Patents And Drug Pricing
Patents Drug Pricing
- G.S. Paper 2, 3
- Relations between patents and drug pricing
- About secondary patents and issue of humira case
- Indian patent law
- India’s rejection of secondary patents has kept blockbuster medicines affordable for many.
How are patents and drug pricing related?
- Patents offer their owners market exclusivity for a limited period of time.
- For medicines, this exclusivity should last as long as the primary patent is in effect, typically 20 years.
- Primary patent relates to the active pharmaceutical ingredient (API) of the medicine.
- The end of patent exclusivity is referred to as a patent cliff.
- This is because drug prices fall steeply by as much as 80% after the end of patent exclusivity.
- The price fall is driven by the generic competition that sets in.
- Resultantly, pharmaceutical companies witness fall in profits.
What are secondary patents?
- Secondary patents are claimed for derivatives and variants of the API.
- This may include a physical variant of the API, a new formulation, a dosage regimen, or a new method of administering the medicine.
- The pharmaceutical companies, who face losses, attempt to postpone their patent exclusivity by filing secondary patents.
- The secondary patents prop up before the expiry of a primary patent.
- It thereby stretches the patent exclusivity beyond 20 years.
- This practice of extension of patent exclusivity is called “ever greening”.
- The strategy is most lucrative when employed in the context of so-called blockbuster medicines.
- These are medicines that reap annual revenues exceeding $1 billion.
What is the issue Humira case?
- Humira is one of the world’s best-selling prescription drug.
- Its main ingredient is adalimumab which is a biologic used for the treatment of arthritis.
- In 2015, Humira faced imminent expiry of patent of its main ingredient.
- AbbVie Inc, makers of Humira, reassured its investors by citing the option of filing secondary patents which is allowed in the US.
- Humira thus continues to grow even after the expiry of the patent over its main ingredient.
- Over the years, AbbVie has increased the price of Humira in the U.S. by 100%, by steadily filing secondary patents.
What is the case with secondary patents in India?
- The U.S. recognizes and encourages secondary patents.
- India, however, does not encourage and has limitations in securing secondary patents.
- Humira – Indian Patent Office (IPO) had rejected Humira’s secondary patents.
- Consequently, cheaper versions of the drug were introduced in India.
- Evidently, Humira costs Rs.85,000 in the U.S., and the same treatment costs only Rs.13,500 in India.
What are the other similar cases?
- Another patent case worth mentioning is the Novartis’ Glivec, a crucial leukaemia cure.
- The Supreme Court of India in 2013 upheld the rejection of a secondary patent for Novartis’ Glivec.
- Likewise, Spiriva, a medicine for asthma, enjoys patent protection until 2021 in the U.S., largely due to secondary patents; rejected in India.
What makes Indian patent law unique?
- As per the Indian Patents Act, the product in question must feature a technical advance over what came before.
- Secondary patents for pharmaceuticals are often sought for trivial variants.
- They typically fail to qualify as an invention as prescribed in the Act.
- Further, when a medicine is merely a variant of a known substance, the Patents Act necessitates a demonstration.
- This is mandated in terms of showing the improvement in its therapeutic efficacy.
- The provision also bars patents for new uses and new properties of known substances.
- This additional requirement is unique to Indian law.
- Thus, to be deemed patentable, applications for secondary patents have to clear significant hurdles.
- The patent approval procedure ensures that bad patents stay out of the system.
- Indian patent law is thus commendable in preventing the ever greening practices by pharmaceutical companies.
- This is supportive in making affordable the blockbuster medicines which are crucial to the success of public health.
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