Biologics, patents and drug prices 

Biologics, patents and drug prices 

Context:

• The global sales of the world’s best-selling prescription drug, Humira, continue to grow even after the expiry of the patent over its main ingredient, Adalimumab, a biologic used for the treatment of arthritis.

Background:

• By 2020, AbbVie Inc, makers of Humira, expects its sales to touch $21 billion — a figure that will surpass India’s pharmaceutical exports for that year.
• In 2015 faced with imminent expiry of the patent for Humira’s main ingredient, AbbVi reassured investors that  “Broad U.S. Humira Patent Estate” a list of 75 secondary patents in the U.S. for new indications, new methods of treatment, new formulations, and the like  would take care of the problem.

The issue:

• Patents offer their owners market exclusivity for a limited period of time.
• For medicines, this exclusivity should last as long as the primary patent which relates to the active pharmaceutical ingredient (API) of the medicine which is in effect, typically 20 years.
• The end of patent exclusivity is referred to as a patent cliff, because drug prices fall steeply afterwards — by as much as 80% owing to generic competition.
• But the threat of this fall in profits drives pharmaceutical companies to find new ways to postpone their exclusivity by filing secondary patents for derivatives and variants of the API.
• The secondary patents prop up before the expiry of a primary patent thereby stretching the exclusivity beyond 20 years, a practice that is called “evergreening”.

Secondary patents:

• The Humira patent estate now comprises secondary patents.
• Over the years, AbbVie has increased the price of Humira in the U.S. by 100%, while steadily filing a large number of secondary patents.
• India, however, does not, which means that while Humira costs $1,300 (Rs. 85,000) in the U.S., the same treatment costs only $200 (Rs. 13,500) in India,
• The rejection of a secondary patent for Novartis’ Glivec, a crucial leukaemia cure, was famously upheld by the Supreme Court of India in 2013, while the same was granted in the U.S.
• Consequently, the cost of a monthly dose of the medicine in the U.S. was Rs. 1.6 lakh, while the cost of the generic was Rs. 11,100 in India.

Good patent law:

• Study sheds new light on how Indian patent law helps thwart evergreening practices by pharmaceutical companies.
• Secondary patents for several blockbuster medicines have been rejected by the IPO dramatically expanding access to medicines for important health problems such as cancer, AIDS, asthma and cardiovascular diseases.
• None of this would have been possible without some remarkable innovations in Indian patent law.

Provisions:

• As per Section 2(1)(ja) of the Patents Act, the product in question must feature a technical advance over what came before that’s not obvious to a skilled person.
• Because secondary patents for pharmaceuticals are often sought for trivial variants, they typically fail to qualify as an invention.
• Further, when a medicine is merely a variant of a known substance, Section 3(d) necessitates a demonstration of improvement in its therapeutic efficacy.
• The provision also bars patents for new uses and new properties of known substances.
• This additional requirement is unique to Indian law, and along with Section 2(1)(ja), ensures that bad patents stay out of the system.
• Section 3(e) ensures that patents for combinations of known substances are allowed only if there is synergistic effect, while Section 3(i) ensures that no exclusivity can be claimed over methods of treatment.
• Together, Sections 3(d), 3(e) and 3(i) have been instrumental in rejecting close to 1,000 secondary patents for pharmaceuticals we studied.

Biologics:

• These provisions also extend to biologics, the new big players in the therapeutics marketplace.
• Thanks to the provisions in the patent law, Humira enjoys no patent protection in India, since AbbVie restricted their Indian filings to only cover their secondary patents.