Evergreening of Patents- A boon or bane?
Ever-greening of patents - A boon or bane is a procedure in which the patent rights are renewed without any improvement in the medicinal effectiveness of the drug. Simply said, the patents are extended for another twenty years with no improvement in the drug's capacity to treat a condition.
On the one hand, the Indian government is battling to supply more and more medications at cheap cost in order to make treatment more accessible to all classes of people, but patent holders are under pressure to extend the life of their patent rights and market monopoly. The selfish purpose behind the patent holders' effort is to maintain royalty income from the commercial exploitation of the patents they have and to retain exclusive rights over the production of the stated pharmaceuticals in the market, hence remaining the market powerhouse for another few decades. The tribunals, as well as the courts in India, have made judgments in favour of the government and against patent holders who simply try to make their patents evergreen by slightly modifying the medicine combination. This blog explores several tactics used by pharmaceutical businesses throughout the world for evergreening.
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U.S. Scenario: The 30 month stay provision
When a firm develops a new medicine, it must obtain regulatory clearance from the Food and Drug Administration (FDA) by filing a New Drug Application (NDA) demonstrating that the product is safe and effective. This assures that the medication may be sold in the United States. To protect themselves from intellectual property infringement, the creators choose to patent their product. A medicine that has been authorized by the FDA is listed in the FDA publication Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the "Orange Book." Any new patents related with the drug must also be listed in the Orange Book by the drug producer. A generic drug producer who wants to develop generics of a brand-name medicine must file an Abbreviated New Drug Application (ANDA) with the FDA under the 1984 Hatch-Waxman amendments to the Food, Drug, and Cosmetics Act. The ANDA must demonstrate to the FDA that the generic is bioequivalent to the brand-name medicine. Furthermore, the generic must not infringe on any brand-name medicine patents. To meet this criterion, the generic producer must certify to at least one of the following:
- the drug has not been patented;
- the patent has already expired;
- the generic will not enter the market till the patent expires;
- the patent is invalid or will not be infringed by the generic.
If the generic producer certifies to the fourth alternative (known as "paragraph IV certification"), it must promptly notify the patent holder of its intentto launch a generic. A paragraph IV certification grants the brand-name corporation the ability to sue the generic producer in court within 45 days on the grounds that the generic infringes on a patent listed in the Orange Book. The hitch is that if the brand decides to sue, the legislation immediately bars FDA approval of the generic for 30 months, or until the litigation is settled or the patent expires, whichever comes first. The brand might sue, claiming that the generic infringes on one of the patents mentioned in the Orange Book, and receive a 30-month extension regardless of whether the challenge was correct or the patent was legitimate. In principle, if the brand has n number of patents listed in the Orange Book, it might continue litigating for 30 months or until the patent expires by launching a separate lawsuit for each listed patent. According to a study conducted by the US Federal Trade Commission (FTC), roughly 72 percent of brand-name corporations took use of this option.
Bristol-Myers Squibb and Taxolc case study
Under the trade name Taxol, Bristol-Myers Squibb (BMS) offers paclitaxel, which is used to treat ovarian, breast, and lung cancer. Paclitaxel was developed by the National Cancer Institute and placed in the public domain, so it could not be patented. The FDA authorized the medication in December 1992. According to FDA regulations, BMS was granted a five-year market exclusivity over paclitaxel sales as Taxol until December 1997. However, before the five-year exclusivity period expired, BMS received two patents on paclitaxel for methods of administering it as an anti-tumor drug and requested to prolong the exclusivity term. When the five-year tenure expired in December 1997, a number of generics attempted to join the market. Many of them were contested by BMS based on patents mentioned in the Orange Book and got an extended monopoly for 30 months after 1997. This kept generics from entering the market until 2000, when Taxol sales peaked at $1.6 billion. Eventually, the courts concluded that the BMS patents were invalid, with the exception of some elements that could not have prevented generics from entering the market on their own. Attorneys general from 29 US states filed a lawsuit against BMS in June 2002, saying that in 2000, it restarted the procedure in cooperation with a California-based business, America BioScience. According to the lawsuit, the two corporations filed "sham" litigation in order to further delay the arrival of generics onto the market, using the 30 month extension once more. The case is still pending in court.
Strategies used for evergreening
It is unsurprising that the world's largest pharmaceutical corporations no longer wait for their patent(s) to expire before beginning the evergreening procedure. To maintain their monopoly and control, companies develop tactics to prolong patents and avoid generic competition as soon as the product is available for patenting. These'tactics' or "life cycle management plans" comprise not just patent-related methods, but also other market-delaying or restricting measures. This section highlights several popular evergreening tactics, with a focus on the pharmaceutical business.
A producer can file for additional patents on a medicine in order to extend its monopoly on the drug in addition to the original patents. This is known as "stockpiling." Brand-name corporations "stockpile" patent protection in this case by securing different 20-year patents on numerous qualities of a single product. The expiry of these patents can extend market exclusivity for several years beyond the underlying patent's term. Line extension refers to schemes in which firms seek to acquire extended periods of exclusivity by obtaining patents on changes to medications or methods of use.
Franchise extension to successor drugs
The battle between brands and generics has progressed to a new level. Brand makers are extending their patents beyond their expiration dates by creating euphoria about the most original and enhanced drug effects based on brand reliance and constant improvisation in the chemical composition that they should re-patent, thereby limiting the entry of generics into the market. This "patent to patent" technique is utilized to maintain market share by providing customers with a new, allegedly superior medicine line to replace the original drug whose patent is about to expire. This type of patient switching to the new drug line minimizes market share loss due to consumer attrition while also discouraging generic drug manufacturers from entering the market with a generic for the original drug because most patients have already transitioned to the new drugan additional period of exclusivity by gaining patents on modifications to the drugs or their method of use.
Extended patent durations for drugs are currently available in a number of nations. Australia, Japan, Korea, Israel, the United Nations, and European Union member states are among them. Although there are no internationally established standards for patent term extension, the laws for patent term extension in those nations that allow it share several characteristics:
- Extension is not automatic;
- the patent owner must make a specific application;
- The length of the extension granted depends on the length of time between the date of filing of the patent application and the date of marketing approval;
- A maximum extension of 5 years is provided for;
- The rights of the patent owner in respect of the patent are usually limited during the extended term compared with the rights available during the original term.
Indian Judiciary’s stand on Evergreening of Patents
In the case of Novartis AG Vs. Union Of India [ 2013], Novartis filed a patent application for the grant of a patent over an anti-cancer drug called GLIVEC, which is used to treat Leukemia and Gastrointestinal Tumors and was built from the BETA CRYSTALLINE form of "IMATINIB MESYLATE" and has a patent in more than 35 countries. The Controller of Patents in Chennai denied the application, stating that the applied patent is a slightly different version of an already existing patent, ZIMMERMANN PATENT, and thus failed to satisfy the requirements of novelty and non-obviousness, as well as that the Patent is non-patentable under section 3(d) of the Patents Act, 1970.
Affected by the Controller's decision, Novartis filed a writ petition before the Madras High Court claiming that Section 3(d) of the Act is unconstitutional because it is not in compliance with the TRIPS agreement and also violates Article-14 of the Indian Constitution, as well as another against the order passed by the Controller of Patents at the Chennai Office. In 2007, the Madras High Court transferred the case to the Intellectual Property Appellate Board, which held that while the invention meets the criteria of novelty and non-obviousness, it is barred by Section 3(d) of the Patents Act, 1970, which was added to the Act to prevent patents from ever-greening.Novartis also filed a Special Leave Petition under Article 136 of the Indian Constitution, and the two-judge bench of the SCI rejected the appeal, holding that there was no newness proven by Novartis after a thorough comparison of both patents, and thus no new patent can be granted over the similar patents as that would result in the abuse of the idea behind the Patent Law of 1970, resulting in the ever-greening of the pre-existing patent.
The verdict of the Hon'ble Supreme Court aims to prohibit the ever-greening of existing patents and is a relief to individuals who cannot afford the lifesaving medicine since these pharmaceutical business hubs offer such lifesaving drugs at exorbitant costs, making them inaccessible to the general public. Coming up with something the world has never seen before, as any would-be inventor knows, may be difficult. Tweaking something old and calling it new, on the other hand, is much easier, and thus the claims made by existing patent holders that they are doing this on purpose—being to further invest in R&D (Research and Development), which is ultimately done when the patent expiry is near and the existing monopoly in the market is about to be lost. This R&D on existing drugs costs nearly 10% of what the company would have to spend if they went for an entirely new drug, which is extremely risky because even after spending crores on new drug research, those drugs can fail in clinical trials, as we have seen a lot recently during testing of vaccines for the Covid 19 virus.
In its decision, the Supreme Court said unequivocally that India is a developing nation and that the provision of medicines at a lower cost is critical to people's lives. Section 3(d) of the Patent Act of 1970 prohibits these large pharmaceutical businesses from getting secondary patents by incorporating small improvements in existing technology.
Furthermore, in early October, India and South Africa requested that the World Trade Organization's TRIPS Council seek a temporary waiver suspending TRIPS requirements on any medical items required to combat the COVID-19 epidemic. On October 15, 40 WTO member countries met to debate the idea. The majority of developing nations welcomed it, however several wished for additional time to explore the consequences with their home governments. Most affluent nations, including Canada, rejected the plan, arguing that TRIPS already provides many flexibilities for such situations. Because developed countries hold the majority of pharmaceutical patents, their opposition indirectly favoured the trend of ever-greening. However, patenting treatments for such ailments would not only be the most promising investment for these countries, but it will also carry a risk of failure. However, as everyone knows, medical research is never in vain- something new is always discovered.
Pharmaceutical corporations that invest significant sums of money in medication research anticipate comparable earnings in return, and they are correct. This possibility is amply given for them by patent and market exclusivity rights, which, when combined with suitable pricing tactics, should recoup research expenses and earnings owed to the company's shareholders. Companies frequently strive to extend this monopoly for inordinately long periods of time using evergreening tactics ranging from aggressive litigation to clever patent law manipulation. Such techniques, while legal, are in direct conflict with the objectives of healthy competition, the spirit of patent laws, the interests of generic drug manufacturers, and, most importantly, the interests of the customer in India, the Patents Act firmly opposes it, and Indian Courts have ruled in favour of it. The Novartis case is a clear illustration of how the monopolistic activities of the largest market participants are scrutinized by the Court, and how the Courts will always prioritizethe people over everything and everything.