Indian Patent Act &

Indian Pharmaceutical IndustryA Presentation by: Deep ShahSubmitted to: Sir Adnan Ejaz

News Flash The Indian pharma industry ranks 4th in terms of volume and 13th in

terms of value globally. The Indian pharmaceutical industry is one of the most attractive investment

destinations in the world. With ever increasing returns, lowering risks and anticipated multifold

growth, investors are more interested in this industry than ever before. Since 2000, the drugs and pharma sector has attracted one of the highest

foreign direct investment (FDI) inflows of approximately $12,689 million (April 2000 to September 2014).

From its nascent stages in the 1970s, the Indian pharma industry has become a mature industry.

The industry was previously known for manufacturing generic drugs.

Indian Pharmaceutical Industry

R & D

Manufacturing of

branded

Generic and branded generic drugs

Manufacturing APIs

Laboratory testingAnd Now…

Intellectual Property Rights

Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.

IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create.

By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.

IPR & Indian Pharma Intellectual property rights (IPR) in the pharma sphere have been a

contentious issue globally. Previously, the IPR debates were typically between the branded pharma companies and generic pharma companies.

India was no exception to this IPR tussle and in view of the large poor population in need of basic healthcare, the Indian authorities were initially not keen on granting substantial IPR protection.

However, over a period of time, the Indian authorities have become more sensitised to the need and importance of IPR protection for the long-term good of industry.

The Process ERA The Indian Patent Act 1970 which came into force in 1972 was in many ways a

watershed in the history of the patent system. Its not only disallowed the grant of product patent in the highly sensitive and

socially relevant health sector but also restricted the validity period for process patents in these sector to 7 years from the date of filing or 5 years from the date of sealing whichever is earlier.

Since the period required for discovering and developing a new drug is not less than 10 years the provision for process patent with the shortened period of validity had made the system itself redundant.

The consequences of such a radical change in the Indian Patent system let one major shifts in the nature and character of the Indian industry.

Many foreign companies discouraged by provision of IPA 1970 and Foreign Exchange Regulation Act which allowed new investment only for companies with a foreign equity holding of 40% or less opted not to operate in India 1970.

The Product ERA A major change in the patent laws in India was the enactment of the Patent (Amendment)

Act, 2005, which made patent laws in India compliant with the TRIPS.

Prior to the 2005 amendment, only processes were patentable and not the end product itself.

Therefore, if a company chose to manufacture the same product but used a different process, it could do so without violating Indian patent laws.

This regime naturally caused concerns to various companies, especially branded manufacturers, as it did not protect their inventions fully and allowed others to manufacture the same drug, which would have otherwise enjoyed patent protection in other jurisdictions.

The Change

With the 2005 amendment being enacted, product patents and process patents have been permitted for a period of 20 years and special provisions have been introduced to prevent ever-greening of patents.

The 2005 amendment is viewed as a milestone which substantially changed the protection regime in India. However, patent disputes have regularly arisen in India, recently in the context of compulsory licensing.

Compulsory Licensing

Under Indian patent law CLs can be awarded if: The reasonable requirements of the public with respect to the patented

invention have not been satisfied; or The patented invention is not available to the public at a reasonably

affordable price; or The patented invention is not worked in the territory of India.6

In the pharma context, the conditions for grant of a CL are aimed at preventing a situation where the public health is prejudiced by the exclusivity granted to the patented product.

Case• Natco Pharma Ltd vs Bayer

• Bayer patented drug nexavar is to treat advanced stage of kidney and liver cancer.

• The drug is not a life saving but life extending and has to be taken by the patient lifetime.

• The cost of therapy is INR 2,80,428/- per month.

• March’12, India granted first compulsory license to NATCO.

The ERA of Revolution FDI up to 100 per cent is permitted with no requirement of prior FIPB

approval.

Growth rate ~13%

Contributes ~22% to world’s generic drugs market

~80% Ingredients used by US manufacturers- produced in India and China

More than 100 US FDA approved plants- highest outside USA. (More than combined total of China and Italy)

#The_Future The Indian pharma industry has come a long way and made significant

progress in infrastructure development and technical and R&D capabilities. With the integration of the Indian pharma market with the global market,

new issues are being faced and tackled by the industry. Some old challenges such as IPR and pricing continue to be contentious

issues in the market. The trends of increased foreign interest in the markets and increased

investments in R&D are expected to stay. With numerous strengths and a growing consumer class, the pharma

industry in India may face certain legacy and new issues, but it is expected to grow multifold and continue to be an attractive investment destination.

Reference http://www.financialexpress.com/article/pharma/management-pharma/issue

s-and-trends-in-the-indian-pharma-industry/39381/ (Last Access Date 16-10-2015)

Journal of Intellectual Property Rights, Volume 15, November 2010, Page no. 474-476

Images by Google

Case: Pankaj Kumar, Intellectual Property Attorney

Thank You