvia and Janumet. the third-largest pharma company in the world by revenues. Glenmark branded its medicines Zita and Zita Met. .Merck unit sues Glenmark Pharmaceuticals for infringing patent on diabetes drugs  US-based MSD (Merck Sharp & Dohme) Pharma.

Glenmark has used this route to get an approval to launch the drug. Cipla and Natco Pharma had tried to launch anti-cancer drugs in the Indian market through this route. Januvia and Janumet are patented and enjoy IP protection of 20 years in India. as long as the drug has been around for four years. . However. there is nothing that stops Glenmark from launching the drug. A drug regulator cannot hold back an approval because of an existing patent. state-level regulators can grant marketing approval even if a patent exists.  Glenmark is the third Indian company to use this route to launch a patented drug. under the Drugs and Cosmetics Act of India.  From the drug regulatory side. Under the Drugs and Cosmetics Act. a company can apply for approval to market a patented drug four years after its launch. the courts have made it clear. Earlier.

Quia Timet Injunction  Novartis filed a quia timet suit against Ranbaxy for it‟s patented antidiabetic drug “Galvus”.  The standard of proof for quia timet injunctions and what constitutes genuine threat for infringement is still ambiguous in India.  What is “Quia Timet Injunction”:  An injunction to restrain wrongful acts which are imminent but have not yet commenced . .

 Delhi HC‟s current decision:  Delhi court has granted the injunction observing that applying for patent revocation is indicative of imminent intent to launch of generic version. Ranbaxy‟s move:  Applied for revocation of Novartis patent in Intellectual Property appellate board (IPAB).  Contradiction:  Applying for patent revocation may also be construed as an act of good faith by the generic company. to have the validity of the patent adjudicated before launching the generic version. .  Novartis‟ counter move:  One of Ranbaxy‟s manager‟s quote “vildagliptin is at the developmental stage and is being actively pursued for development”.

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