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Denouncing Trade Agreements Validating Pharmaceutical Developers’ Term Extensions

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Free Trade Agreements

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Abstract

Free Trade agreements have had extraordinary effects on the production and use of pharmaceuticals in India. Following the Word Trade Organisation’s Agreement on Trade Related Aspects of Intellectual Property, there has been a plethora of attempts at the level of international trade negotiations to extend the rights of pharmaceutical companies over medicinal compounds. This chapter explores this area’s developments showing how it has been a detrimental development for countries such as India.

This book chapter is a revised version of the presentation ‘Innovation Models in the Pharmaceutical Industry’ at the Second Asia-Pacific Workshop on Innovation, IP and Competition at National Law University, New Delhi, INDIA on February 07, 2018 that was later expanded and developed into a working paper entitled ‘Patent Linkage within TRIPS: A Purposive Interpretation’ presented at PatCon 8: The Annual Patent Conference held at University of San Diego School of Law, USA on March 02, 2018.

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Notes

  1. 1.

    See Colin Terry and Neil Lesser, “A new future for R&D? Measuring the return from Pharmaceutical Innovation 2017” (Deloitte with GlobalData) online: https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/life-sciences-health-care/deloitte-uk-measuring-roi-pharma.pdf. Accessed on 1 August 2018.

  2. 2.

    See Frost and Sullivan, “Generic Pharmaceuticals Market—A Global Analysis” (December 23, 2011) online: https://www.frost.com/sublib/display-report.do?id=M74E-01-00-00-00 (Ripe for Growth and Opportunities: Several Key Blockbuster Drugs to go off-patent by 2014). Accessed on 1 August 2018—the Frost & Sullivan Report, 2011 states notable increase in off-patent drugs between 2000–17.

  3. 3.

    Biosimilars are antibody copy of biologics. They were first approved in Europe in 2013 for InflectraTM (Hospira), the bio-similar of Johnson & Johnson’s Remicade (infliximab) for treating inflammatory diseases such as psoriasis and rheumatoid arthritis.

  4. 4.

    See for example, Lipitor and Crestor by companies such as Teva, Mylan and Sandoz.

  5. 5.

    For Humira patent working documents, see, US Securities and Exchange Commission, Annual Report of Abbvie Inc (Form 10-K) https://www.sec.gov/Archives/edgar/data/1551152/000104746913002827/a2213529z10-k.htm. Accessed on 1 August 2018.

  6. 6.

    GlobalData (January, 2017) PharmaPoint: Ulcerative Colitis—Global Drug Forecast and Market Analysis to 2025. GDHC142PIDR, https://www.globaldata.com/store/report/gdhc160pidr--pharmapoint-crohns-disease-global-drug-forecast-and-market-analysis-to-2026/. Accessed on 1 August 2018.

  7. 7.

    35 U.S.C § 101.

  8. 8.

    See, Feroz Ali, Sudarsan Rajagopal, Venkata S Raman and Roshan John, “Pharmaceutical patent grants in India” (April 2018) online: https://www.accessibsa.org/media/2018/04/Pharmaceutical-Patent-Grants-in-India.pdf. Accessed on 1 August 2018 [Ali et al. 2018]. Also see especially, Bhaven Sampat and KC Shadlen (2018) Indian Pharmaceutical Patent Prosecution: The changing role of section 3(d). PLoS ONE 13(4): e0194714. online: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0194714. Accessed on 1 August 2018.

  9. 9.

    See (Ali et al. 2018) supra note 8. For provisions, see Indian Patent Act, 1970 (as amended), Section 2(1)(ja); Sections 3(d), (e) and (i).

  10. 10.

    See Ali Feroz and Rajagopal Sudarsan, (8 February 2018) Biologics, patents and drug prices. The HINDU.

  11. 11.

    Novartis AG v. Union of India (UOI) and Ors.; Natco Pharma Ltd. v. UoI & Ors.; M/S Cancer Patients Aid Association v. UoI & Ors. CIVIL APPEAL Nos. 2706-2716 OF 2013 (ARISING OUT OF SLP(C) Nos. 20539-20549 OF 2009).

  12. 12.

    See also, Ali and Rajagopal, supra note 10—While the cost of a monthly dose of the medicine (Glivec) in the U.S. was ₹1.6 lakh, while the cost of the generic was ₹11,100 in India. Likewise, Spiriva, a medicine for asthma, enjoys patent protection until 2021 in the U.S., largely due to secondary patents. All of these secondary patents were rejected in India. As a result, while the monthly cost of the medicine in the U.S. is over ₹19,100, it costs a mere ₹250 in India.

  13. 13.

    See for example, In US, the concept of patent linkage has been statutorily provided for under the Drug Price Competition and Patent Restoration Act, 1984 (a major amendment of the Federal Food, Drug and Cosmetic Act) informally known as the Hatch-Waxman Act 1984. Linkage in US is applied though the publication of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. The FDA cannot approve a second application in case there is a patent listed in the Orange Book for the pioneer drug on which the second application relies on. Therefore, when a second applicant submits an ANDA (Abbreviated New Drug Application (application for a typical generic drug) [filed under Section 355 of the US Code Title 21, Chapter 9, sub chapter 5] or a section 505(b)(2) application, it must include appropriate certifications that they have permission to use all of the patents listed in the Orange Book with respect to the drug which serves as the basis for their petition (US Code Title 21, Chapter 9, Subchapter 5, Section 355 (b)(2)(A) [3] and Section 355 (j)(2)(A)(vii) [4] provide that the applicants have four certification options). Also see, specific provision that requires generic be given regulatory approvals only after the expiry of patent exclusivity -- 21 U.S.C.§ 355(j)(5)(F)(ii) of the American Food and Drug Law and Section C.08.004.1(3)(a) of the amended Canadian Food and Drug Regulations.

  14. 14.

    India accounts for 40% of generic drugs in the drugs in the United States; see India Brand Equity Foundation “Indian Pharmaceutical Industries” June 2018, https://www.ibef.org/industry/pharmaceutical-india.aspx. Accessed on 1 August 2018.

  15. 15.

    See for example, Article 1711 NAFTA, paragraphs 5 and 6; See also, Shaffer Ellen and Brenner Joseph. (2009) A Trade Agreement’s Impact On Access To Generic Drugs. Health Affairs. 28(5): w957.

  16. 16.

    See generally, Skillington G. Lee and Solovy Eric M. (2003) The Protection of Test and Other Data Required by Article 39.3 of the TRIPS Agreement. Nw. J. Int’l L. & Bus. 24(1): 1, 12-5.

  17. 17.

    See, Oxfam International. (March, 2007) All costs, no benefits: How TRIPS-plus intellectual property rules in the US-Jordan FTA affect access to medicine. Oxfam Briefing Paper. https://oxfamilibrary.openrepository.com/bitstream/handle/10546/114080/bp102-all-costs-no-benefits-trips-210307-en.pdf;jsessionid=089750820CF675173F0C3204C369D63F?sequence=1. Accessed on 1 August 2018.

  18. 18.

    Indian Patent Act, 1970 (as amended), Section 3(d).

  19. 19.

    Natco Pharmaceutical v. Bayer Corporation [(2012) 50 PTC 244].

  20. 20.

    Shamnad Basheer v. Union of India, W.P.(C) 5590/2015 [pending for disposal].

  21. 21.

    USTR Releases 2018 Special 301 Report on Intellectual Property Rights (April 2018) https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/april/ustr-releases-2018-special-301-report. Accessed on 1 August 2018; See also, Jamie Feldman (2009) Compulsory licenses: The dangers behind the current practice, J. Int’l Bus & Law, 8(1): 137–167.

  22. 22.

    Ibid.

  23. 23.

    Leonardo Palumbo, (27 April 2018) Doctors Without Borders’ Access Campaign, “MSF: USTR Special 301 Report Calls Out Countries For Protecting Public Health” https://www.doctorswithoutborders.org/what-we-do/news-stories/news/msf-ustr-special-301-report-calls-out-countries-protecting-public. Accessed on 1 August 2018.

  24. 24.

    Hettinger Edwin C. (1989) Justifying Intellectual Property. Phil & Pub Aff. 18(1): 31.

  25. 25.

    See generally, Spinello Richard A. (2009) A Defense of Intellectual Property Rights, 167. Also see, Machlup Fritz (1958) An Economic Review of the Patent System Study No. 15, Study of the Subcommittee on Patents, Trademarks and Copyrights of the Committee on the Judiciary, United States Senate, 85th Congress, 2nd Session 20.

  26. 26.

    Posner Richard A, (1979) Utilitarianism, Economics and Legal Theory. J. Legal Stud. 8:103.

  27. 27.

    Ibid.

  28. 28.

    Correa Carlos M. (2007) Trade Related Aspects of Intellectual Property Rights: A Commentary on the TRIPS Agreement 374; Gervais Daniel, The TRIPS Agreement: Drafting History and Analysis 424 (3rd ed. 2008); UNCTAD-ICTSD (2005) Resource Book on TRIPS and Development 522.

  29. 29.

    See, Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, as last revised July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305 at art. 10 [hereinafter “Paris Convention”].Misappropriation is a basic norm in the field of Unfair competition. Article 10 bis (2) of the Paris Convention. However, the focus of discussion in this section of the paper is the presence or absence of test data exclusivity mandate. For a historical reference, see Carlos. M. Correa, Unfair Competition under the TRIPS Agreement: Protection of Data Submitted for the Registration of Pharmaceuticals, 3 Chi J. Intl L 69.

  30. 30.

    EU revised its laws and now grants absolute data exclusivity for 8 years. China, Canada and Singapore have drug regulation laws with data exclusivity standards similar to that in the US.

  31. 31.

    See judicial reasoning in Bayer v Canada [1999] 1 FC 553-582, affirmed 87 CPR (3d) 293.

  32. 32.

    Countries with strong R&D pharmaceutical industry (US-EU-Swiss) require regulatory authorities or third parties to insist on Originator Company’s consent for subsequent test data use during specified period of exclusivity. See, International Federation of Pharmaceutical Manufacturers Associations, Encouragement of New Clinical Drug Development: The Role of Data Exclusivity, 1 (2000) http://www.who.int/intellectualproperty/topics/ip/en/DataExclusivity_2000.pdf. Accessed on 1 August 2018.

  33. 33.

    See generally, Ragavan Srividhya and Joshi Moushami, (27 December 2016) Backdoor Patents Could Hurt Patents. BUSINESS LINE.

  34. 34.

    Nemlekar Aparna, Stakleff Nicole and Miller Raymond, (9 July 2016) FDA is Evolving on Qualifications of New Chemical Entities https://www.pepperlaw.com/publications/fda-is-evolving-on-qualifications-for-new-chemical-entity-2016-09-07/. Accessed on 1 August 2018.

  35. 35.

    Association of Molecular Pathology v Myriad Genetics, 569 U.S. _, 133 S. Ct. 2107, 2116, 106 USPQ2d 1972 (2013).

  36. 36.

    Section 122E of the Drug and Cosmetics Act, 1940 (as amended in 1995).

  37. 37.

    Basheer Shamnad (2006) Protection of Regulatory Data Under Article 39.3 of TRIPS: The Indian Context. Intellectual Property Institute.

  38. 38.

    Correa Carlos M. (2006) Protecting Test Data for Pharmaceutical and Agrochemical Products under Free Trade Agreements. In: Roffe Pedro et al. (eds) Negotiating Health: Intellectual Property and Access to Medicines, 81: 91-3; Dinca Razvan (2005) The “Bermuda Triangle” of Pharmaceutical Law: Is Data Protection a Lost Ship? J. of World Intell. Prop 517, 542; Clift Charles (2007) Data Protection and Data Exclusivity in Pharmaceuticals and Agrochemicals. In: Krattiger Anatole et al. (eds) Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices 431, 433.

  39. 39.

    See generally, Baker Brook K (2008) Ending Drug Registration Apartheid: Taming Data Exclusivity and Patent/Registration Linkage Am. J. L. & Med. 34:303; Roffe Pedro and Spennemann Christoph (2010) Canada—patent protection of pharmaceutical products. In: Research Handbook on the Interpretation and Enforcement of Intellectual Property Under WTO Rules: Intellectual Property in the WTO—Vol II, 237, 274-5.

  40. 40.

    As per the rules of treaty interpretation prescribed under Article 32 of the Vienna Convention on the Law of Treaties (VCLT), it is confirmed that test data exclusivity is not the minimum obligation in respect of ‘protection against unfair commercial use’ in Article 39(3) of TRIPS. Analysis of Article 31 of VCLT further confirms that in order to meet this obligation, protection against action of Approval authority has to be expressly provided as unfair commercial use, which is not the case. The historical reference to Article 39(3) highlights that the common intention of the negotiating parties at the time of drafting the provision was that protection against indirect use is not an obligation. In fact, such protection was negotiated out of the final TRIPS Agreement.

  41. 41.

    CS (OS) No. 2680/2008, Dec. 19, 2008.

  42. 42.

    2009 (41) PTC 634 (Del).

  43. 43.

    WP(C) No 7833/2008 Bayer Corporation v Union of India (Supreme Court of India).

  44. 44.

    Section 2 DCA.

  45. 45.

    Section 48 of the Patent Act.

  46. 46.

    Section 156 of the Patent Act.

  47. 47.

    Bayer relied on Hoechst Pharmaceuticals v. CVS Mani (ILR 1983 Delhi 548) wherein Section 2 DCA and the DCR were interpreted as requiring the DCGI to adhere to the requirements of the Trade and Merchandise Marks Act 1958.

  48. 48.

    See, BioWorld, “Biosimilars: A Global Perspective of a New Market” Opportunities, Threats and Critical Strategies 2014, [Thomson Reuters] http://ip-science.interest.thomsonreuters.com/biosimilars-report-2014. Accessed on 1 August 2018.

  49. 49.

    CS (OS) 355/2014.

  50. 50.

    Interim order in FAO(OS)132/2016&CM15464/2016 &15466/2016 http://delhihighcourt.nic.in/dhcqrydisp_o.asp?pn=50677&yr=2017. Accessed on 1 August 2018.

  51. 51.

    CCI Order in Case No. 68 of 2016.

  52. 52.

    Govt of India (24 January 2018) The National IPR Policy 2016 scheme of IPR awareness -- “Creative India; Innovative India”.

  53. 53.

    The CPTPP includes 30 chapters ranging from issues of national treatment and market access, technical barriers to trade, sanitary and phytosanitary measures, rules of origin, customs administration and trade facilitation, investment, and it further includes government procurement, competition policy, intellectual property, labour and environment issues. The negotiating parties include: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The USA withdrew its participation from the erstwhile Trans-Pacific Partnership Agreement in 2017. See, The Office of the US Trade Representative (USTR) letter of withdrawal to the Trans-Pacific Partnership Depository (January 30, 2017) https://ustr.gov/sites/default/files/files/Press/Releases/1-30-17%20USTR%20Letter%20to%20TPP%20Depositary.pdf. Accessed on 1 August 2018.

  54. 54.

    CPTPP, Ch 9 on INVESTMENT, https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Text/9.-Investment-Chapter.pdf. Accessed on 1 August 2018.

  55. 55.

    Tripathy Sunita (2017) The right to health: Reviewing the trans-pacific partnership agreement from the lens of intellectual property rights. In: Adinolfi. G, Baetens. F, Caiado. J, Lupone. A and Micara. A (eds.) International Economic Laws—Contemporary Issues. Springer.

  56. 56.

    See for example, episodes of seisure and detention of generic versions of the antibiotic Amoxicillin by the German custom officials due to the confusion over the use of INN in the year 2009. See for reference, Dounis Catherine (2011) Enforcing Intellectual Property Rights via EU Border Regulations: Inhibiting Access to Medicine or Preventing Counterfeit Medicine? Brook. J.Int’l L. 36:717.

  57. 57.

    CPTPP Ch 18 on INTELLECTUAL PROPERTY, Section F, Subsection C, Articles 18.48 to 18.54—Measures relating to Pharmaceutical Products,” Patents and Undisclosed Test or Other Data at 18–25, https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Text/18.-Intellectual-Property-Chapter.pdf. Accessed on 1 August 2018; See also, CPTPP, Ch. 26 on Transparency and Anti-corruption that allows pharmaceutical companies the mandate to intercede procedures related to reimbursement listings for pharmaceutical products and medical devices, https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Text/26.-Transparency-and-Anti-Corruption-Chapter.pdf. Accessed on 1 August 2018.

  58. 58.

    For patent linkage within TPP, see Tripathy, supra note 55 .

  59. 59.

    Gopakumar KM (2010) Landscape of Pharmaceutical Patent Applications in India: Implications for access to medicines. In: Chaudhari et al., Five years into the product patent regime: India’s response. New York: UNDP. http://apps.who.int/medicinedocs/documents/s17761en/s17761en.pdf. Accessed on 1 August 2018.

  60. 60.

    See, WHO SEARO (2009) International Trade and Health: A Reference Guide, Delhi: World Health Organisation, Regional Office for South-East Asia, http://www.searo.who.int/entity/intellectual_property/ITH.pdf.Accessed on 1 August 2018 

Acknowledgements

Tripathy is thankful for the discussions with Prof. Srividhya Ragavan of Texas A&M School of Law, USA and Prof. Mark Perry of School of Law, University of New England, Australia on the subject matter.

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  1. Jindal Global Law School (JGLS), O. P. Jindal Global University in Haryana, Sonipat, India

    Sunita Tripathy

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  1. University of New England, Armidale, NSW, Australia

    Lillian Corbin

  2. University of New England, Armidale, NSW, Australia

    Mark Perry

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Tripathy, S. (2019). Denouncing Trade Agreements Validating Pharmaceutical Developers’ Term Extensions. In: Corbin, L., Perry, M. (eds) Free Trade Agreements. Springer, Singapore. https://doi.org/10.1007/978-981-13-3038-4_8

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