Major pharma companies across the world argue that with low profits, they cannot mobilise resource for innovation
In 2005, World Trade Organization’s (WTO) agreement on TRIPS (Trade-Related Aspects of Intellectual Property Rights) came into force that allowed giving Big Pharma exclusive patents in all markets. This move granted pharma companies a monopoly to control (increase) the prices of certain drugs that made it impossible for people to have access to affordable life saving medicines.
Pharma companies have argued that innovation in the field of medical science has to come by way of up scaling the investment which is possible by increasing the prices of certain drugs. Whatever the reason may be, the price increase of medicines would never be in welfare of general public who were thankful till now to get low-cost generic medicines.
Since then, the move has initiated battle between big pharmaceutical companies and the government. When India started granting pharmaceutical patents in 2005, its law makers introduced public health safeguards that made it difficult for companies to get exclusive patents especially for life-saving drugs that are available to public at affordable prices, thus putting patient before profit.
Earlier this year, India revoked a patent on German pharmaceutical company Boehringer Ingelheim’s lung drug Spiriva stating the drug was obvious and did not constitute invention under India’s patent laws. In 2013, Indian Supreme Court ruled out against Novartis when the former declared that small changes to its leukaemia drug Gleevec do not qualify for a new patent.
Big pharma players have been adopting a case called ‘evergreening’ (making minor alterations to existing drugs) to secure new patent in India.
In 2012 India’s Intellectual Property Appellate Board denied patent to Roche Holding AG for a Hepatitis C drug (sold under the brand name Pegasys) stating that technology adopted for drug’s invention was ‘obvious’ and easily replicable.
Similar story was reiterated in January 2015 when the Indian patent office denied patent for hepatitis C drug to US biotech firm Gilead Sciences Inc. on the grounds that the drug was novel but is similar to a known compound; moreover on comparing its efficacy over the previously known element the drug didn’t show any significant improvement on health. All these verdicts have exemplified that Indian patent officials have continued to take tough stance on what and who truly qualifies to secure patent protection. While big pharma players have criticized Indian government for narrowing their chances for innovation, general public all over the world have praised the country for not bowing down under pressure.
U.S and European patent laws easily grant patents to updated versions of the existing drugs regardless of whether they offer any major improvements.
Evergreening may not yet have found its place in India but it sure has been success in other countries. Take for example the United States of America; country’s patent office has been granting monopoly protection easily for innovations that have not shown any major advances over already existing drugs.
Novartis’ Gleevec costs patients USD 70,000 per year in the United States but same medicine costs just USD 2,500 in India. This happened as a result of rejecting Gleevec patent application. Keeping regulations within the interest of patients, India even issued compulsory license on Bayer’s Nexavar, a late-stage kidney and liver cancer treatment, thereby allowing local drug firms to produce generic version of the patented medicine. This resulted in bringing prices down from more than USD 5,500/month to USD 175.
This year’s biggest news in the industry came when Turing Pharmaceuticals hikes the price of Daraprim, brand name for Pyrimethamine (prescribed for the treatment of malaria and toxoplasmosis) from USD 13.50 to USD 750, thus increasing the cost by more than 5,000 percent. Company’s founder Martin Shkreli acquired the rights to Daraprim and justified that the profit from this move would be invested in much needed research and development projects. How is this move justified when the price rise of the drug to this extent made it impossible for patients to afford it in first place? With the skyrocketing cost of the drug in the US it would be cheaper for an American national to travel to India and then purchase at least a year’s supply of the medicine.
Under TRIPS Agreement on pharmaceutical patents, there are conditions where governments can refuse to grant patents. When Indian government rejected patent rights to pharma companies, India broke no rules; in fact no other country had ever given it a thought before. After India’s move, countries like Indonesia, China and Philippines have amended their pharmaceutical patent laws as well to favor general public.
Innovation or Patients
We cannot ignore the fact that innovations in medical sciences are not borne out of thin air. New products rely on years of discoveries for which considerable amount of investment is required.
Where few media reports have lauded Indian stance on restricting patents on drugs, others have criticized it. An international daily quoted Novartis spokesperson, “only one out of 10,000 experimental compounds in development will reach the market place – at a cost, according to one recent analysis, of $1bn (£642m) for each medicine approved. Thus each successful molecule that makes it as a drug needs to pay for the thousands of molecules that fail. Without patents, investment in R&D will plummet and people suffering from diseases without effective options will be left without hope. Simply put, without patents there will be no new medicines for untreated diseases and no new generics.”
However, research companies cannot base this argument in context of just one country as profits should be accounted globally. According to an international daily, 80 percent of the patent applications (1995-2006) were recorded in six developed countries namely, the US, Japan, Germany, France, UK and Switzerland. Till now, pharmaceutical companies did not encounter any problems when it comes to securing exclusive patents for drugs in these six countries.
Innovation is critical but life-saving drugs were, are and will be for patients’ welfare. In developing countries like India majority of people do not have medical insurance and thus pays for healthcare out of personal pockets. Companies cannot expect to hike prices in developing and under-developed countries and make medicines inaccessible for general public in the name of innovation. In this situation, India’s approach of raising the bar for pharma companies for securing patents is justified.
Also, apart from the government it is an equal responsibility of drug producing and research companies to think about people battling deadly diseases as their only option to survive is low-cost generic medicines.
However, pharmaceutical companies are steady on their stance to get patents in the country and even though at present they have not been considered, they cannot be ignored for long by Indian government.
Striking a Balance
In following its patent rules India has maintained compliance with international patent protection law. However, India’s tough stance on patents could cost country substantially in foreign investments which is not positive for pharmaceutical industry.
Big companies have been denied patents till now; earlier this year, Delhi High Court ruled in favor of Novartis’ patent on the respiratory drug Onbrez. This verdict has proved that Big Pharma companies are here to stay to continue its battle in India to protect intellectual property.
There is no denying in fact that research & development in medical science is of crucial importance but when life or death decision has to be made, patients’ welfare supersede innovation.
Giving limited patent protection to western pharma companies and denying them patent for enhanced versions of patented medicines may be the only approach working for Indian government that can work both ways; for patients and pharmaceutical sector.