India's Evolving Patent Laws and the WTO Obligations: The Rejection of Abbott Laboratories' Application for a New Kaletra Patent

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1 University of Chicago Law School Chicago Unbound Journal Articles Faculty Scholarship 2011 India's Evolving Patent Laws and the WTO Obligations: The Rejection of Abbott Laboratories' Application for a New Kaletra Patent Adam S. Chilton Follow this and additional works at: Part of the Law Commons Recommended Citation Adam S. Chilton, "India's Evolving Patent Laws and the WTO Obligations: The Rejection of Abbott Laboratories' Application for a New Kaletra Patent," 39 Journal of Law, Medicine & Ethics 296 ( This Article is brought to you for free and open access by the Faculty Scholarship at Chicago Unbound. It has been accepted for inclusion in Journal Articles by an authorized administrator of Chicago Unbound. For more information, please contact unbound@law.uchicago.edu.

2 JLME COLUMN Abroad: An Unfair Trade Policy, at 6-7 [November 6, 2003] ["Importation of pharmaceuticals only treats the symptom, not the cause - it may reduce drug prices temporarily, but it can lead to two devastating scenarios:...second, indirectly imposing pharmaceutical price controls in the United States eventually will lead to reduced spending on R&D and fewer new drugs coming into the market."]). 33. On alternative compensation schemes see, e.g., J. Love and T. Hubbard, "Prizes for Innovation of New Medicines and Vaccines," Annals of Health Law 18 (2009): ; A. Hollis and T. Pogge, The Health Impact Fund: Making New Medicines Accessible for All, Incentives for Global Health, GAVI, Innovative Finance, November 2010, at 1, available at < gavialliance.org/resources/if-brochure pdf> (last visited March 21, 2011) (hereinafter GAVI, Innovative Finance). 35. Global Fund, "Fighting AIDS, Tuberculosis and Malaria," available at < fighting/?1ang=en> (last visited March 21, 36. Global Fund, The Global Fund Announces Measures to Enhance Financial Safeguards and Strengthen Fraud Prevention, Press Release, February 4, 2011, available at < pressreleases/?pr=pr_110204>. 37. Global Fund, Global Fund Third Voluntary Replenishment , October 5, 2010, available at < NewYorkMeetingPledges-en.pdf> (last visited March 21, 38. Id. 39. GAVI, Advance Market Commitmentfor Pneumococcal Vaccines Annual Report 12 June March 2010, at 10, available at < org/files/amcannualreportlo.pdf> (last visited March 21, 2011) [hereinafter GAVI, Annual Report]. 40. GAVI, Saving Lives and Protecting Health: Results and Opportunities, May 2010, at 12, available at < Updated Results EN May2010.pdf> (last visited March 21, 2011) [hereinafter GAVI, Saving Lives]. 41. See GAVI, Annual Report, supra note 39, at See GAVI, Saving Lives, supra note 40, at 2; GAVI, Pfizer Vaccine Receives AMC Approval by Independent Assessment Committee, September 10, 2010, available at < org/updateseptlo_o.html> (last visited March 21, 2011); see also GAVI, Part I: Target Product Profile (TPP) for the Advance Market Commitment (AMC) for Pneumococcal Conjugate Vaccines, December 18, 2008, available at < Master Table.pdf> (last visited March 21, 2011) (listing criteria). 43. GAVI, Kenya Marks the Global Roll Out of Pneumococcal Vaccine against the World's Leading Cause of Child Death, February 14, 2011, available at < centre/ press-releases/kenya-pneumococcal. php> (last visited March 21, 44. M. Scudellari, "Are Advance Market Commitments for Drugs a Real Advance?" Nature Medicine 17, no. 2 (2011): 139 (noting that falling prices are built into the GAVI pneumococcal vaccine model). 45. T. Cernuschi, "Pricing of Pneumococcal Vaccines under Advance Market Commitments," The Lancet 374 (2009): P. A. Offit, "Why Are Pharmaceutical Companies Gradually Abandoning Vaccines?" Health Affairs 24, no. 3 (2005): , at J. Sonderholm, "Wild-Card Patent Extensions as a Means to Incentivize Research and Development of Antibiotics," Journal oflaw, Medicine &f Ethics 37, no. 2 (2009): ; see also J. Sonderholm, "In Defense of Priority Review Vouchers," Bioethics 23, no. 7 (2009): Anonymous author, "Will Pharma Jump Into the Patent Pool?" Pharmaceutical Representative 40, no. 11 (2010): 8; see also Medicines Patent Pool Foundation, Who We Are: Background: How the Medicines Patent Pool Came About, available at < (last visited March 21, 49. E.g., Orphan Drug Act, Pub. L. No , codified at 21 U.S.C. 360aa- 360ee (2011) (direct public funding) and 26 U.S.C. 45C (2011) (tax credits). India's Evolving Patent Laws and WTO Obligations: The Rejection of Abbott Laboratories' Application for a New Kaletra Patent Adam Chilton Introduction On December 30, 2010, India's patent office in Mumbai rejected the Chicago-based pharmaceutical company Abbott Laboratories' application for a patent on a new version of Kaletra.1 Kaletra is a second-line antiretroviral HIV/AIDS drug that is a combination of lopinavir and ritonavir, and is widely considered the best treatment for patients who are resistant to the first-line medicines. 2 After a process that took nearly four years, Abbott's patent application was rejected because the version of Kaletra under consideration was deemed not to be an "inventive step" beyond previous lopinavir/ritonavir combinations that are already under patent.3 Although this may sound like a routine patent rejection, civil society groups like Doctors Without Borders have already hailed the decision as "a major victory for public health" because of its potential to make generic drugs available in the developing world by preventing pharmaceutical companies from extending patents on products that are only improvements on existing treatments. 4 Pharmaceutical companies and intellectual property advocates have been quick to point out, however, that the decision is just the latest sign that India is not complying with its obligations under the World Trade Organization's (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agree- 296 JOURNAL OF LAW, MEDICINE & ETHICS

3 Darrow and Chilton ment.5 Under the TRIPS agreement, counties are required to, at a minimum, provide protection for products when a product contains an "inventive step," but the agreement only clarifies that the term may be considered synonymous with "nonobvious" and intentionally leaves the standard vague to allow for flexibility in domestic laws. 6 Given that ambiguity, this decision will likely spark a debate on whether India is ignoring its commitments or exercising appropriate discretion. That debate may have wide-ranging consequences for both access to medicine and the protection of intellectual property in the developing world. The Evolution of India's Patent Laws India's patent regime has undergone a series of major transformations over the second half of the 20th century that, taken together, have produced the current clashes between multinational pharmaceutical companies and domestic generic manufactures over intellectual property. 7 Although India gained independence from Great Britain in 1947, it took over 20 years before the country was able to enact its own patent law." Perhaps the most notable feature of this first law, "The Patent Act of 1970," is that it removed the "patentability of pharmaceutical products." 9 As a result, pharmaceutical companies were unable to receive patent protection over the actual compounds and drugs they developed. It was still possible, however, to receive a patent for the process of making a substance, but only then for a relatively short maximum time of seven years from the date of the patent. 0 The impact of India's lax patent laws was the development of a thriving generic drug-manufacturing sector." Indian companies were able to reverse engineer medicines developed in other countries, and then produce the same substances through different processes while still receiving full protection of the law. These legal protections resulted in the emergence of major generic firms like Ranbaxy and Cipla and the construction of more U.S. Food and Drug Administration-approved manufacturing centers than any country outside of the United States.1 2 This has not only allowed India to provide access to cheap medicine to its own citizens, but also enabled India to become so prolific as a drug exporter that it is often referred to as "the pharmacy to the world' 3 India's patent laws began to evolve when the country became an original member of the WTO in 1995.) As a condition of membership, India was required to bring its domestic intellectual property laws into compliance with international standards that were elaborated as part of the TRIPS agreement. Since India had not previously extended patents to pharmaceutical products, as part of the agreement it was allowed a 10-year grace period to fully incorporate the international agreement into its domestic patent regime."5 The result was a three-stage process for amending the Patent Act of 1970, ultimately culminating in the Patent (Amendment) Act of 2005, which finally put pharmaceutical patent protection into full effect.16 Despite the increased protection for intellectual property that the reforms provide, many limits were included within the amended patent laws to ensure "the availability and access of medicines."'17 These limits included only allowing patents to be granted for applications that were filed after 1995, and any Indian generic manufacturer, which began to produce a drug before 2005, to continue to produce that product.' 8 Additionally, Section 3(d) of the new amended patent law was included with the hope of only allowing protection for innovative products that are not derivative of other substances, and the act defined an "inventive step" as "a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art." 9 These provisions were designed to take advantage of the flexibility allowed by the TRIPS agreement, but it has remained an open question whether India would interpret the requirements in a way that was consistent with the understanding of other signatories of the TRIPS agreements.2 0 This was the backdrop against which Abbott Laboratories filed its patent application in India. Background on Abbott's Application In 1992, Abbott was awarded its first patent in the United States for the drug Ritonavir.21 Ritonavir is an antiretroviral drug that was developed to treat HIV/AIDS. Ritonavir was later combined with another drug, Lopinavir, developed by Abbott; the combination is marketed as Kaletra. Since its emergence in the world marketplace, the WHO has identified Kaletra as a preferred secondline treatment to fight drug-resistant HIV/AIDS, and recommended its inclusion by governments on their lists of essential drugs.22 As a result, Kaletra is an essential part of the battle against the global HIV/AIDS epidemic. On March 24, 2006, Abbott filed a patent application for a new version of Kaletra in India.2 Abbott had previously filed a patent application for a soft-gel formulation of the drug, but ultimately withdrew the application after it faced opposition during the pre-grant review process.2 4 The new application was an attempt to patent a "solid pharmaceutical dosage form" of Kaletra.25 Abbott argued that this represented a substantial improvement over the previously marketed soft-gel tablets. Specifically, Abbott argued that the new solid dosage form of Kaletra made the drug more heat resistant and that it could now COST AND END-OF-LIFE CARE * SUMMER

4 JLME COLUMN be taken solely with water. 26 Since the previous version of the drug required refrigeration and had to be taken with food, Abbott was able to argue that this presented a potentially critical advancement of special significance to those battling drug-resistant forms of HIV/AIDS in the developing world. Despite Abbott's claimed innovations, the patent application faced substantial objections. In addition to complaints from health advocacy a known substance, and that the process to convert the soft-gel tablets to a solid dosage form was already well known.32 The Decision After nearly four years of proceedings, India's patent office in Mumbai released an opinion rejecting Abbott Laboratories' application to patent a "solid pharmaceutical dosage" form of Kaletra. 3 3 The decision by Dr. Ruchi Tiwari, Deputy Controller of Patents of suitable surfactants' which means that it "cannot be a mere admixture... [and]...be held as not patentable as per provisions of section 3(e)" of the amended Patents Act. 35 In these two concessions, the decision made it clear that it was not using either of the two sections in India's new domestic patent regime that were designed to limit the extension of patents to minor improvements on existing pharmaceutical products. Instead, the decision directly con- The decision by the Indian Patent Office in Mumbai to reject Abbott Laboratories' application to patent a new solid dosage form of Kaletra highlights the fact that the TRIPS agreement did not end the tug of war between groups hoping to increase access to life-saving medications in the developing world and those seeking to provide robust protection to intellectual property to ensure that incentives exist to guarantee the continued development of innovative treatments for diseases. As a result, it remains to be determined whether the long-term impact of this decision will be to increase the availability of generic drugs, or alternatively, to reign in the existing discretion that allows nations to define what constitutes an "inventive step" when reviewing pharmaceutical patent applications. groups like Doctors Without Borders,2 7 four organizations filed formal opposition. 28 Three of the official opponents were the generic manufacturers Cipla, Okasa, and Matrix. 29 The fourth opponent, the Initiative for Medicines, Access & Knowledge (I-MAK), was a U.S.-based nonprofit. 3 0 I-MAK is a group of doctors and lawyers that has waged an international campaign to increase access to affordable medicines by limiting what it views as abuses of the patent system by large multinational corporations. 3 ' Given its importance in the fight against HIV/AIDS, I-MAK has made increasing access to generic versions of Kaletra a top priority. As a result, I-MAK made two official filings in opposition to Abbott's patent application, arguing that the new form of Kaletra was a modification of and Designs, begins by repeating the history of the filings by Abbott and the four official opponents to the applications. The decision then proceeds to recount the amended 22 claims on file from Abbott, and then document the arguments and exhibits of the four opponents. The decision employs an interesting argument discussing the merits. The decision agrees with Abbott Laboratories that the new version of Kaletra is "not a mere discovery of a new form of a known substance." 34 As a consequence, the decision finds that the product "cannot be held as not patentable under the provisions of Section 3(d) of the amended Patents Act." The decision proceeds to again agree with Abbott Laboratories that in the new version of Kaletra "the invention lies in the selection sidered whether the patent constitutes an "inventive step" over previous products. 3 6 In this analysis, the decision only considered two exhibits presented by the opponents of the patent application. The first exhibit was a document that discussed the value and procedure of turning softgel forms of HIV inhibitors into a solid dosage through a process that may require the use of a suitable surfactant. The second exhibit was a document that explored the process of selecting a suitable surfactant to create a solid dosage form of a drug. Based on these two exhibits, the decision concluded that the process "for preparing the solid dispersion formulations [of Kaletra] can be achieved through routine experimentation by combining the disclosures of [the first document] with the disclosure of 298 JOURNAL OF LAW, MEDICINE & ETHICS

5 Darrow and Chilton [the second document]."7 As a result, without discussing the exact standard required by either the Indian Patent Act or the TRIPS agreement, the decision rejected Abbott's application to patent the new version of Kaletra because the product's innovations "clearly do not involve [an] inventive step." 3 ' Potential Impact There are at least four potential impacts that may result from India's decision to reject Abbott's application. First, the most immediate ramification of the decision may be to increase access to the drug for people living with HIV and AIDS in the developing world. The leading opponent to Abbott's application, I-MAK, has already claimed that the impact 3 9 of the case will be "tremendous." I-MAK argues that there are over 33 million individuals living with HIV, and 15 million of them require access to HIV drugs. According to I-MAK's calculations, the cost savings from introducing generic versions of Kaletra that can now be legally produced and importedby Indian manufactures are sufficient to make the treatment available to 130,000 new patients a year. This sentiment has been echoed by Doctors Without Borders 40 and the Health Global Access Project. 4 ' Second, the decision has the potential to set a precedent in which multinational pharmaceutical corporations are held to a higher standard when seeking to gain new patents for improvements on existing innovations in India than in other countries party to the TRIPS agreement. In the first month following the rejection of Abbott's application for a new Kaletra patent on December 30, 2010, at least five major patents were rejected or revoked on similar grounds. 4 2 Analysts have argued that this is part of a trend in India of favoring process over product when evaluating patent applications, and that applying new process to improve upon existing products will be increasingly less likely to receive protection. Given India's large domestic market and generic drug industry, this shift has the potential to make it even more difficult for U.S.- and Europeanbased pharmaceutical companies to compete in the developing market. Third, the decision has the potential to change the behavior of Abbott and other multinational pharmaceutical companies. After being denied a patent in 2006, Novartis claimed that there is "no faster way to kill access to the latest life-saving drugs for people in India than to avoid offering patent protection."4 This proved to be true in Thailand, where in 2007 the Ministry of Public Health decided to issue a compulsory license on Kaletra to allow the import of generic drugs from India. 44 Abbott's response was to reduce the price for Kaletra in 40 countries, but also to withdraw registration for all new products in Thailand. A similar response may occur in India if multinational pharmaceutical companies feel that they are not being provided with adequate protection for their intellectual property. This may lead to a lag between when drugs are available in Western markets, and when patients in the developing world are able to benefit from new pharmaceutical innovations. Fourth, the decision will lead to an increase in claims that India's domestic patent regime falls short of its obligations under the WTO's TRIPS agreement. 45 Since Europe has already signaled its intention to extend patent protection to the new solid dosage form of Kaletra, this case only highlights the drift between the protections being afforded multinational corporations in the West and in India. 46 The Office of the United States Trade Representative (USTR) had already placed India on its priority watch list as a result of its actions "to limit the patentability of potentially beneficial innovations, such as temperature-stable forms of a drug or new means of drug delivery." 47 Since this decision took exactly that course of action, it is likely that India will face increased pressure to either clarify or amend their existing patent laws to be most consistent with the United States' interpretation of the TRIPS agreement. Conclusion The decision by the Indian Patent Office in Mumbai to reject Abbott Laboratories' application to patent a new solid dosage form of Kaletra highlights the fact that the TRIPS agreement did not end the tug of war between groups hoping to increase access to life-saving medications in the developing world and those seeking to provide robust protection to intellectual property to ensure that incentives exist to guarantee the continued development of innovative treatments for diseases. As a result, it remains to be determined whether the long-term impact of this decision will be to increase the availability of generic drugs, or alternatively, to reign in the existing discretion that allows nations to define what constitutes an "inventive step" when reviewing pharmaceutical patent applications. References 1. Patent Application No. 339/ MUMNP/2006, India Patent Office Mumbai, December 30, 2010, available at < MUMNP.2006_Decisiono20copy.pdf> (last visited February 24, 2. Industry Briefing, "India Pharma: Interpreting Innovation, Economist Intelligence Unit," January 6, 2011, available at < index.asp?layout=ib3article&article id= &countryid= &pubtypeid = &industry-id=&company id= &channel id=&rf=0> (last visited March 22, 3. See Patent Application No. 339/ MUMNP/2006, supra note 1, at Doctors Without Borders, India Rejects Patents for Two Key AIDS Drugs: Decision Illustrates Need to Safeguard 'Pharmacy of the Developing World,' Press Release, January 7, 2011, available at < press/release.cfm?id=4949&cat= pressrelease> (last visited March 22, 5. See Industry Briefing, supra note See J. Mueller, "The Tiger Awakens: The Tumultuous Transformation of India's COST AND END-OF-LIFE CARE * SUMMER

6 JLME COLUMN Patent System and the Rise of Indian Pharmaceutical Innovation," University of Pittsburgh Law Review 68, no. 3 (2007): 491, at See also M. K. Gopakumar, "Product Patents and Access to Medicines in India: A Critical Review of the Implementation of TRIPS Patent Regime," Law and Development Review 3 (2010): See generally Mueller, supra note Id., at Id. Initiative For Medicines, Access and Knowledge, available at < FINALAbbottFacts_ pdf> (last visited February 13, 22. V. Slind-Flor, "Microsoct, Abbott, Serious Bidness, Intellectual Property," Bloomberg News, available at < 05/microsoft-abbott-serious-bidnessintellectual-property.html> (last visited March 22, 10. Id., at 513. See also The Patents Act, No. 23. See Patent Application No. 339/ 39 of 1970; India Code (1999), 84(5), MUMNP/2006, supra note 1, at 1. available at < patent/patents.htm> (last visited February 13, 24. Dr. Amarrendra Samal, Letter Confirming Abandoning of Soft-Gel Patent Application, Government of India 11. J. Mueller, "Taking TRIPS to India - Novartis, Patent Law, and Access to Medicines," New England Journal of Medicine (February 8, 2007): Patent Office, available at < softgel%20rejection.jpg> (last visited March 22, 12. Id. 13. See Doctors Without Borders, supra note See Mueller, supra note 6, at See also S. Koshy, "Note: The Effects of TRIPs on Indian Patent Law: A Pharmaceutical Industry Perspective," 25. See Patent Application No. 339/ MUMNP/2006, supra note 1, at Id., at See Doctors Without Borders, supra note See Patent Application No. 339/ MUMNP/2006, supra note 1, at 2-3. Boston University Journal ofscience &7 29. Id. Technology Law 1 (1995): 4, See Agreement on Trade-Related Aspects of Intellectual Property Rights, April 15, 1994, "Marrakesh Agreement Establishing the World Trade Organization, Annex IC, Legal Instruments - Results of the Uruguay Round;' LL.M. 33 (1994): 1125, at See Mueller, supra note 6, at See Gopakumar, supra note 6, See Mueller, supra note 6, at Id. See also Gopakumar, supra note 6, at See Gopakumar, supra note 6; Mueller, 30. Id. 31. See Initiative for Medicines: Access & Knowledge, available at < Mak.org> (last visited March 22, 32. See Patent Application No. 339/ MUMNP/2006, "Statement of the Opponent In Reply to the Applicant's Response," February 16, 2009, available at < storage/i%20mak%2ostatement%20 ofoo2oreply% 20339%2 OMUM% 20 NP% pdf> (last visited March 22, 33. See Patent Application No. 339/ supra note 6, at 563. See also the MUMNP/2006, supra note 1, at 1-2. Patents Act, No. 39 of 1970, 2(1)(ja) 34. Id., at 25. (Universal 2005) (amended 2005). 21. Initiative for Medicines, Access & Knowledge, Fact Sheet on Abbott Laboratories, HIV and Lopinavir/Ritonavir, 35. Id. 36. Id., at Id., at Id. 39. Initiative for Medicines, Access & Knowledge, India Rejects Sham Patent Application for Lifesaving HIV Drug: Pharmaceuticals in India now free to help HIV Patients Worldwide, Press Release, available at < Releaseo pdf> (last visited March 22, 40. See Doctors Without Borders, supra note U.S. Should Applaud India's Decision to Reject Frivolous Patent on Key AIDS Drug, Health GAP, Press Release, available at < press/india patent decision.htm> (last visited March 22, 42. HIS Global Insight, "Same-Day Analysis: Multinationals Hit by Series of Indian patent Office Rejections," January 14, 2011, available at < ihsglobalinsight.com/sda/sdadetai htm> (last visited March 22, 43. See Mueller, supra note 11, at Doctors Without Borders, Fact Sheet, Lopinavir / Ritonavir (LPV/r), available at < MSF%20Facts%20on%20Lopinavir- Ritonavir.pdf> (last visited March 22, 45. See Economic Intelligence Briefing, supra note T. Amin, "Third Party Observation under Article 115 of the EPC against European Patent Application NO ," Initiative for Medicines Access & Knowledge, available at < MAK%200bservation%20EPO% pdf> (last visited March 22, 47. Office of the United States Trade Representative, 2010 Special 301 Report, April 30, 2010, available at < (last visited March 22, 300 JOURNAL OF LAW, MEDICINE & ETHICS