Knowledge and Intellectual Property in the Indian Pharmaceutical Industry

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Knowledge and Intellectual Property in the
Indian Pharmaceutical Industry

• Bimal K Raizada
• Senior Vice President
• Ranbaxy Laboratories Limited
• I I T - Biohorizon Seminar
• New Delhi
• March 2, 2002

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The Knowledge Century

• Peter Drucker
• To make knowledge driven work productive is the
  greatest management task of this century just as
  to make manual-work productive was the greatest
  management task of the last century

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The Knowledge Imperative

• Highly turbulent world economy prone to abrupt
  shifts
• Pharmaceuticals v. Gene therapy and biologicals
• Communications internet and related services
• Economic melt downs, global slow down
• Traditional land-labour economies are more prone
  to be affected
• It is imperative to be able to anticipate and
  adapt to the inevitable changes

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Knowledge the differentiator

• Highly polarized
• 80 of Global GDP ( 30 trillion) accounted by
  the high income countries
• Top 10 companies all ORCs have 40 market
  share
• 10 countries/ markets presently cover 80 of
  global pharma market
• Technology reducing time and capital requirements
  for development

lt40 yrs
40-50 yrs
100 yrs
150 yrs
The Avg. time taken for reaching developed
economy status
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What is Intellectual Property?

• Intellectual property, also known as IPR, allows
  people to own their creativity and innovation
  just as they can own physical property.
• The owner of IPR can control and be rewarded for
  its use, and this encourages further innovation
  and creativity to the benefit of us all.

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Indian Scenario
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Indian Patent regime

• Current - Governed by the Indian Patents Act of
  1970
• Specifically excludes patent coverage for
  products
• Process coverage for 7 years from the date of
  filing
• In effect, limited protection to research-based
  pharmaceutical companies
• TRIPS Requirements - effective from Jan 1, 2005
• Equal treatment to nationals and non-nationals,
  regardless of their of country of origin
• Product patents shall be available (mail-box
  system till 2005)
• Importation will be considered working of the
  patent
• 20 year protection from the date of filing
• Burden of proof on the defendant

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India and IP Levers of Growth
Brain Power Indian Scientists
INNOVATION
Entrepreneurship Industry
Infrastructure Government / Private
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The Case of Indian Pharmaceutical Sector
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IPR and Indian Pharma Industry

• DPCO and exemption
• Recognize in-house research
• Globalization
• Domestic competition
• Limited market
• Exports will not be possible without being TRIPS
  compliant
• Workable IPR protection system needs to be in
  place

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Apprehensions

• High-priced medicines unaffordable for majority
• Very few new drugs will qualify for exclusivity
• 10-15 years before significant number of drugs
  are covered
• Global drug pricing is not uniform it is based
  on affordability
• Compulsory licensing option available
• Domestic industry will be badly affected
• Self reliant net forex earner 800m
• Well developed chemical infrastructure
• IP from research done in India will reside
  elsewhere
• Stronger IPR regime will catalyze efforts in RD
• Reverse brain drain
• Foundation for becoming a true scientific and
  technological power

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Question of National Interest ?

• WTO/ TRIPS provides safeguards
• Knowledge, Interpretation and Implementation
• Non-Tariff barriers
• Data exclusivity
• Compulsory Licensing
• Bolar Provisions
• Legal systems
• Tariff safeguards
• Parallel imports

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Evergreening of Patents

• Patentability Article 27
• .. Any inventions, whether product or processes,
  in all fields of technology, provided they are
  new, involve an inventive step and capable of
  industrial application
• Instances of evergreening
• Method of use The use of a compound.. or A
  method of using a compound which comprises..
• Method of treatment patents new formulations (
  new indications, strength or usage) for existing
  drugs
• New Patent granted during life of original patent
  or after expiration of the original patent

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Evergreening of Patents

• Submarine patents an example of evergreening
• Prosecution of a patent application is extremely
  lengthy patent granted from date of approval
  and not filing
• Companies intentionally keep the application
  secret or delay the progress of the patent
  examination
• E.g GSK amoxicillin and potassium clavulanate
  extension beyond 2002

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Bolar Provisions .. RD during life of patent

• USA, Canada, Israel, Australia, Hungary and
  Croatia have specific Bolar provisions
• Japanese case laws market preparations during
  the patent are legal
• DSB ruling in EU vs Canada restriction on only
  production for commercial use, no restriction on
  RD or production for regulatory filings
• Data exclusivity- USA and Canada stipulate
  maximum of 5 years of confidentiality from date
  of filing

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Compulsory Licensing

• Article 31 provision for providing patented
  products at affordable prices, prevent
  anti-competitive monopolistic behavior during
  patent life
• Compulsory licensing (Brazil/Argentina/Israel)
• Production for exports where permitted (Israel)

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Compulsory Licensing

• Clear articulation of abuse of monopoly
• Inability to meet demand through importation at
  reasonable terms
• Refusal of grant of license adversely impacting
  health policy or export potential
• Unfair licensing terms
• Definition of adequate remuneration and timeframe
  for settlement between licensee and licensor
• Subsequent inventions and processes covered
  through licensing system
• US case law - consumer interest issues/control of
  monopoly

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Provisions in Israeli Law

• Production for Exports permitted - if importing
  country permits such activity for a patented item
  or for non commercial experimental activity.
  (Regulatory approval production)
• Compulsory license, based on public enquiry, on
  abuse of Monopoly
• Insufficent availability on reasonable terms
• Product not produced locally and Patentholder
  refuses License to a local manufacturer at
  reasonable terms
• Prevents local development or launch
• Patentholder gets 60 days before hearing License
  only possible after 3 years of Patent grant.

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Brazil Story

• Article 68 compulsory licensing under
• Production of particular drug is not carried out
  in Brazil after a period of 3 years has elapsed
  from grant of patent
• Patent holder indulges in abusive pricing
• US stance article 68 unnecessary as Article 71
  allows compulsory licensing for national health
  emergency
• Final settlement
• US withdraws case against Brazil
• Brazil to give advance notice and adequate
  opportunity before invoking article 68

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Leveraging Knowledge

• Current Drawbacks
• Poor IPR literacy
• Patent Office infrastructure
• Legal framework for IP
• Lack of entrepreneurship (Startup Funds)
• Data on traditional knowledge
• Way Forward
• Improved IP administration infrastructure
• Increase public awareness
• Curriculum based training in IP at college level
• Technology Parks
• Digital bank for traditional drugs
• Venture Capital Angel Investors

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Key Opportunity Areas

• Exploit the next revolution
• Information Technology current
• Biotechnology immediate future
• Move up the value chain
• Shift from bulk to generics
• From development to research
• Globalize
• Grow at rates gtgt than the developing world

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THANK YOU