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India’s newly amended patent rules threaten affordable medicines in the Global South

Peoples Dispatch | 5 April 2024

India’s newly amended patent rules threaten affordable medicines in the Global South

by Jyotsna Singh

India notified amendments to its patent rules on March 15 this year. Despite opposition by patient groups, activists, civil society and academics, the government has brought in changes that will significantly impact India’s ability to produce generic drugs and maintain access to affordable medicines. This will impact not only India, but also other countries which obtain cheaper medicines from India.

It is no coincidence that just five days before the amendments were announced, India signed a Free Trade Agreement (FTA) with the European Free Trade Association (EFTA) that comprises Norway, Iceland, Liechtenstein and Switzerland. Switzerland is home to big pharma companies like Novartis, Roche and Bayer and successfully pressured India to accept TRIPS plus measures in the agreement.

These measures are stricter than the minimum standards set by the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS Agreement). They effectively create additional barriers to generic drug production, potentially leading to higher medicine prices in India and abroad. Now that India has amended patent rules mirroring similar provisions, harmful intellectual property barriers have become a cause of deep concern.

Attack on pre-grant oppositions

Pre-grant oppositions are an important mechanism to avoid issuance of bogus patents. The current legal system in India allows any Indian citizen, and even of other nationalities, to file opposition to a patent even before it is granted. In a landmark judgement last year, the Indian patent office (IPO) rejected secondary patent application of pharma company Johnson and Johnson (J&J) on an important anti-tuberculosis (TB) drug.

The IPO passed the judgement on a pre-grant patent opposition by two TB survivors – Nandita Venkatesan from India and Phumeza Tisile from South Africa. The applicants proved that the secondary patent on Bedaquiline was frivolous and should not be granted. The court decision from March 2023 allowed Indian generics to start producing the medicine from July 2023. Had the patent been granted, it would have extended J&J’s monopoly over Bedaquiline, enjoyed since 2012, until December 2027.

In other cases too, big pharma companies have seen defeat in the face of pre-grant oppositions by patients, CSOs and others. Just in March this year, US pharma company Gilead Sciences Incorporation’s combination drug for Hepatitis C, Sofosbuvir and Velpatasvir, was rejected by the IPO. The pre-grant opposition was filed by the patient group Delhi Network of Positive People (DNP+) and not-for-profit organization Low Cost Standard Therapeutics.

In other instances, the companies have faced pressure to withdraw patent applications before being granted. For example, the French pharma company, Sanofi, had to withdraw its application for 3HP, a TB preventive treatment, in 2022. The pre-grant opposition had been filed by (DNP+) and Ganesh Acharya, an Indian activist and TB survivor.

Undoubtedly, pre-grant oppositions are an eyesore for the big pharma and the governments of the Global North who work as their extension during bilateral and multilateral negotiations. India-EFTA FTA incorporated changes to weaken this provision, which are reflected in the amended patent rules too.

The new rules grant arbitrary power to patent controllers of the IPO to directly reject any opposition. This means that the petitions could be rejected even without listening to the petitioner’s side. Not only would this facilitate the granting of patents on known medicines with minor alterations, but it is also against the very spirit of law which mandates a fair hearing for both sides before reaching a decision.

The rules have also been changed to include fees to be paid for filing pre-grant representations, a clause that didn’t exist earlier. This is a potential hindrance in filing opposition by people and groups who work with minimum resources.

Fighting Big Pharma legally is an uphill task. The industry usually sends an army of well-paid lawyers in courts as an intimidating tactic to public interest lawyers and patients. The companies and their associations spend huge amounts of money in lobbying and exerting efforts to construct a narrative which is favorable to them.

In comparison, their opponents – patients, patient groups, CSOs, public interest lawyers or generic companies – have low or no resources to spend. The government should stand with these people and support their efforts to reduce the prices of essential medicines. However, the patent rules, as they stand today, blatantly contravene this fundamental principle.

Assault on compulsory licensing

If you miss the bus on pre-grant opposition, the next best option is to file for revoking of the patent. India has been hailed globally for granting a compulsory license for the anti-cancer drug sorafenib tosylate, sold as Nexavar. The patent for the drug, used to treat kidney and liver cancers, was held by German multinational Bayer Corporation. An Indian generic company, Natco Pharma Limited, went to the court asking for the right to manufacture and sell the drug in India. It did not challenge Bayer on grounds of innovation, rather it questioned the availability and affordability of the drug.

While filing for compulsory licensing in court, Natco relied heavily on Form 27 of the Indian Patents Act (IPA) which makes it binding on the patent-holder to furnish relevant information such as revenue earned and whether the medicine has been imported or manufactured in India. The information helps in determining whether patients who need the drug are able to access it. In other words, it tells us whether the patent is working in India or not. This fulfills one of the basic tenets of granting patent on innovations: verifying if the patentee is ensuring that the patented product meets public needs reasonably, and thereby fulfilling their part of the social obligation for which the state has granted them a twenty-year monopoly.

In Nexavar’s case it was found that Bayer’s patent was not working. The drug was priced exorbitantly at INR 2.8 (about USD 3350) per month and was hardly reaching 2% of the patients. The court noted this and granted a compulsory licence to Natco, which then sold the drug as Sorafenat at INR 8,800 (about USD 105) a month.

The new patent rules have considerably diluted Form 27. Instead of furnishing the information annually, the patentee will have to submit it once in three years. The requirement of giving information on revenue earned, which was present in the older form, has been completely eliminated. So is the information on whether the medicine is imported. The patentee has to just tick a box indicating whether the patent has worked in India.

If the information is not furnished annually, it will lead to a delay in filing for the compulsory licenses. And, in lack of adequate information, building a strong case will take much more effort. Expecting patients and other groups to collect such information is unfair.

Many public health lawyers and policy experts believe that the new rules contradict the Act itself. The government did not want to discuss this crucial matter in Parliament and chose the backdoor by changing the rules directly. But, according to some opinions, they have a very flimsy legal basis for this and could be challenged in court.

Future worries

While these provisions have already been amended, the FTA asks for more from India, and there is a growing concern that the rules might be diluted even further. In February, the Indian government had publicly announced that the data exclusivity (DE) clause, which would grant extended monopolies to pharmaceutical companies, was off the table. However, the final agreement’s text mentions that while DE is on hold right now, it will be discussed one year after the agreement enters into force. Thus, the sword of DE will continue to hang over India.

These TRIPS plus provisions could lead to substantial price hikes for essential medicines in India, jeopardizing the country’s role as a major supplier of affordable generic drugs to developing countries. The Indian government should reverse amendments to patent rules, renegotiate India-EFTA FTA and prevent similar inclusions in future trade agreements.

 source: Peoples Dispatch