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Tapan Ray

INDIAN PATENT ACT 2005 - An Overview. Tapan Ray. Indian School of Business, Hyderabad March 2, 2009. Organisation of Pharmaceutical Producers of India (OPPI). Founded in 1965 Over 75 Members Research-based International & large Indian Pharma Companies

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Tapan Ray

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  1. INDIAN PATENT ACT 2005 - An Overview Tapan Ray Indian School of Business, Hyderabad March 2, 2009

  2. Organisation of Pharmaceutical Producers of India (OPPI) • Founded in 1965 • Over 75 Members • Research-based International & large Indian Pharma • Companies • Affiliated to International Federation of Pharmaceutical • Manufacturers & Associations (IFPMA), Geneva, Switzerland • and World Self-Medication Industry (WSMI), France • 3 Fundamental Beliefs • - Adherence to TRIPs Compliant IPR • - Ethical Sales Promotion based on IFPMA Guidelines • and OPPI Code of Conduct • - Adherence to International GMP & Quality Standards

  3. Content • Healthcare Policy – An Overview • IPR Scenario in India & Indian Patent Act 2005 – Key Concerns • Definition of Patentability • Data Protection • Scope of Compulsory Licensing • Pre-Grant Opposition • Enforcement of Patent Act • Patented Products Pricing • IP Index

  4. Policy Framework Supporting Pharmaceutical Industry Policy-sets that influence the Pharmaceutical Industry Healthcare Policy Industrial Policy Health Safety Policy • Access to medicines • Cost-effective medication • Regulating the physician • and consumer behaviour • Generic promotion/ • substitution • Promoting SMEs • Strengthening R&D • Protection of IPR • Sustaining Industry- • Institution Linkages • Supporting technology • transfer and capacity • development • Ensuring Quality in • manufacturing • Efficacious treatments • Innovations in drug • delivery • Safety in medicines Source: EXIM Research

  5. Regulatory Authorities in India • National Pharmaceutical Pricing Authority (NPPA) • Department of Pharmaceuticals • Ministry of Health & Family Welfare - Central Drug Standard Control Organization (DCGI) • Ministry of Science & Technology - Department of Biotechnology • Drugs & Cosmetic Act, 1940 - Key Schedules: Schedule D1, D2, H, K, M, Y (2005)

  6. Regulatory Roles • Central Drugs Controller Office • New drug approval • Clinical research • Safety • Port • Import and Export • Central Drug Laboratory • Analytical testing • State Drugs Controller Office • Manufacturing • Inspections

  7. India’s Healthcare Context is Unique India : 80% out of pocket payment and 20% from others

  8. Medicines * 60% towards taxes and trade margins 15% of Total Household Cost for Individuals Source: National Survey of Health, 2003

  9. Sources of Financing Healthcare Services in India Proportion of Health Expenditure by Financing Source Central Government 6% Local Government 2% State Government 13% Firms 5% Households 72% External Aid 2% Source: National Health Accounts – 2001-02, MoHFW, GoI

  10. Access of Medicines to All Proves to be a Challenge • This 350 mn. people are largely clustered around urban centres where health care facilities exist Percentage of WHO regions lacking access to essential medicines Source: Network, November 2004

  11. Access to Innovative Medicines Pharma Industry role is restricted to this sector 150 Mn. – Formal sector 350 Mn. access to medicines 200 Mn. – Largely above Poverty line 650 Mn. (no access to medicines) 300 Mn. Above Poverty line Need of these patients are primarily for essential medicines 350 Mn. Below Poverty line Formal Sector: Those employed with the Public or Private Sector

  12. Ideal IPR Policy for India SCIENCE & TECHNOLOGY AND R&D NATIONAL INTEREST INTELLECTUAL PROPERTY RIGHTS AVAILABILITY & MEDICINE PRICES HEALTHCARE NEEDS

  13. Patent Law in India – A Background • First Indian Patent Law : 1856 • Patent Designs and Protection Act : 1872 • Protection of Inventions Act : 1883 to 1970 • India signed WTO : 1st January 1995 • Indian Patents (Amendment) Act, 2005

  14. Years 0 2 4 6 8 10 12 14 16 New Product Development is Risky, Time-consuming and Expensive Compound Success Rates by Stage Discovery (2–10 Years) 5,000–10,000Screened Preclinical Testing Laboratory and Animal Testing Phase I 20–80 Healthy Volunteers Used to Determine Safety and Dosage 250Enter Preclinical Testing Phase II100–300 Patient Volunteers Used to Look for Efficacy and Side Effects 5Enter Clinical Testing Phase III1,000–5,000 Patient Volunteers Used to Monitor Adverse Reactions to Long-Term Use FDA Review Approval Additional Post-Marketing Testing 1Approved by the FDA Cost to Develop New Biotech Products Is Estimated to Average $1.2 – 1.7 Bn Sources: 1) Increased Length and Complexity of the Research and Development Process. Chapter 1 in: PhRMA Pharmaceutical Industry Profile 2003. 2). Tufts Center for the Study of Drug Development. Impact Report, Vol 8, Num 6, November/December 2006

  15. Life Cycle of a Medicine – Pre-launch Period Basic Research Development Clinical Phase I Product Launch Target Identi-fication Pricing Target Vali- dation Lead Identifi- cation Lead Optimis- ation Clinical Phase II Candidate Medicine Pre- Clinical MA Clinical Phase III ~ 6-12 months 0 years 10 years 20 years Source: Pharmaceutical Sector Inquiry - Issue Nov. 2008 – Page No.51

  16. R&D in India • Currently engaged in medium levels of research: - NDDS - Contract Research - Specialised Generics - Biogenerics - NCEs / NMEs (the ultimate aim)

  17. Research done by Major Indian Companies • Ranbaxy • Dr. Reddy’s • Glenmark • Wockhardt • ZydusCadila • Piramal Healthcare • Lupin • Biocon & others

  18. R&D Status of Indian Companies - NCEs Expected to launch 3 NCEs worth sales around U.S.$ 500 Mn. by 2015

  19. Indian Industry – R&D Spend R & D Spend: How Top Sectors Fare Source: Capitaline Plus Pharma Spends More Than All Industries Put Together

  20. R&D Funding Structure • Developed countries : 2% of GDP • In India : 0.6% of GDP (stated to be 2% by 2011)

  21. Indian Pharmaceutical Industry R & D Spend - Pharmaceuticals Almost 7 - 8% of 2006 Trade Sales @ Constant $ (1 = INR 40) Source: IDMA

  22. R&D Spend of Pharmaceutical Industry • India : 7 – 8% (U.S.$ 522 Mn.) • Growth : 26% • U.S. : 19% (U.S.$ 52.2 Bn. of total revenue)

  23. Patent Application Status Pharmaceuticals Source: Commerce Ministry, GoI

  24. Indian Patent Law Areas of Concern • Definition of Patentability • Data Protection • Scope of Compulsory Licensing • Pre-Grant Opposition • Enforcement of Patent Act

  25. Patentability • TRIPS Allows NCEs, Polymorphs, Chiral Isomers, New Indications etc. • Section 3(d) of the Patent Act – “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 regards to efficacy.”

  26. Evergreening… A Misconception Date of filing of patent for invention 1 Date of expiry of patent for Invention 1 Date of expiry of patent for improvement Date of filing of patent for improvement Anyone is free to use the patent of invention 1 when the term for that is over. The innovator or anyone else who has patent for the improvement will have rights to his patent only. There is no extension of patent term as per the Indian Patent Act

  27. Pre-Grant Opposition by Representation • Objectives: 1. To ensure genuine pre-grant opposition 2. To eliminate opposition in seriatim The need: 1. Ensure that Innovation is not put to undue disadvantage for delay in Pre-grant proceedings. 2.Need to introduce statutory time limits for setting up hearings by the Controller and disposing off pre-grant matters for ‘Accountability’

  28. Pre-Grant Opposition by Representation • Recommendations: 1. Pre-grant opposition must be filed within 6 months of publication 2. Pre-grant opposition must be disposed within 12 months of commencement of pre-grant proceedings. 3. If not concluded within 12 months, provide equivalent Patent Term Restoration.

  29. The Economic Times May 29, 2008

  30. Regulatory Data Protection TRIPS Article 39.3 • "Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products, which utilizenew chemical entities, the submission of undisclosed information or other data, the origination of which involves aconsiderable 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 thedata is protected against unfair commercial use."

  31. Financial Express November 19, 2007

  32. Mandatory Data Protection is ‘Evergreening’… A Misconception 20 Years Scenario 1 5 Years Date of expiry of patent for Invention 1 and introduction of generics Date of filing of patent for invention 1 Date of mandatory Data Protection Date of expiry of mandatory Data Protection *Anyone is free to use the patent of invention 1 when the patent term expires. There is no extension of patent term with mandatory data protection of the innovator for a specified period.

  33. Mandatory Data Protection is ‘Evergreening’… A Misconception 20 Years Scenario 2 5 Years Date of expiry of patent for Invention 1 and introduction of generics Date of filing of patent for invention 1 Date of mandatory Data Protection for Innovations Date of expiry of mandatory Data Protection for Innovations *Anyone is free to use the patent of invention 1 when the patent term expires with one’s own data. There is no extension of patent term with mandatory Data Protection of the Innovator for a specified period.

  34. Enforcement of Patent • Preserving a climate that supports Innovation is more important than ever.

  35. WTO TRIPS Agreement - Article 28.1(a) • Member countries agree to ensure exclusive rights to patent holders for a limited period of time • “Prevent third parties not having the owner’s consent from the acts of: making, using, offering for sale, [or] selling” the product for the duration of the patent

  36. Mint March 20, 2008

  37. Financial Express March 20, 2008

  38. Business Standard March 20, 2008

  39. Current Status • Last year at least 4 patents were infringed (mailbox applications?) • No one knows when these cases will get resolved • No known strong deterrent for patent infringement • Serious adverse commercial impact on the innovators Is the sanctity of granting patents in India getting lost?

  40. A Definition of Patent Linkage • A regulatory system under which marketing approval of generic drugs is not granted until the expiration of original drug’s patent

  41. Whose Responsibility? • Governments, not Patent Offices, are bound by the WTO TRIPS Agreement • It is the responsibility of all relevant Government Departments/Ministries to ensure that TRIPS obligations on patent protection are met

  42. Communication Process Essential • The process of gaining marketing approval for patented pharmaceutical generally rests with the Ministry of Health of a WTO Member State • For WTO members to meet TRIPS obligations communication between the Patent Office and the Ministry of Health is critical to prevent premature approval of generic copies of patented drugs

  43. Patent Linkage Process • Establishes the communication process between the Health Ministry and the Patent Offices to prevent marketing approval of generic drugs before expiration of patents • Ensures that one Government Department/Ministry does not impair the efforts of another Government Department/Ministry to provide effective intellectual property protection as required by Article 28 of the WTO TRIPS Agreement

  44. What will it do? • Ensures that Health Regulatory Authorities do not unintentionally undermine the ability of the Government to meet WTO TRIPS obligations • Establishes Patent Linkage between Health Regulatory Authorities and Patent Office officials • Helps Health Regulatory Authorities not to approve marketing rights of products under patent or are under patent review or approval process

  45. Patent Linkage in the United States • US FDA maintains a listing of pharmaceutical products known as the Orange Book • The Electronic Orange Book is also available via the internet at: http://www.fda.gov/cder/ob/ • US FDA does not authorize the marketing approval for a generic copy of a pharmaceutical product protected by a patent listed in the Orange Book

  46. Patent Linkage in Europe • Instead of Patent Linkage the period of data exclusivity is for 10/11 years

  47. Patent Linkage Around the World

  48. Patent Linkage Around the World

  49. Patent Linkage Around the World

  50. Necessity of Patent Linkage • Government grants patent and must ensure their protection through regulatory system • Will encourage innovators • Will help Indian Companies to avoid similar problems when they will launch their NCEs as systems will be already put in place • Will help avoid unnecessary enormous litigation cost and time

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