INDIA BUSINESS WORLD - APRIL - MAY 2007
The Month that was ...

EASIER FOR INDIAN GENERIC PHARMA COS TO CHALLENGE PATENTS IN US

INDIAN generic pharma companies may now find it easier to challenge patents in the US. In a new twist in the battle between innovators and generic companies, the US Supreme Court has written new rules that will make it harder to obtain and defend patents in the US. Ruling unanimously in a case that could affect billion of dollars worth of US patents, the court has set a higher threshold for obtaining patent protection and sent a clear signal that it feels excessive patent rights are stifling innovation in the US.

This could represent a significant opportunity for Indian generic companies, which are adopting increasingly aggressive strategies in the US to capture a chunk of the rapidly growing pharma market, challenging product's patent to prepone their entrance in the market.

"This is a very positive move for the Indian pharma industry," said Dilip G Shah, secretary general, Indian Pharma Alliance (IPA). "The decision may make it harder to obtain a United States patent, and existing United States patents will be subject to an immediate enhanced threat by re-examination." In its judgement, the US Supreme court defined non-obviousness -one of the three conditions to the grant of a patent- in a more narrow and rigid way. This move will affect primarily patents for incremental innovations, new forms of existing drugs, often considered as 'weak patents', and challenged by the generic industry. It's the case of Astra Zeneca's patent on Nexium, which has been challenged by generic pharma companies, including India's Ranbaxy and Dr Reddy's Lab. Facing the loss of patent protection and competition from generic manufacturers, the UK drug giant developed a new version of its blockbuster ulcer drug, claiming enhanced efficacy over the off-patent old version of the drug. With $3.44 billion sales in the US, Nexium was the second best selling drug in 2005, after Pfizer's Lipitor.

"The US Court judgement determined the grounds for non-obviousness by assessing the predictability of the results," said Gopakumar G Nair, an industry expert on patents. In the case of Nexium, the results from adding an excipient to the old molecule, was known, argue generic companies.

If AstraZeneca's patent is invalidated by the US Court, the generic company which was the first to file a patent challenge will stand to benefit from a 180-day exclusivity period in the US market. This means a windfall of revenues. For instance, Ranbaxy Lab's generic version of Glaxo-SmithKline's antibiotic drug Ceftin, launched with exclusivity in March 2002, had garnered around $100 million in 2002, according to Ranbaxy.