India Remains Generics Paradise as Patent Filings Drop by 29% in 2009; Patent Linkages Proposal Squashed Again

Indian Firms' International Patent Filings Drop

Data released by the World Intellectual Property Organization (WIPO) have revealed that there has been a sharp drop in the number of international patent filings originating from India in 2009, with a 29% year-on-year (y/y) decline, reports iGovernment.in. Last year's patent filings stood at 761, as against 1,070 in 2008, and 901 in 2007. While this includes all industries, the pharma and medical technologies sector was one of the leading sectors responsible for the drop in filings. While the economic downturn in general has seen a 4.5% y/y drop in international patent filings worldwide in 2009, India is one of the most significantly affected countries. The United States, Germany, Sweden, Canada, and Israel have also contributed to this drop. However, the number of filings originating from China has increased by 29.7% on a y/y basis over 2009.

Delhi Patent Office Refuses to Accept Patent Litigations Directly

Separately, the Delhi High Court has announced that it will no longer accept patent litigation cases that have not first been reviewed by the Intellectual Property Appellate Board (IPAB), reports BusinessStandard.com. According to Justice S Muralidhar, firms will henceforth be required to approach the latter to challenge the decisions of the national patent office. As part of this decision, six petitions involving proprietors Eli Lilly (U.S.), UCB (Belgium), generic giant Teva (Israel)'s research arm, Yeda, and challengers such as Ranbaxy and Cipla (both India), have been rejected; the firms have been asked to file appeals with the IPAB within two weeks.

Patent Linkages Proposal Squashed Again

The Delhi High Court has also ruled against Bayer AG (Germany) and denied patent on its oncology drug Nexavar (sorafenib), reports the Economic Times. The ruling also squashes the firm's attempts to bring about a patent-linkages system in India—under which the patent office would not be allowed to authorise marketing approval for generic versions of patented drugs. Nexavar currently sells at 285,000 rupees (US$6,137) for a monthly dose of 120 tablets, the source added.

Outlook and Implications

The drop in international filings from Indian pharma firms underpins the reduced monies available for firms to engage in research and development (R&D). The economic downturn has served to increase the need for cost-competitive generics worldwide, with generics firms forced to increasingly offer their products at lower prices to survive. A key example of this is Germany's largest health insurer AOK's drug tender, which has increasingly been focused on cost-competitive generics to ensure health bill savings. Meanwhile, countries such as Croatia and Turkey have modified their international reference pricing to increase the affordability of generics countrywide in the midst of the recession. Reduced investment in R&D has been exacerbated by the volatility of the foreign-exchange market, leading to losses for several domestic drug firms on account of foreign currency convertible bonds (FCCB) and mark-to-market losses.

Meanwhile, the Delhi High Court's ruling has put a stop to pharma firms avoiding the IPAB for patent and pre- and post-patent grant consideration. This will mean that the IPAB will decide three pending petitions filed by: Eli Lilly against Ranbaxy and Ajantha Pharma (India) for the process, preparation, and use of tetracycline derivatives; Teva's appeal on Copaxone (glatiramer acetate)'s patent rejection on basis of pre-grant opposition by Natco Pharma (India); and UCB Farchim's petition against Cipla (India) for rejection on patents for the former's anti-allergic drug now be decided by the IPAB.

The Delhi High Court ruling against Bayer is also no surprise given a similar verdict passed by a bench of the same court, with the court even directing the Indian drug regular to grant marketing authorisation to Cipla's generic version of the drug. Bayer has hinted it will appeal the decision in the Supreme Court, while Cipla has revealed that it will launch its product within the next two months. Meanwhile, patent linkages have once again been squashed to provide access to affordable and new drugs, revealing that India will continue to be a generic paradise in spite of changes to its patent regimen.

Related Articles

• India: 7 September 2009: Indian Drug Regulator Directed to Offer Cipla Licence for Generic Nexavar
• India: 19 August 2009: Indian Court Rejects Bayer's Attempts to Block Generic Nexavar Sale
• India:10 July 2008: Indian Drug Regulator Withdraws Patent Linkage Proposal; Patent Filings Drop 41% in FY 2007/08