Express Pharma

Techniques to enhance IP valuations

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Dr Gopakumar G Nair, CEO, Gopakumar Nair Associates, gives an insight on why IP systems must support innovations by creating a conducive environment to attract investments, and must reward inventions with IP protection in return for disclosures

Dr Gopakumar G Nair
Dr Gopakumar G Nair

‘Jallikattu’ controversy can wait, IPR appears to be the new arena for the “bulls and bears.” Intellectual property right (IPR) has come a long way since Paris Convention and other early treaties and conventions. The fundamental ratio, unanimously accepted, has always been a fine balance of rights (to inventors) and obligations (to users and the state). In recent years, post 1980s in particular, there has been intensive efforts and initiatives to exploit IPR to the hilt in favour of inventors (or assignees) often to the detriment of users.

Uruguay Round was conceived by the developed nations as an extension of this bull run, to use IPR as a trade barrier to rein in the trade growth potential of the third world countries. The transformation of General Agreement on Tariffs and Trade (GATT) to World Trade Organisation (WTO) and incorporation of Paris Convention in trade-related aspects of IPRs, linking to WTO, was considered a smart move to control global trade. However, the emergence of BRICS and resurgence of Asia and Africa post WTO has cautioned the developed nations that mastering of IPs and working around IPRs are within the technological feasibility and reach of developing countries, such as India.

Intensive initiatives and techniques to enhance IP valuations and prolong the life of patents has been on the increase in last few decades, such as ever greening. Even though, exceptions/exemptions for healthcare and nutrition, encompassing pharma industry, generic alternatives for affordable access were incorporated in TRIPs Articles 7 and 8, these measures had not received adequate attention, till Doha Declaration of 2001. However, the Doha declaration itself was side-lined as not statutory till recently when in 2016, the Article-31bis has been introduced by WTO through an amendment of TRIPs. It is still considered too little, too late and too cumbersome to address affordable access to life saving medicines in third world countries. The first and only amendment of TRIPs (affordable access) was notified on December 6, 2005, and is available on https://www.wto.org/english/tratop_e/trips_e/wtl641_e.htm.

In the meantime, grant of a Compulsory Licence (CL) in India to Nexavar (Sorafenib), an anticancer drug for treatment of advanced renal cell carcinoma, generated a lot of heat and dust globally. The controversy gripped both groups for and against, so much so the CEO of Bayer (the innovator) stated in 2014 (post the grant of CL by India in 2012) that Nexavar was developed for “western patients who could afford it” and not for poor patients in India and other under developed countries.

This leads us to the cause and cost of innovation and drug discovery. Over the years, with increasing pharmacovigilance and Adverse Drug Resistance(ADR), the FDA has been raising the bar for approval of new drugs. Newly elected US President, Donald Trump has promised to bring down the drug approval costs and ease the norms in return for voluntary price reduction by US-based big pharmas. However, none of these are likely to happen. US FDA is not likely to drop or dilute safety-efficacy-ADR norms. Big pharma is not likely to voluntarily and drastically reduce costs.While admitting and advocating for adequate financial motivation through attractive returns for drug discovery research, it is essential to explore ways and means to strike an equitable balance. It can be done by evolving a voluntary parallel pricing mechanism for the poor patients of third world countries. Concerns of cross-border osmotic sales work against such options. By strategically evolving trade norms, parallel pricing models for patented essential medicines can be designed.

Medicines Patent Pool (MPP), backed public health initiative fully funded by UN had come up with an excellent model for addressing this vexatious affordable access concern. While MPP is currently reported to be managing over 100 HIV pharma projects globally, the MPP licensing is being extended to anti TB drugs and hepatitis C treatment. The recent voluntary licensing initiative in India by Gilead had used the MPP vehicle, initially for ART drug combinations and more recently for Sofosbuvir and others for hepatitis C treatment. Non-exclusive licence of Sofosbuvir (Sovaldi) by Gilead, to 11 Indian companies, is a welcome model.

Drug discovery and healthcare-based innovations are essential and need strong support and appreciation at all the levels. IP systems must support innovations by creating conducive environment to attract investments, to reward inventions with IP protection in return for disclosures. At the same time, taking the benefits of such breakthrough innovations to the needy patients is equally important.

Currently, the trend in patent protections are through excessive monopolies, exclusive global licensing and prohibitive uniform pricing, insensitive to the diversity and variance in patent populations spread across the globe and their purchasing power parity and economic status of communities.

India has been following its own model over the years. Being a leader in generic medicines, a large number of developing countries and least developed countries (LDCs) have been looking up to India to provide healthcare support and affordable access to life saving essential medicines in their countries. India, from the outset, during negotiations on the Dunkel Draft Treaty as well as in implementing the TRIPs flexibilities through WTO-TRIPs compliant amendments to the (Indian) Patents Act, 1970, cleverly and compliantly incorporated all the available TRIPs flexibilities into the thrice amended Patents Act, 1970.

While Compulsory Licence (CL) is a globally accepted terminology which finds a place in almost all Patent Acts/ Statutes/ Code of Nations, practicing of CL in the pharma/biotech healthcare fields have been receiving strong and aggressive counter-reactions from big pharma and developed nations. Even though India had granted only one CL, India continues to be ranked lowest but one in the Global IP rankings by GIPC (This leaves a bad taste and poor impression not on India but on GIPC). Such bias and preconceived reverse-engineered approach towards India is also reflected in the Super 301 Report from US, year after year.

All this, in spite of the fact that between 2010 and 2016, India has created a world record (may be eligible for Guinness) in grant of ex parte / ad interim injunctions in patent infringement suits. Indian courts, especially Delhi High Court, has been liberally granting ex parte injunctions till 2016, just for the asking. In spite of the research exemption in Sec.107(A)(a), till recently no defendant was successful in preventing grant of injunction, simply because a Drug Approval Application has been filed with Drugs Controller General of India (DCGI)/CDSCO (Central Drugs Standard Control Organisation). The prima facie validity of the patent or a prima facie verification of infringement of the product or process is ignored or done away with while granting injunctions in patent infringement suits, exceptionally in India. A patent on tablet with multiple layer coating and at least 40 per cent of the solvent in the core (an impossibility) succeeded repeatedly against uncoated multi-layer tablets in the market place to obtain injunction and infringement status. A very narrow composition of iron complex infusion is being enforced against every generic dosage form of iron complex infections in the market place in a country where anaemia or iron deficiency especially among women and children is identified as the biggest healthcare concern. Currently, patent enforcement is at a record high in India, even compared to US and Europe. In spite of all this, India is at the bottom of the IPR ladder, what a contradiction. On the contrary, the scenario differs in trade marks. The current proposal from the Health Ministry to market generic medicines through Jan Aushadhi Stores and to bring new labelling and prescribing norms to emphasise generic names, substantially erodes the brand concepts for medicines and is irrevocably diluting value of trade marks and brands. To add insult to injury, leading globally recognised Indian brands like Cipla have been facing brand erosion and trade mark dilution. In a recent case, Cipla failed in invalidation against a copycat Cipla Engineering, while Cipla is a globally well-known mark. In conclusion, India had started well to enjoy full TRIPs flexibilities post WTO/TRIPs since 1995. However, over the years, partly due to legal indoctrination and partly due to built-up fear of Super 301 and other threats, India has been going overboard in patent enforcement through liberal ex parte injunctions. While India has been very worried about TPP, it is heartening to note that the Trump Administration has resolved the concern by burying the TPP. India has also been adversely affected by the data integrity issues, which of course, is not related to the data exclusivity conundrum and allegations of big pharma. India need to seek more liberal voluntary licensing of essential medicines on non-exclusive basis. If licensing is the order of the day in copyrights, trademarks and other forms of IP, why not in pharma patents?

Why not consider pharma patents in third world countries as Standard Essential Patents (SEPs) for healthcare and affordable access to life saving medicines for poor patients in developing countries and LDCs? Of course on fair, reasonable, and non-discriminatory terms (FRAND) terms of adequate remuneration and equitable royalty to the innovator.

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