India has begun a new era of patent law

Years of expectation and apprehension finally ended on 1 January as India began a new era of drug discovery.

The Trade Related Intellectual Property (TRIPS) agreement of the World Trade Organization, signed by India in 1995, mandates that the country adopts a product patent regime for food and medicines by the beginning of this year.

With only process patents available for pharmaceuticals since 1970, India blossomed into a US $5-billion drug industry by using reverse engineering to make and sell generic copies of branded drugs. In 2003, more than 60,000 generic brands in 60 therapeutic areas were available in India.

The TRIPS agreement not only allows multinational drug companies to launch new products and manufacture them exclusively in India, but it also allows them to put pressure on Indian companies to withdraw generic forms of branded drugs.

In response, many generics companies, such as Ranbaxy and Dr Reddy's, are already using their experience in chemistry and manufacturing, combined with low costs, to seek alternative revenue streams, including creating novel drugs, strategic marketing alliances and expanding manufacturing capacities.

“As we see it, any company, whether bulk drug producer or formulator, with a research focus and intellectual property awareness will thrive,” says a spokesperson for Ranbaxy.

But if multinational companies think that this marks the end of a system that led to every major blockbuster drug being developed into at least 10 generic brands in India, they should think again.

First, the TRIPS agreement only applies to products invented after 1 January 1995. “This covers only around 5% of the branded drugs that are currently sold here,” says Amar Lulla, joint managing director of Cipla. For example, Cipla can continue selling its version of the HIV drug AZT.

A stronger patent regime will bring in opportunities in every area. It will be entirely up to us to grab the opportunities and prosper or behave like ostriches. Spokesperson for Banbaxy

Second, the estimated 12,000 mailbox applications that were filed for product patents are only being opened and examined from 1 January. Generics manufacturers can freely manufacture their drugs while mailbox applications lie unprocessed.

Whether the Indian Patent Office has the capabilities to deal with this backlog quickly is open to question. The national patent offices housed only 46 examiners before 1 January. Now, 250 examiners have been recruited to handle the increased workload, with a further 50 to be recruited this year.

The Indian government has estimated that it will take up to 30 months to process these applications, and it could take a couple for years to award patents.

“Enforcement remains a major concern, and we will be cautious about launching major innovations in India, until the environment is more secure,” says Steve Brown, spokesperson for AstraZeneca, which has already set up a research centre in Bangalore that focuses on tuberculosis research.

One bone of contention for Indian companies is that the definition of patentability is unclear. The new law has introduced the term 'mere new use' rather than just 'new use' for a drug. This, say Indian companies, does not clarify whether variations that extend the patent life of a drug will not be patentable.

Indian companies would like the scope of patentability to be restricted to new chemical entities, and fear that the new laws will result in a series of litigations.

But this shouldn't discourage domestic companies says a spokesperson for Ranbaxy. “A stronger patent regime will bring in opportunities in every area. It will be entirely up to us to grab the opportunities and prosper or behave like ostriches.”