The Patent Black Label

Apr 30, 2013


William Looney
LAST MONTH'S DECISION BY INDIA'S SUPREME COURT TO DENY A PATENT for the top-selling oncologic drug Glivec took nearly a decade of litigation to resolve—but the implications in and beyond India are both immediate and lasting. Here's a list of four that Pharm Exec thinks are most important:

Patenting is a political act. Technical details of patent law aside, the Glivec ruling highlights the most contested issue in medicine today: what constitutes true innovation in an age where scientific advances are transforming the very definition of a drug? This is a question that extends far beyond patent law into basic value judgments like how society should spend limited resources on medical technologies, in a way that balances patient access with the economic incentives needed to seed their development in the first place. The external demand for value—the pressure to prove it beyond doubt—is driving every aspect of the pharma supply chain today. Seeking to raise the bar around the basic patenting criteria of novelty, non-obviousness and an innovative step, as the Glivec decision just did, is but one expression of this broader challenge facing the industry.

India has made a choice—on industrial policy grounds. What is interesting about the 112-page court judgment is not the cursory review of whether Glivec's chemical reactant composition delivered an "enhancement of known efficacy"—a requirement for recognition as a patentable innovation—but the emphasis it places on broader issues of policy and economics. The ruling quotes approvingly from the academic literature that "rules and regulations of the patent system are not governed by civil or common law but by the interest of the national economy." A third of the text traces the rise of the domestic drug industry, noting that "development of the bulk drugs sector is the most important achievement of the pharmaceutical industry in India," an outcome made possible by the absence of full patent protection for pharmaceuticals prior to the country's accession to the World Trade Organization (WTO) TRIPS agreement. It bears noting that many decades ago some industrialized countries pursued precisely this line of argument about patents—until they became themselves major sources of innovation. But this may simply beg the question in today's environment, where knowledge assets are instantly transferable across geographies.

No alms for the poor. Nothing in the court ruling suggests that the plight of those without access to essential medicines will improve. The decision simply maintains the status quo for Indian generic producers, most of who manufacture primarily for export—because the money is better abroad than at home. As the world's largest exporter of bulk drugs, Indian producers bear some responsibility for a recent World Health Organization (WHO) survey that found prices for even the lowest-priced generic products sold through the private sector were at least nine to as much as 29 times higher than the agreed international organization reference price, in most WHO regions. Even in the public sector, provision of essential generic medicines covers only about 42 percent of the potential target population in developing countries. Access to medicines is complex—it is a cliché that bears truth. Generic production, particularly for profit, will not by itself deliver what the court ruling claims is the commitment underlying India's patent law to "provide drug access to the rest of the world."

Industry strategy needs a re-think. The Glivec case suggests there is not much heft left to Big Pharma's reliance on insider lobbying and technical expertise to defeat the anti-patent access lobby and governments who apply IP as a discriminatory trade barrier. The case has shredded much of what was left of the industry's multilateral IP agenda, a decline that started with CEO acquiescence to the November 2001 WTO Doha Ministerial Declaration on TRIPS and Public Health. The Declaration, whose principles are embedded in the 2005 Indian patent law, limited the scope of drug patents where public health considerations intervene—a gap wider than a Mack truck—and thus had the effect of inhibiting enforcement of relevant TRIPS provisions. Recovery must start with a better message. If what the industry describes as India's patent "theft" can be justified by activists as providing more access to the poor, then most observers will say it is a vice that is easy to live with—especially when the top six Big Pharma patent holders are currently sitting on an idle cash pile of nearly $70 billion.

William Looney Editor-in-Chief
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