Protect lives, and law

Indian law allows pre and post-grant challenge to a patent. It also says if a patented drug was produced and marketed before 2005, a generic manufacturer can reverse engineer the product after paying “reasonable” royalty to the patent-holder. There’s also a compulsory licence provision that allows the patent-holder’s exclusive right to be challenged three years after the patent date. The provisions under which this clause can be invoked include public availability at reasonable price. The three-year wait can be suspended in case of a public health emergency.

Now consider the Roche vs Cipla case. Roche was granted marketing rights for its anti-cancer drug, Tarceva, in July 2005. That means Cipla couldn’t use the pre-2005 exception to sell a generic version. The Tarceva patent was granted in July 2007. Cipla didn’t challenge the patent pre or post-grant with the patent authority. Pre and post-grant challenges are common. Indian pharma companies like Ranbaxy, Ajanta Pharma and Torrent have challenged patents granted to MNCs like Eli Lilly, Pfizer and

AstraZeneca. Wockhardt has issued a post-grant challenge to Roche’s hepatitis C drug, Pegasys.

All this is unexceptionable.

But Cipla has manufactured a generic version of a newly patented drug, therefore invited litigation and only then challenged the validity of the patent. So it has questioned a patent by violating it. And since it is already marketing its anti-cancer generic drug, the question about Roche’s patent has now got linked with market price in popular discourse. Prices of lifesaving drugs are not a non-issue. But it has to be understood that the validity of Roche’s Tarceva patent is a matter of chemistry, not economics.

Let us clarify here that we have no position on whether Roche’s Tarceva patent is scientifically valid or not; the court will decide that. What we have argued against is the manner the patent was challenged.

If Cipla succeeds, this will become an attractive option for generic manufacturers — produce a cheap copycat version and when sued, bet on price differentials complicating the issue. This strategy doesn’t seem to set much store by India’s patent law. But the patent law, let us remind ourselves, is a law.

A quick look at the chemistry of Roche’s patent. It is being questioned on the ground that the key element, Erlotinib, is a derivative of Gefatinib, an earlier anti-cancer formulation, and that Erlotinib doesn’t demonstrate “increased efficacy”. This concerns Section 3(d) of the patent law that says new forms of an existing substance or new use of a known compound cannot be patented. This is controversial. Novartis challenged this provision while fighting for its anti-cancer drug, Glivec, but didn’t get a favourable verdict from the Chennai high court. The patent appellate authority is now hearing Novartis’s argument. We have argued in these pages (‘Why be a pill pauper?’, February 21, 2007) that Section 3(d) is too restrictive in terms of defining patents. That incremental innovation defines much of genuine, patentable progress in medical research. But Section 3(d) is not being challenged in Roche versus Cipla. The issue here is whether Erlotinib passes the 3(d) test.

However, 3(d) can block future Indian pharma product patents. Given the high research costs in investing in new chemical entities (new drugs), smarter Indian pharma companies are better off developing and seeking patents for new medical entities (demonstrable improvements of existing formulations). Section 3(d) can really complicate this strategy. And it is wrong to say this doesn’t matter for the paying public. Indian pharma companies that can claim patents by incrementally innovating MNC formulations will sell their drugs cheap. But these will be cheap, properly patented drugs — not cheap, patent law busting ones. Anyone who takes public policy seriously should see the difference.

They should also see that the question of affordable access to drugs is a matter of public policy, not patents per se. India spends 1 per cent of its GDP on public health — that’s a scandal bigger than anything an MNC can cook up. And of every rupee spent on public hospitals, only 15 paise are spent on buying drugs that are given free to patients. Surely this calls for furious activist action?

Of course, lifesaving drugs like Tarceva, priced as they are, will pose questions even in a vastly better public health system. There are sensible ways to tackle this.

First, there are provisions in the Indian patent law on local manufacturing. Typically, local manufacturing will bring down prices. These provisions however can’t be applied immediately after a patent is granted.

Second, suppose the price of a patented lifesaving drug is “too high”. Drug price control authorities can impose controls only on essential drugs — those most commonly used and for common ailments. But competition authorities can investigate the pharma company’s pricing structure. The WTO’s intellectual property rules explicitly allow for this. And under domestic law, competition authorities have suo motu powers to investigate pricing in any sector.

India’s MRTPC is being replaced by the Competition Commission. MRTPC isn’t exactly a model of intelligent, vigorous action. A lot of hope is pinned on the new commission. If a pharma MNC is “gouging” consumers, the fact that it has a patent won’t save it from competition authority’s scrutiny.

Third, health insurance can and should be tagged to drug prices. The government should brainstorm on this as much as private insurers. Indeed, given the trend that the cost of effective health service is going up, even for lower income groups, there’s a broader agenda here.

True, none of this sounds as dramatic as violating the patent law and manufacturing copycats. But let’s remember that if this becomes the model, India will face unanswerable questions, internally and globally. Plus, there’s the general principle, which should be obvious but isn’t: if patent busting becomes the norm, innovation will be discouraged, and without new innovative drugs, there will be nothing to copy from.

That doesn’t help the patient.

saubhik.chakrabarti@expressindia.com