PATENTING PHARMACEUTICAL PRODUCTS: ISSUES AND CHALLENGES

Author: Akshara KV, 4th Year Law Student, SDM Law College, Mangalore

INTRODUCTION

Patents are the legal protection for the inventors and organizers. It can include medicines developed by research based pharmaceutical companies. To encourage research and development of life-saving medications, patent protections were built.

In pharmaceutical industries, patents play an important role in intellectual property rights. Patents are granted in India under the patents act, 1970.[1]

IMPORTANCE OF PATENTING PHARMACEUTICAL PRODUCTS

Patents are granted in India under the patents act, 1970. While inventing a drug, patent is a main element for the success of the drug inventor. In the modern years, many new kinds of drugs are introduced. Over the past years, the pharmaceutical sector has been developed a lot. And it had introduced excessive drugs and saved the life of millions and millions. Most of the profits from these successful drugs are invested in research and development (R&D) and started inventing new drugs. Innovations of pharmaceutical products make a highly effective impact on the bottom line of the manufactures. Pharmaceutical industries mainly concentrate on research and development to save the life of the people and to gain the total output that a business has.[2]

In India, the pharmaceutical sector is developing more and more. The main reason for the progress of this pharmaceutical sector is the patent system in India. Pharmaceutical companies create and research various kinds of drugs to cure the disease. To protect the company’s assets patent plays a major role in several ways.

Patents are important for Indian pharmaceutical companies. Because, patents are necessary to promote restructuring and economic growth. They help in gaining competitive edge in the market and increase income and market share. Quality is an important factor in the pharmaceutical industry. Because, it is very essential to possess purity and safety measures. 

 In the pharmaceutical industry, patents play a major role in intellectual property rights. Intellectual property is a property which does not have a physical presence. And it is created by the struggle of human’s brain.

Intellectual property rights are derived due to the creation of intellectual property. These rights are granted to the inventor or creator of the property. Intellectual property is protected by the intellectual property rights only if it is a solid or substantial property. To use the intellectual property, a person needs to take permission from the inventor.

There are several forms of intellectual property rights and patent is one of the important rights. As mentioned above, there are so many types of intellectual property rights. They are as follows:-

  • Trademark
  • Industrial design
  • Geographical indication
  • Copyright
  • Patent

India has made a massive change in the patent system. Patent helps for the economic growth of Indian pharmaceutical companies as they help them to construct their research. Patents help the pharma companies not to make possible for the other competitors to make, use or sell their drugs and designs to others. Patents make it a very flexible system.

Patents has some limits:-

  • Patents need to be renewed after 20years.
  • It is only given to some inventors or any organizers.

Therefore, the patent system can be considered as the backbone of Indian pharmaceutical sector.[3]

TYPES OF PHARMACEUTICAL PATENTS

The pharmaceutical industry is one of the most enormous sectors and its research is unpredictable in nature. After the research, the outcome must be a useful product. This is a very highly competitive market. To get patent rights, there should be a new product or a process. So that pharmaceutical companies protect their inventions from any other commercial companies.

Pharmaceutical patents in India can be classified under the following categories. They are:-

  • Drug compound patents
  • Formulation /composition patents
  • Synergistic combination patents
  • Technology patents etc.[4]

INDIA’S EXISTING PATENT LAWS

The patent law was introduced in India from 1911. Indian patents and Designs Act was passed in the year 1970 and it came into force during the year 1972 and was again reformed in 2005. The Act was enlarged all over the fields of technology like chemicals, drugs etc and a compulsory license was introduced. In India, patent application can be filed either individually or jointly by the inventor or his assignee.[5]

 TRIPS AGREEMENT

The Trade-Related Aspects of Intellectual Property Rights agreement came into force on 1st January, 1995. TRIPS agreement is also known as trade-related aspects of intellectual property rights. It is an international legal agreement between the members of the WTO. TRIPS agreements gave more protection to intellectual property. All the members are free to determine the method of executing the provisions of the agreement with their own legal system. TRIPS is an integral part of the agreement which establishes the WTO. It also includes other areas of intellectual property rights. Among those patents is the important one. It lays down the procedures and remedies. So that right holders can implement their rights productively.

Patent should be available for all the inventions. No matter whether it is a product or a process. In all the fields of technology without discrimination it must be available.[6]

CASE LAWS ON PATENTING PHARMACEUTICALS

There are so many case laws regarding patenting pharmaceutical products. Few of the cases are mentioned below:-

  • Novartis Ag v. Union of India and others[7]
  • Bayer Corporation v. Union of India and others[8]
  • NATCO Pharma Ltd v. Bayer Healthcare LIC [9]
  • Novartis Ag v. Union of India and others

The above said case is a landmark case which was delivered by a divisional bench of the Supreme Court of India. This case was based on the issue, whether Novartis could patent Gleevec in India or not. Novartis fought for almost seven long years for the climax to get a legal action.

In this case the petitioner was not allowed to patent drugs for lack of invention and the petition was dismissed by the Supreme Court of India. It was held that the Beta Crystalline is a new form of Imatinib Mesylate where the effectiveness was well known. The Supreme Court made it clear that in the case of medicine, effectiveness or productivity of the drug means therapeutic efficacy and all the materials of drugs are not relevant. However, in the instant case, Novartis had not provided any documents that showed the effectiveness of Beta crystalline as compared to the effectiveness of Imatinib Mesylate.  [10]

  • Bayer Corporation v. Union of India and Others

This was a writ petition filed by Bayer Corporation to restrain the Drug Controller General of India from granting license to Cipla Ltd. to manufacture, sell and distribute its drug prescribed for the treatment of advanced renal cell carcinoma. The second respondent in the case was the DCGI and the third respondent was Cipla. The court rejected the plea of appellants and further held that market approval of drugs does not amount to violation of patents.[11]

  • NATCO Pharma Ltd v. Bayer Healthcare LIC 

Bayer’s Anti-Cancer Drug called Nexavar was not a manufacturing product in India and it was marketed with heavy payment in which common people cannot afford it. Taking these reasons into consideration NATCO pharma had filed a case against Bayer. NATCO pharma had won the case which resulted in gaining a compulsory license on the drug which has a scope of saving many lives of cancer patients.[12] 

ISSUES OF PHARMACEUTICAL INDUSTRY

There are 2 main important issues which are faced by the pharmaceutical industry. They are drug selection and reimbursement. Initially pharmaceutical manufacturers marketed their products to physicians as they played a major role in selection and prescribing drugs to the patients. Recently, there have been many changes taking place where other licensed practitioners are coming into the role. Changes happening in the pharmaceutical field had led the manufactures to reassess their marketing strategies. This has brought clinical pharmacists into the role of selection and prescription of drugs.

Firstly, as the health care costs are rising seriously, health care organizations and finances are looking to shorten drug budgets.

Secondly, thousands of clinical pharmacists are being passed out from schools of pharmacy and are brought into the role of drug consultants throughout the healthcare industries.

Thirdly, pharmacology components of medical education have either stagnated or declined during the past 10-15 years. Need for drug information has increased and there are not enough clinical pharmacologists for dealing with the patient’s needs.

Then due to these changes, clinical pharmacists are taking up the role of selection and prescribing drugs. New challenges is that the cost of drugs is compared to the cost of service that is provided to the patient. Therefore, an efficient and framed clinical pharmacist can play an important role in cost effectiveness evaluation of drug therapy.[13]

CHALLENGES OF PHARMACEUTICAL INDUSTRY

In recent years, the pharmaceutical industry has experienced a large number of patent challenges.  

  • Lack of capabilities in the innovation space

At present our country lacks capabilities in innovation and to grow India’s innovation, the government needs to take more initiative in research. Clinical trials must be motivated and in certain decision making subjectivity must be removed.

  • External markets

India is highly dependent on foreign countries for the raw materials which are used to make medicines. And there is uncertain price fluctuation in the country. Executing more infra-structure would help to raise the internal facilities to stabilize supply. Because the country is facing supply interruptions.

  • Indian pharmaceutical companies are facing low profit as compared to foreign countries. Indian pharma industry earns very low prices. Their income is not enough to invest in the research element.
  • Raw materials imported from other countries to India need to be tested in a laboratory to check their quality.
  • To become entrepreneurs and to promote the incubator’s, the government and industry should provide a pharmacist community.[14]

COMPULSORY LICENSE OF PATENTS IN INDIA 

Compulsory license can be defined as, without the permission of the patent owner a third party can sell or use the patented invention. There is only one compulsory license in India. It was given in 2012 to Natco, for Bayer’s cancer drug Nexavar.

Compulsory licenses come under the Indian Patent Act, 1970 which is specified under chapter XVI. In order to grant a compulsory license there are some conditions to be fulfilled. And all those conditions come under section 84 – 92 of the Indian Patent Act, 1970.[15] It gives more opportunity to voluntarily licensing negotiation between the domestic Indian pharmaceutical companies and multinational corporations to succeed.

CONCLUSION

One of the main purposes of patents is to motivate the inventors. All the pharmaceutical companies need protection for their products. So that they need to acquire a patent. Therefore, patents can be considered as a fundamental object in the pharmaceutical industry. India should stop depending upon the foreign countries for the raw materials to make the medicines. If pharma companies produce the raw materials from our own country, then lack of money can be reduced and the companies can gain some profits. A compulsory license provides an opportunity to market the patented products under certain conditions. 


[1]  Mathur, V, ‘Patenting of pharmaceuticals: An Indian perspective’,  Int J Drug Dev Res, 4(3), 27–34 (2012).

[2] Zacharias, N., & Farias S., ‘Patents and the Indian pharmaceutical industry’, Business Briefing–Pharmatech (2002).

[3] Athulya, Why are patents important for pharmaceuticals?, VAKILSEARCH (May. 6, 2020), https://vakilserach.com/advice/why-are-patents-important-for-pharmaceutical/.

[4] supra note 1.

[5] Dalmia, V. P., ‘Patent Laws in India’, MONDAQ(Dec. 18, 2017), https://www.mondaq.com/india/patent/656402/patents-law-in-india–everything-you-must-know.

[6]A more detailed overview of the trips agreement, WORLD TRADE ORGANISATION, https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm.

[7] Novartis Ag v. Union of India and others, (2013) 6 SCC 1 (India).

[8] Bayer Corporation v. Union of India and others, 162 (2009) DLT 371(India). 

[9]NATCO Pharma Limited v. Bayer Healthcare LIC., FAO (OS) (COMM) 158/2019and CM APPL.30589/2019 (stay) (India).  

[10] A Study on: Novartis Ag v. Union of India, KHURANA AND KHURANA ADVOCATES AND IPATTORNEYS (July.15,2019), https://www.khuranaandkhurana.com/2019/07/15/a-study-on-novartiag-v-union-of-india/.

[11] Bayer corp versus union of India, LAWTEACHER(Aug. 6, 2019), https://www.lawteacher.net/free-law-essays/constitutional-law/bayer-corp-versus-union-of-india-constitutional-law-esaay.php. 

[12] Harsha M.D, NATCO v. Bayer (Compulsory license), FANCIFUL .BLOGSPOT (Aug. 23, 2012), fancifuip.blogspot.com/2012/08/natco-vs-bayer-compulsory-license.html?m=1.

[13] M.A. Riddiough, Major issues facing the pharmaceutical industry and their relationship to clinical pharmacy, DRUG INTELL CLIN PHARM (Jan.18, 1984), https://pubmed.ncbi.nlm.nih.gov/6692740.

[14] Sanjiv Das, Challenges and opportunities for Indian pharma industry, EXPRESSPHARMA.IN,(Dec.18,2018), https://www.google.com/amp/s/www.expresspharma.in/amp/latest-updates/challenges-and-opportunities-for-indian-pharma-industry/407864/.

[15] Nayanika Shukla, India: Compulsory Licensing in India, KHURANA AND KHURANA ADVOCATES AND IP ATTORNEYS,(Jan,18,2019), https://www.mondaq.com/india/patent/772644/compulsory-licensing-in-india.

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