India: Do we need Patent Term Extension and Non-Patent Exclusivities for Pharmaceuticals?

India, though in a phase of rapid economic development, still has the bane of poverty. In this country, around 22% of the population is Below the Poverty Line ^[1], and hence most of the nation’s policies are oriented towards the poor. India’s IP Policy is no different, as the IP legislature in India is mostly oriented towards giving the general public easy and inexpensive access to medicines. Indian IP policy drafters have used every flexibility in the Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS), to which India is a signatory, for this purpose.

The curious case of drug development

The process of development of drugs to treat diseases and ailments is pretty much painstaking. A drug regulatory authority, (e.g. The US Food and Drug Administration-US FDA; Central Drugs Standard Control Organization-CDSCO in India) monitors and governs the testing of the New Chemical Entities (NCEs) through pre-clinical and clinical trials to prove their safety and efficacy to treat an ailment. Several NCEs fail at some of the other stages, rendering all the money and efforts in vain. The amount of money invested in each NCE is of the order of billions of dollars. ^[2] The time period it takes for the development of the NCEs as approved ‘Drugs’ typically ranges from 10-15 years ^[2]. The chances of a candidate making it through this whole of the process, to the desk of the pharmacy, are merely 2% ^[2]. So, in this precarious situation, the 20 years of patent protection granted to the drug products are not sufficient to recover the huge investment made in the R&D of the product. So, the pharma companies usually demand the extension of the protection of their monopoly over the drug product. This Patent Term Extension (PTE) is granted by the Patent Office of the region or country.

Now, these clinical trials generate data regarding the therapeutic activity and safety of the drug. So, if a generic player wants to launch the same drug, it will need this data to prove that its generic version of the drug is ‘equivalent’ to the innovator’s product. Since the innovator companies invest huge amounts of time, money, and efforts into generating this data, they demand exclusivity of this data. This Clinical Trial Data Exclusivity is under the discretion of the drug regulatory authority and regardless of the existence of a valid patent on the subject matter. If granted, it gives an additional layer of protection to the innovator drug product.

In the following paragraphs, we will discuss the Patent Term Extension and Clinical Trial Data Exclusivity provisions present in the US and European, legislature, in comparison with the Indian scenario. Several other countries also provide these provisions, but we will limit our discussion to these three jurisdictions.

Patent Term Extension

In the US, according to the Drug Price Competition and Patent Term Restoration Act, or the Hatch-Waxman Act, 1984 ^[3], the patent term can be extended up to 5 years, however, the total patent term (including extension) should not be more than 14 years after the date of approval of the product by FDA. This period may be extended by a period of another six months of Pediatric Exclusivity.

The European Patent Office similarly provides an extension of protection in this regard, by giving the Supplementary Protection Certificate (SPC). ^[4] The SPC allows extending the Patent term by 5 years. however, the total patent term (including extension) should not be more than 15 years after the date of approval of the product by the European Medicines Agency. Additional 6 months’ protection is given to medicinal preparation to treat children (Pediatric Formulations). This extension is not applicable to orphan drugs ^[11]

Non-Patent Exclusivities:

The US FDA grants different types of Non-Patent Exclusivities ^{[5] [6]}–

1. 5 years for a New Chemical Exclusivity (NCE) for the Active Ingredient approved for the first time
2. 180 days exclusivity for the generic player who first files and maintains an ANDA (Abbreviated New Drug Application) with Paragraph IV certification, which requires the applicant to prove either that he will not be infringing the innovator’s patent or that the innovator’s patent is invalid/not enforceable.

• 3 years of New Clinical Study Exclusivity for submission of “reports of new clinical investigations (other than bioavailability studies) essential to the approval of the application [or the supplemental application] and conducted or sponsored by the applicant”. For example, in case of preparation of a drug previously approved, which differs in the route of administration, drug delivery system, dosing regimen, modification of the drug such as salt or ester, which won’t affect the pharmacological actions of the drug. The exclusivity period would start from the date of NDA approval of the same drug. This is for the Active Ingredient has been approved before in another application.

1. 5 additional years in case of antibiotics that treat some serious condition, for products that have obtained Qualified Infectious Disease Products (QIDP) designation under the Generating Antibiotics Incentives Now (GAIN) Act.
2. 7 years for an orphan drug, i.e. the drug for the treatment of the rare diseases
3. 6 months of Pediatric Exclusivity which gets added to the existing Patents and exclusivities.

The table below summarizes these exclusivities in relation to whether innovator and/or generic players can avail them.

Table 1. Scheme of Exclusivities granted by the US FDA

The European Medicines Agency, after 2005, started the 8+2(+1) formula which dictates that the innovator will be getting 8 years’ data exclusivity and 2 years of market protection, during which no generic can be placed on the market and an additional 1-year exclusivity for the new indication which shows significant clinical benefit (same as NCI in the US). Prior to this rule, there was a distinction between nationalized procedures and centralized procedures. The following table indicates the exclusivity period based on the application date and type.

a – Austria, Denmark, Finland, Ireland, Portugal, Spain, Greece, Poland, Czech Republic, Hungary, Lithuania, Latvia, Sweden, Slovakia, Malta, Estonia, Cyprus, Bulgaria, Romania, Norway, Iceland, and Liechtenstein. (‘6-year countries’)

b – Belgium, Germany, France, Italy, Netherlands, Sweden, United Kingdom, Luxembourg. (’10 year countries’)

In addition to this, the orphan drugs get 2 more years of exclusivity. ^{[7], [11]}

India

India has not, as of yet, implemented such provisions, because-

1. Granting of the PTE and Non-Patent Exclusivities would require the establishment of the Patent Linkage system in effect, which is not there at present, and India is not planning to do it in the near future, because India has not, as of yet, entered into any trade agreement which requires such provisions.
2. The TRIPS agreement also does not require members to grant such benefits to the innovators, this means that India is in no obligation to grant PTE and Non-Patent Exclusivities. ^[8] Whatever pressure is there on Indian policymakers to implement such benefits, are there due to the Trade Agreements like the Trans-Pacific Partnership (TPP), Regional Comprehensive Economic Partnership (RCEP). These agreements constitute a new regime called TRIPS Plus, which is lobbied by the big pharma companies of the developed countries. Currently, India is not a signatory to any such agreements.
3. If at all these provisions are implemented, they would severely delay the entry of generic versions of the drugs into the market. India, being a developing country, simply cannot afford granting PTE and DE to every request, at the expense of access to the poor.
4. On the same lines, the Indian Pharma sector is largely thriving on the generic players, so the industry is hardly affected by the absence of provisions for PTE and DE.

These provisions have long been sought by the Big Pharma lobby of the developed nations, by criticizing India’s ‘weak’ IP policies. Companies like Bayer, Novartis have tried to tweak with the legislature for the same purpose. ^[9] Several generic pharma companies and access-to-medicines activists like Médecins Sans Frontières (Doctors without Borders) have constantly warned India about the effects of such provisions, saying that India will no longer remain the ‘Pharmacy of the world’. ^[10]

Implementing these would be advantageous only to the innovator companies, and millions will be stripped of their right to live a healthy life. This is being sugarcoated to say that these provisions will boost trade and innovation in India. On the other hand, if these provisions are not introduced, India will be under constant pressure to do so at the earliest, but it won’t kill anyone. Now it is up to the policymakers whom they are going to put first.

About the Author: Mr. Swapnil Chandwade intern at Khurana and Khurana, Advocates, and IP Attorneys. In case of any queries, feel free to reach [email protected].