It's not all doom and gloom for pharmaceutical innovators in India

Merck has become the latest foreign pharmaceutical innovator to notch a patent win in an Indian court. Last Friday, the country’s Supreme Court enjoined Glenmark Generics from selling new low-cost versions of diabetes drugs Januvia and Janumet (though it can keep selling its existing inventory). The decision follows a flap over the release of the United States Trade Representative’s Special 301 Report , which prompted pushback with its criticism of pharmaceutical patent protection in India.

But one thing lost amidst the back-and-forth is that pharmaceutical innovator companies have enjoyed a string of recent successes in the high courts – one of which has now been reinforced (for now, at least) by the highest court in the land.

The USTR report, which one detractor labelled the US government’s “annual swat at India”, laid out – again – several well-known concerns about the Indian IP regime. For example, Section 3(d) of the Patents Act, denies invention status to “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”, a measure critics say falls foul of TRIPS requirements by raising the bar for patentability for pharmaceuticals.  Then there is the issue of compulsory licences, though the report notes that India has only issued one of these under Section 84 of the Patents Act.

India’s commerce minister, Nirmala Sitharaman, dismissed the report, saying its criticisms went beyond the scope of the TRIPS agreement. She described the whole exercise as “an extraterritorial application of the domestic law of a country […] inconsistent with the established norms of the WTO”. At the other extreme, Republican Senator Orrin Hatch lashed out at the Obama administration, calling the report “a major step back” that “fails to fully recognize the seriousness of India’s harmful IP policies”.

While the bluster and recriminations go on in Washington DC and Delhi, though, companies are testing the limits of the laws on a daily basis before examiners and judges. And some of the results of late have been very encouraging for originator companies. While the report cites the difficulty of “securing injunctions against firms that manufacture patented inventions without authorization from the patent holder”, Swiss originator Novartis has managed to do just that several times over the past year.

Since April 2014, the company has been granted injunctions by the Delhi High Court against generics makers including Bajaj Healthcare and Alembic Pharmaceuticals, Ranbaxy Laboratories and, most recently, CIPLA. The orders, which, significantly, were granted on an ex parte basis in the Bajaj and Alembic cases, enjoined the Indian companies from manufacturing and selling various drugs to which Novartis holds patents in India. The Swiss company secured undertakings to a similar effect from Glenmark Generics and Cadila Healthcare during the same time period.

Novartis India offered its own reaction to the USTR report. Vice chairman and managing director Ranjit Shahani said in a statement: “While we commend the progress India has made in advancing IPRs and the positive steps taken toward complying with the TRIPS Agreement, more needs to be done to align this increasingly important industrial country with international standards.” Shahani specifically cited patentability standards, lack of data protection and local working requirements as undermining the research-based pharmaceutical industry.

The important thing to note here is that the companies that are the most vocal critics of the Indian system are also some of its most active litigants and filers. And they may be having more success than they let on. This underlines that fact that Western businesses that neglect the Indian market due to a perceived lack of IP protection – or any other reason – do so at their own risk.

The Novartis orders are part of a broader trend that has seen the Delhi High Court take an activist stance, most notably handing injunctions to Ericsson in SEP disputes with the likes of Micromax, Intex and Xiaomi. While the SEP cases have been much remarked upon in these pages and elsewhere, the pharmaceutical injunctions have flown comparatively under the radar in the international press. At least that is the view of Senior Advocate Prathiba Singh, who has represented both originators and generics companies. “I think there’s a lot of media bashing of India which is mostly unjustified”, she told IAM. “In the past two years there have been 15-20 injunctions across the country on big molecules, which have been contested very hotly. But I didn’t see any major media coverage of the rulings in favour of innovators.” We shall see if the Merck case proves any different.