Newspaper: The Economic Times
Section: Policy
Date: 13th May’08
Page no.: 17

Patent linkage to drug regulation will enhance R&D efficiency

Krishna Sarma

The recent (April 25) announcement by the Drug Controller General of India (DCGI) that his office has decided to provide patent linkage to reassure the industry that patents are being honoured in India, has stirred a hornet’s nest. While the research-based industry has welcomed the move, the domestic industry launched a spirited criticism.

So what is it about patent linkage, which has provoked such extreme reactions? Would it be such a terrible idea to provide transparency and predictability of the process for both the pioneer and the generic company? Would providing linkage really hinder access as the critics predict?

Now for some answers. Patent linkage is the practice of linking market approval for generic medicines to the patent status of the originator reference product. If a patent exists, marketing approval is not granted to a generic until the patent has expired or is otherwise found to be invalid. Further, such linkage is available if the patent claims covers the product.

Hitherto the DCGI has been issuing marketing approvals authorising products to be marketed in India without checking that such a product may violate a rightfully granted patent. Prior to 2005 when India did not provide product patent protection to drug products, there was little need. However, after 2005 the situation is different. Drug patents are being granted and might I add, after an elaborate Patent Office examination and prosecution process including provision for intervention by a third party through a pre-grant opposition.

Under the current regulatory regime, the originator/innovator company who is the patent holder (or has a patent issued subsequently) is at distinct disadvantage as it may not necessarily be the first one to obtain a marketing approval in India and even if it is indeed the first one, second and subsequent applicants can obtain marketing approvals based on proving bioequivalence. This is because the DCGI approves a new drug which has been in use in another country and the applicant is required to do a small Phase III confirmatory study. The regulatory hurdles for a company seeking to export a patent protected product are still lower – a No Objection certificate from the DCGI and a manufacturing license from the state drug regulator would suffice. The low regulatory hurdle coupled with an indifferent patent enforcement regime encourages generic encroachment.

Several countries require the applicant for product registration to check a box declaring that its product does not infringe third parties’ rights. Patent linkages have long been established in the US and Canada. China adopted this cost-effective, selfdeclaration approach when its pharmaceutical laws and regulations were reformed. Singapore has established linkage under the US-Singapore Free Trade Agreement. The EU does not have patent linkage, however it provides effective and meaningful regulatory data protection of up to 11 years.

The genesis of patent linkage was in the US. While the Hatch Waxman Act, 1984 enabled early generics entry in the US market, it also incorporated an important mechanism designed to guard against infringement of patents relating to pioneer drugs. A New Drug Application (NDA) was required to include patent information like the product name, patent number, patent expiry date and exclusivity information. The FDA relies on innovator drug company’s assertion and such patent information is published in the Orange Book which lists Approved Drugs and provides Patent and Exclusivity Information. Most importantly, the Orange Book provides generic drug companies an opportunity to inform FDA that it does not believe a particular listed patent does cover the product and further under Para IV, an assertion that the patent is not infringed or is invalid.

As we see from the preceding paragraph, Patent Linkage can not only promote effective and adequate patent protection but also allows generic drug companies to review patent information to determine when a patent expires and what the patent covers. The system reduces wasteful and unnecessary patent infringement litigation by (1) requiring generic drug companies to assess whether their drug product is subject to a patent prior to seeking drug approval; and (2) acting as a safeguard for patent rights by preventing potential patent violations. An adequate linkage system also increases the efficiency and productivity of the research and development sector. Better and more efficient investment decisions mean faster development for lifesaving inventions and better healthcare.

Having taken a positive step of providing for product patent protection for pharmaceuticals in 2005, it would be in good spirit to provide measures to safeguard pharmaceutical patent rights. The requirements under the Drug and Cosmetics Rules 1945, particularly Appendix I and II of Schedule Y have to be amended to provide for notification by the originator and spelling out the circumstances under which generic entry is possible. The DCGI’s statement that the government would be preparing guidelines to protect patented products by not allowing marketing approvals to generic copies is a welcome step forward.

The author is managing partner of Corporate Law Group, a Delhi-based law firm. Views expressed are personal.