US pharma body slams Indian patent regime

Rupali Mukherjee, TNN | Feb 9, 2016

Mumbai: Criticizing India’s “weak” intellectual property rights (IPR) regime, PhRMA (Pharmaceutical Research and Manufacturers of America), which represents leading pharma and biotech companies in the US, has suggested India remain on the Priority Watch List in the 2016 Special 301 Report.

The Special 301 Report is an annual review of the state of IPR protection and enforcement in trading partners of US, and identifies challenges and opportunities facing US companies in foreign markets. The hearings on the issue will start in March. PhRMA said India’s “legal and regulatory systems pose procedural and substantive barriers at every step of the patent process, ranging from the impermissible hurdles to patentability, posed by Section 3(d) of Patents Act to the narrow patentability standards applied in pre-grant and post-grant opposition proceedings”.

“Not only is this a concern in the Indian market, but also in other emerging markets that may see India as a model to be emulated,” PhRMA says in its submission to the USTR for 2016 Special 301.

Elaborating the reasons for a “weak IPR environment”, it says high tariffs and taxes on medicines, high effective import duties, a burdensome environment for clinical research and ambiguities continue to prevail, with discriminatory and non-transparent market access policies.

“India collects more in taxes on pharmaceuticals than it spends on medicines. While, there is a general lack of access to healthcare in India, with government spending on healthcare at 1% of GDP, one of the lowest levels in the world,” it adds. Pointing out that a patented medicines pricing policy is still pending and may discriminate against importers, it adds no meaningful action has been taken to address barriers, and significant unpredictability in IP protection and enforcement remains.

Countering the US companies’ view, the Indian pharma industry says there has been considerable progress with an efficient grant of patents, and judicial enforcement of patent rights have been strengthened. There is reason to believe that apprehensions relating to abusive opposition procedures, incorrect application of ‘hindsight’ analysis to invalidate patents, compulsory licensing and the consequences of Section 3 (d) have been significantly allayed.
The Indian Pharmaceutical Alliance (IPA) said in its submission on February 5, “recent developments in India suggest that the procedural irritants relating to patents highlighted to the USTR in the past are being seriously addressed. Specific steps have already been taken to strengthen the Patent Office. The Supreme Court has interpreted the Patents Act to remove apprehensions of abusive multiplicity of challenges to the validity of a patent, while important legislation is now in place to speed up resolution of commercial disputes, including those relating to intellectual property rights”.

Some long-standing substantive grievances of US companies relating to India’s IPR regime remain. These are mainly compulsory licensing provision in Section 84, and the prohibition on grant of patents to new forms of known substances without therapeutic benefit in Section 3(d) of the Patents Act. US innovator companies are also concerned by the alleged lack of data exclusivity.

India’s stance is that the current patent regime is fully TRIPs compliant and strikes the appropriate balance between the grant of monopoly patent rights and public health imperatives,” IPA director general D G Shah told TOI.

The IPA has presented data to suggest that the gulf between US and Indian patent regimes may not be as wide as perceived in terms of outcomes for patentees. Several collaboration deals between US firms and domestic companies including Amgen with Dr Reddy’s to distribute Amgen’s oncology and cardiology medicines, Gilead’s licensing agreement with companies for hep C generic medicines, Merck and Sun Pharma for tildrakizumab, and Boehringer Ingelheim US subsidiary with Lupin for linagliptin, are ways in which MNCs are collaborating with companies to increase access in the Indian market.

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