Intellectual property protection in India is an increasing concern for industry following a year of regulatory action and inaction, according to the Pharmaceutical Research and Manufacturers of America.

PhRMA Vice President, International Affairs, Geralyn Ritter characterizes India's IP protection as "inadequate and in some cases deteriorating" in comments submitted recently to the U.S. Trade Representative regarding the annual National Trade Estimate Report on Foreign Trade Barriers.

While PhRMA raises concerns over different market barriers such as India's proposed mandatory price negotiations prior to marketing approval and high import duties, the group reserves most of its comments for what PhRMA see as India's inaction to implement provisions required by the World Trade Organization agreement on Trade-Related Aspects of Intellectual Property Rights.

To obtain marketing approval in India, companies must submit proof that the product was granted marketing approval in another country and data from clinical studies on 100 Indian patients. PhRMA views this as an attempt by India to use other countries "as its agent" by "indirectly rely[ing] on test data submitted by originators to another country," which would be inconsistent with TRIPS.

"TRIPS requires that submitted data should be protected against disclosure as well as against reliance," PhRMA says.

In an interview with PharmAsia News, Oxford Intellectual Property Research Centre's Shamnad Basheer, who is based in New Delhi, said that PhRMA has long argued for data exclusivity under TRIPS, but that the group's argument is problematic because TRIPS does not use the term "exclusivity" but rather stipulates protection from "unfair commercial use."

"Indian government officials have become very sophisticated about IP and TRIPS issues and one cannot fool them anymore. The government appreciates that there is considerable flexibility in [TRIPS]. Therefore, if PhRMA needs to win on this, it needs to convince the government that data exclusivity is good for India and Indian companies and not just for the group of multinational companies that PhRMA represents. In other words, it has to make sense from a 'national' policy point of view," said Basheer.

PhRMA also takes issue with the criteria for patentability under Section 3(d) of India's Patents Act, saying it "creates additional hurdles for pharmaceutical patents" because it excludes "new forms of known substances lacking enhanced efficacy" from its patent coverage.

Section 3(d), which aims to prevent evergreening by restricting patents for minor improvements to formulations, has been the focus of increasing concern from international pharmaceutical companies hoping to make inroads into the Indian market.

Gleevec Dispute Continues

All eyes have been on Novartis in its attempt to secure a patent in India for its oncologic Gleevec (imatinib). The Madras High Court recently dismissed Novartis' petition challenging the constitutionality and TRIPS compatibility of Section 3(d), saying it did not have jurisdiction to rule on the TRIPS component of the petition (Also see "Indian Court Hands Novartis Setback In Gleevec Patent Case" - Scrip, 7 August, 2007.).

PhRMA's comments to USTR echo Novartis' challenge of Section 3(d)'s TRIPS compatibility, saying "additional requirements for patentability beyond novelty, commercial applicability and non-obviousness are inconsistent with the TRIPS Agreement."

Basheer believes Section 3(d), while poorly worded, is within TRIPS boundaries.

"TRIPS only states that member states are to grant patents to all inventions that are 'new, non-obvious or inventive' and 'have industrial utility.' It does not define any of these terms, leaving it up to the member states to do so. Therefore, it is perfectly acceptable for India to require a high level of inventiveness in so far as pharmaceutical/chemical substances are concerned," Basheer stated.

However, Basheer cautions that interpretation of 3(d) by the patent office and courts could impact adherence to TRIPS. "If the patent office/courts interpret it very restrictively to exclude all kinds of incremental pharmaceutical inventions, then this will certainly contravene TRIPS. However, if interpreted sensibly, it will help weed out worthless patent applications that are filed to merely extend patent terms," Basheer said.

Pre-Grant Opposition Could Lead to Added Hurdles

Beyond legal concerns, PhRMA notes the challenges of gaining patent approval from an Indian Patent Office with "inadequate resources" and "inefficient substantive rules," which has led to a backlog of patent applications. PhRMA is requesting U.S. officials to provide technical cooperation to the Indian Patent Office.

The patent backlog is exacerbated by India's allowance of "pre-grant" oppositions to patent applications, according to PhRMA. The trade group claims competitors delay the patent application process by filing multiple pre-grant oppositions and believes a system needs to be instituted that can quickly dismiss frivolous opposition.

Basheer considers the pre-grant oppositions to be TRIPS compliant because the agreement mandates only that a 20-year term be granted from the date of filing a patent application.

"At a policy level, such a mechanism is absolutely essential for weeding out 'bad' patent applications. You have to remember that India has come into a product patent regime in pharmaceuticals for the first time. Isn't it only natural that we try and ensure that proper 'quality' filters are put in place so that only the truly meritorious patents make it through? Else, we will end up with a number of junk patents like the U.S.," Basheer said.

Counterfeiting remains a significant problem in India, according to PhRMA, which cites India's lack of regulations specific to active pharmaceutical ingredients as contributing to the problem. PhRMA suggests India implement a system that clarifies bulk APIs are regulated pharmaceuticals. Such a system could be similar to one China agreed to employ in a memorandum of understanding with the U.S. (Also see "Import Safety Agreement Further Entwines FDA/China Regulatory Process" - Scrip, 17 December, 2007.).

PhRMA also cites government price controls as a barrier to market access for its members and continues to oppose provisions of the draft National Pharmaceutical Policy of 2006 that would require companies to engage in price negotiations prior to receiving marketed approval for patented drugs launched in India after Jan. 1, 2005. The draft policy could bring 354 pharmaceutical products under price control, according to the group.

India's National Pharmaceutical Pricing Authority has already taken steps to scale back prices of drugs not currently subject to direct government price control (Also see "India Highlights "Public Interest" To Reign In Prices For Non-Scheduled Drugs" - Scrip, 15 August, 2007.).

- Daniel Poppy (d.poppy@elsevier.com)

[Editor's note: Look for additional coverage of PhRMA's comments to the USTR in forthcoming issues of PharmAsia News.]

IP Protection Concerns Grow In India, PhRMA Says

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