INDIAN GENERIC DRUGS:The Journey so far

INDIAN GENERIC DRUGS : THE  JOURNEY  SO  FAR

 The introduction of Indian Patent Law, 1970 gave birth to the generic drug industry in India. The rise of the Indian pharmaceutical industry in recent years at a remarkable rate is a great achievement. This has led large branded pharmaceutical companies to adopt various strategies to last their patent protection for as long as they can. This paper analyzes the role and the growth of Indian generic drugs and various challenges before them from the branded drug producers.

INTRODUCTION:

In 1996  HAART – an effective combination therapy that delays the onset of AIDS-became available to the HIV/AIDS patient in rich countries. Within four years, death rates in developed countries had dropped by 84%.The cost of these Antiretroviral (ARVs) at US$10,000-15,000 per person per year were not affordable by people living in poor countries. Within five years its generic equivalent made available by Indian Pharmaceutical Company to the poor countries. This led to the price war between branded and generic drug makers that forced the large companies to lower down its price.

Around 2001,triple combination therapy was available from Indian generic manufacturers for as little as $295.Such has been the role played by generic drugs in the field of pharmaceutical.

WHAT ARE GENERIC DRUGS?

A generic drug is an equivalent of an original branded drug. Its active substance is “essentially similar to the original product and provides the same quality, safety and efficacy as the original brand. A generic drug is much less expensive than their branded equivalent since marketing and development cost is much lower. For example the brand name antidepressant Prozac can cost $ 169.49 at wholesale, the cost for generic flouxetine HCL is $ 2.85 wholesale.

WHEN CAN THEY BE PRODUCED?

A pharmaceutical company obtains patent protection for its invention drug. The patent protection last for 20 years. A generic drug allows a company to reverse-engineer an existing product and manufactures it under a non-trademarked name. Thus its generic version can only be made

-if patent has expired or

-the generic company certifies the brand company’s patents are either invalid,

-unenforceable or will not be infringed for drugs which never held patents.

WTO proposes 2 means by which generic versions of drugs under patents may be produced:

-Voluntary Licensing

-Compulsory Licensing

Under voluntary License an organization can request a voluntary license form a patent holder to allow generic drugs to be supplied during a public health emergency, either through imports or by local production.

A Compulsory license is a government license that enables someone other than the patent holder to copy patented products and processes without fear of prosecution. If the patent owner quote its price at a very high rate that becomes unaffordable by public or if denies to sale it then government can issues licenses on its own. However following Doha Declaration a country can issue ,a compulsory licenses for life saving drugs without the payment of royalties.

Due to certain constraints of compulsory licenses   WTO issued the so called ‘paragraph 6 waiver’ which allowed least developing countries to import generics from other nations. This provision is though also complicated.

MARKET SHARE:

India’s emerging pharmaceutical industry has appeared as the world leader in the fabrication of standard generic drugs. Hatch-Waxman allowed the U.S Food and Drug Administration to approve generic drugs for sale if a product’s manufacturer could prove that its copy of a branded drug had same chemical structure and the same effect as the patented drug.FDA approves hundred of generics each year. In Europe also generic drugs have gained popularity. In the year 2008,Indian pharmaceutical market was assessed at $7,743m which witnessed an augmentation of 4% over 2007.

Business observers predict that Indian Pharmaceutical market will escalate at an increasing mode as compared to the global pharmaceutical market at a CAGR of 13.2% during the fiscal years 2009-14 to reach overall worth of $15,490m in 2014.

India began to abide by WTO’s Trade Related Aspect of Intellectual Property Rights agreement and acknowledged product rights after revision of Indian Patent act in 2005.Indian firms have layed down strategies to benefit from

Top ten Pharmaceutical companies in India (turnover in 2007)

·  Ranbaxy Laboratories:

India's largest pharma firm   by sales with the returns touching Rs 4,198.96 crore              

·  Dr.Reddy’s

With a turnover of Rs 4,162.25 crore (Rs 41.622 billion) ; second largest drug firm in  India by sales                 

·  Cipla

generated an annual revenue of Rs 3,763.72 crore (Rs 37.637 billion); the third largest pharmaceutical firms.

·  Sun Pharma

Sun Pharma Industries had overall earnings of Rs 2,463.59 crore (Rs 24.635 billion)                

· Lupin         
Lupin Labs yielded total profit of Rs 2,215.52 crore (Rs 22.155 billion) in 2007

· AurbindoPharmaceutical
India's sixth largest pharma company by sales, Aurobindo posted Rs 2,080.19 crore (Rs 20.801 billion) annual returns in 2007.

· GlaxoSmithklineg
With 2007 turnover touching Rs 1,773.41 crore (Rs 17.734 billion, GSK is India's seventh largest pharma firm.

·  CadillaHealthcare
Cadila's earnings was Rs 1,613.00 crore (Rs 16.13 billion) in the fiscal year 2007,            

· AventisPharma
With an annual revenue of Rs 983.80 crore (Rs 9.838 billion) in 2007, Aventis Pharma has made a place for itself in the top ten pharma companies in India

· Ipca laboratory

Ipca is India's 10th largest pharma company by sales and in 2007 it had a turnover of Rs 980.44 crore (Rs 9.804 billion)

According to Mckinsey the Indian Pharmaceutical Industry is expected to grow at the rate of 10-14% that it will touch $40 billion by 2015

CHALLENGES

The progress of Generic drug makers has alarmed the branded drug makers. These large pharmaceutical have come forward with various strategies to tighten their patent duration for a long period of time. Evergreening and Authorized Generic are such an attempt made by them.

‘Evergreening’ is when patent owners aims to extend the patent duration by seeking a new patent that “updates” the first one before its expiration and is done by claiming things such as an “inventive” method for administering the pharmaceutical compound covered by the base patent. For pharmaceutical products, this means an extended monopoly that excludes generic drugs from the market.

NOVARTIS CASE

The Madras High Court dismissed Swiss pharmaceutical giant Novartis’s petition in 2007 challenging the constitutional validity of section 3(d) in the Indian Patents Act, which prevents patenting of minor modifications to products and processes. Their patent request on their anti cancer drug, Glivec was declined by Indian Patent office since it did not showed the ‘enhanced efficacy’ as mentioned in section3(d).

In Indian Patent Act as per the final amendment proposed and passed in 2005, the Section 3(d) reads as follows: 

The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant."

[Explanation - For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.]

It is expected that the patent extension would be restricted through above amendment. In US the patents   are issued for simple improvements also thus giving a strict monopoly stick in hand of the makers. The section proposes to stand against the strategy of ‘Evergreening’.

Another strategy adopted by large pharma producers is Authorized Generics. They are pharmaceuticals marketed by or on behalf of an innovator drug co. but sold under a generic name.  One example is Merck- Dr. Reddy’s: Generic Zocor® : Teva Pharmaceuticals Industries Ltd. attributed 9.5% drop in shares to concerns its generic version of Merck & Co. Inc.'s cholesterol drug Zocor.*In foreign,180 day exclusivity period of Hatch Waxman though keeps an eye on such practices.

BMS vs.  RANBXY CASE

Due to such a fierce competition there has been a rise in patent litigation also. The Delhi High Court (HC) recently turned down Bristol-Myers Squibb’s (BMS) request to temporarily stop Ranbaxy from selling its generic version of the American firm’s patented hepatitis B drug Baraclude in India. 
The court rejected the plea for an interim injunction, which means Ranbaxy can continue to sell its drug in India. The court will now go to a trial stage, which is a long drawn process, to verify the validity of BMS’ patent for Entecavir (Baraclude) and whether Ranbaxy’s generic version infringes on it. 
The Delhi HC said Ranbaxy’s generic version does not infringe on BMS’ patent for Entecavir. According to Justice Sunil Gaur, BMS’ patent for Baraclude is prima facie ‘vulnerable’ particularly as it is a new dosage of a known compound.

ROCHE vs. CIPLA

Roche sued Cipla before Delhi High Court claiming that Cipla’s generic product Erlocip violates former’s Indian Patent IN196774 claiming “Erlotinib Hydrocloride”. The trial Judge held against Roche on the ground of “public interest”, rejecting Roche’s appeal to grant interim injunction restraining Cipla from selling generic version of Tarcev as Cipla’s drug costs about 1/3rd of Roche’s patented drug. Cipla argued that Tarceva corresponds to Polymorphic Form B of active ingredient Erlotinib Hydrocloride (claimed in ‘774 patent) and  it is Form B which is more stable and suitable for solid oral dosage form than the compound disclosed in ‘774 patent comprising a mixture of Forms A and B.

ROCHE vs.  RANBAXY  and othrs.

In April 2010 Roche lost its patent right over its antiretroviral drug-Valgancyclovir Hydrochloride,post grant opposition by Ranbaxy and othrs. Valcyte is L-valine ester prodrug of known anti-viral drug “Gancyclvoir”.

*Marketwatch Inc dow jones online network (June 21,2006)

The patent was rejected primarily on grounds of lack of inventive step over US patent US 4957924 which claims L- valine ester prodrug of structurally similar nucleoside analogue and an anti-viral drug “Acyclovir” with improved oral bioavailability and is marketed as a hydrochloride (HCl) salt of said L-valine ester as Valacyclvoir Hydrochloride. It was argued that a person skilled in the art would be motivated to follow the same route to improve the oral bioavailability of Gancyclovir by forming its L-Valine ester prodrug and forming HCl salt of said ester with reasonable expectation of success. As regarding Section 3d here, it was held that increase in oral bioavailability is not an increase in therapeutic efficacy as both prodrug and the original drug are same classes of anti viral drugs and achieve the same therapeutically.

CONCLUSION:

Indian Generic drug industry supplies life saving drugs to the poor countries and other developing nations. It is a boon for people who are fighting with diseases like HIV/AID, diabetes, cancer and cannot afford to pay high prices for them.

Generic versions of  branded drugs are boon for them. In spite of various challenges to the generic pharmaceutical sector, it continues to shine.

Indian law on patents have been interpreted by Indian Judiciary in keeping the interest of  poor  and needy in mind. It has made sure that the economic and social aspect of the law is protected and  the western big pharmaceutical are not allowed to play monopoly here.

                                                                                                                        Written By:

                                                                                                                   PRAGATI ANEJA

                                                                                                                  Law Student 2nd year