The Indian pharmaceuticals with its proven product standards and national and International regulatory compliance is the 3rd largest producer and suppliers of cost-effective generic medicines worldwide. The effort to make affordable lifesaving drugs availability for the general population is a huge task performed only if pharmaceutical firms and regulatory authorities go along. In India, the affordability of drugs is monitored and regulated by National Pharmaceutical Pricing Authority (NPPA), a regulatory agency under Department of Pharmaceuticals. NPPA plays a major role in bringing down the prices of essential lifesaving medicines in the country. As a result, the lifesaving drugs are available in India at a more reasonable and economical price compared to other countries. Moreover, the Indian Patents Office (IPO), while being dedicated towards the innovation support by grant and protection of patents, also allows for certain exclusions to monopoly especially with respect to innovations in pharmaceutical sector. Here we are discussing the measures taken by IPO and NPPA towards drugs affordability in India.
National Pharmaceutical Pricing Authority (NPPA):
NPPA is a regulatory and executive agency to implement Drug Price Control Order (DPCO), 1913, under Essential Commodities Act, 1955. The NPPA regulates the price of schedule-I drugs, thereby list of essential medicines updated by regulators time to time. The NPPA fix the maximum ceiling price of Schedule-I drugs and publish through National List of Essential Medicines (NELM) periodically. Moreover, apart from the price control of scheduled drugs, the certain provisions of DPCO are specifically to monitor the price of non-scheduled drugs.
Non-scheduled drugs and NPPA: The NPPA's right to control the prices of non-scheduled drugs (drugs not listed in schedule-I) is performed under Para 19 of DPCO, 2013. Likewise, the NPPA monitors the price of non-scheduled drugs under Para 20 of DPCO, 2013, as explains below-
- Paragraph 19 of DPCO prescribes that, notwithstanding anything contained in this order, the Government may, in case of extra-ordinary circumstances, if it considers necessary so to do in public interest, fix the ceiling price or retail price of any drug for such period, as it may deem fit and where the ceiling price or retail price of the drug is already fixed and notified, the Government may allow an increase or decrease in the ceiling price or the retail price, as the case may be, irrespective of annual wholesale price index for that year.
Note- the internal guidelines of Para 19 of the DPCO, 2013 was withdrawn by immediate effect on 19.09.2014 vide letter no. 31026/ 53/ 2014-PI-II12. However, Department of Pharmaceuticals (DoP) has formed a new inter-ministerial committee and instigated them to examine and frame a method that targeted to bring down the exorbitant price of patented drugs within the country either by negotiation or reference pricing13.
- Paragraph 20 of DPCO, 2013: Monitoring the prices of non-scheduled formulations-
- The Government shall monitor the maximum retail prices (MRP) of all the drugs, including the non-scheduled formulations and ensure that no manufacturer increases the maximum retail price of a drug more than ten percent of maximum retail price during preceding twelve months and where the increase is beyond ten percent of maximum retail price, it shall reduce the same to the level of ten percent of maximum retail price for next twelve months.
- The manufacturer shall be liable to deposit the overcharged amount along with interest thereon from the date of increase in price in addition to the penalty.
Patented Drugs and NPPA: The non-applicability of the provisions of DPCO is being prescribed under Para 32 of DPCO, 2013.
- Paragraph 32 of DPCO, 2013: Stipulates that the provisions of DPCO shall not apply to certain cases :
- A manufacturer producing a new drug patented under the Indian Patents Act, 1970, (product patent) and not produced elsewhere, if developed through indigenous Research and Development, for a period of five years from the date of commencement of its commercial production in the country.
- A manufacturer producing a new drug in the country by a new process developed through indigenous Research and Development and patented under the Indian Patents Act, 1970 (process patent) for a period of five years from the date of the commencement of its commercial production in the country.
- A manufacturer producing a new drug involving a new delivery system developed through indigenous Research and Development for a period of five years from the date of its market approval in India.
Provided that the provisions of the above paragraph shall be applicable only when a document showing the approval of such "new drugs" by the Drugs Controller General of India (DCGI) is produced before the Government.
The Indian Patents Act (IPA):
There are certain provisions of the IPA, which play a major role in pharmaceutical related invention, and its affordability and availability. Sections such as Section 3(d) and Section 3(e) are important with respect to pharmaceutical inventions, and Section 84(1b) and 92(1) encapsulates for drug affordability and availability respectively under special circumstances.
Section 3(d) and 3(e) narrows down the scope of patentability for insignificant or incremental pharmaceutical discoveries and supports the true innovations in terms of efficacy.
- Section 3(d) prescribes that the mere discovery of a new form of a known substance which does not result in enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant is not patentable.
- Section 3 (e) prescribes that a substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance is not patentable.
The Section 84(1) relates to compulsory licensing provisions under IPA, whereby, the Controller of Patents is empowered to grant compulsory licenses after expiration of three year from the date of the grant of the patent under prescribed grounds-
- That the reasonable requirements of the public with respect to the patented invention have not been satisfied, or
- That the patented invention is not available to the public at a reasonably affordable price, or
- That the patented invention is not worked in the territory of India.
It is to be noted that the clause (b) above mandates the patentee make the patented drug available to the public at a reasonably affordable price, so as to avoid the said patent from being considered for compulsory licensing.
Further, Section 92(1) prescribes that if the central government is satisfied that in circumstances of national emergency or in extreme urgency or in case of public non-commercial use, it is necessary that the compulsory license should be granted to work the patent, it may make a declaration to that effect by notification in the official gazette, whereupon-
- The Controller shall on application made at any time after the notification by any person interested grant to the applicant a license under the patent on such terms and conditions as he thinks fit;
- In settling the terms and conditions of license granted under this section, the Controller shall endeavor to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.
Accordingly, in case of said extreme circumstances and upon Gazette notification by the Central Government the Controller is empowered to grant compulsory licenses with respect to the notified patents and while doing so the Controller is required under aforementioned provision (ii) to make the patent available to the public at lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.
Upon considering the provisions of the NPPA and IPA, it can be said that the affordability and availability of pharmaceuticals is directly and/or indirectly affected by DPCO, 2013 and Indian patent system, which is to the benefit of public at large in India. However, it has been seem at some instances that the said systems create a hurdle in pharmaceutical growth and expansion in the country, since the pharmaceutical companies do become indecisive with respect to launching of their products in India as compare to U.S. and European countries.
Xtandi Vs Indian Patent Office:
Xtandi (generic name-Enzalutamide), a synthetic non-steroidal, anti-androgen drug developed by a group of researchers from University of California, Los Angeles (UCLA), who then licensed its patents to a US based biopharmaceutical company called Medivation. Later in 2009, Medivation in a joint venture with Astellas, a Japanese
pharmaceutical company started developing, marketing and commercializing Enzalutamide globally14. In August 2012, USFDA approved MDV3100 (Enzalutamide) for the treatment of metastatic castration-resistant prostate cancer. At present apart from Medivation and astellas, Pfizer also got the right over Xtandi as a result of medivation acquisitions in 201615.
Xtandi is a potent, best-seller but also a high-priced anticancer medicine by Astellas for the treatment of the second most common cancer in men. Despite the claims of providing coupons, Medicare and some patient assistance programs to uninsured or underinsured cancer patients by Astellas 16. The Drug still appears costly especially for economically disadvantaged African-Americans in U.S., as Xtandi price is much higher costing around $129,000 in a year in USA than the other high income countries. As a result, the US congress and lawmakers are demanding an open and transparent public hearing on Xtandi pricing; and the major concern of demand is the exorbitant pricing of Xtandi in USA despite its being developed in their own country by using their own funds17.
In India, Astellas is selling Xtandi at the estimated cost of $45 for each 40 mg pill and $179 (Rs. 11521.33) per day, a way expensive then the daily income of a person in India (As per the World Bank report 2015, the estimated daily income of a person in India is $4.36 (Rs. 280.00)). However, these
exorbitant pricing and ongoing patent fight for Xtandi has been opposed at various level. For e.g. the Union for Affordable Cancer Treatment (UACT) together with 56 organizations has requested the reagent of University of California, Los Angeles (UCLA) to back off its petition filed to Delhi high court against the IPO decision of patent denial. As this ongoing patent fight may delay the generic version of Enzalutamide (Xtandi) in the country; and its supply to other low economic countries where the said drug has no patents and/or not affordable anyway18.
Unfortunately, It's been a decade for Xtandi patent fight in India, the UCLA application for Xtandi patent was first filed at Indian Patent Office (IPO), Delhi in 2007 (Application Number – 9668/DELNP/2007). Thereupon, Indian Pharmaceutical Alliance, Fresenius kabi, BDR Pharma and few individuals filed opposition against this application on 2012, 2013 and so on. Later in 2016, the IPO rejected the application on the grounds of; lack of inventiveness, section 3(d) and Section 3 (e) of the Patents Act. Consequently the reagent of UCLA filed a petition before the Delhi high Court challenging the IPO decision of patent refusal and looking forward for the next hearing.
Xtandi will either win the patent fight or not, but in both the situations it will have a vital impact on the affordability of said drugs amongst the cancer patients in India. The ongoing fight for patent is already a reason for delay in availability of the generic version of Enzalutamide (Xtandi) for the cancer patients in India.
If Xtandi does not receive the patent protection-
- The Pharmaceutical industries in India may manufacture the generic version of Enzalutamide on the grounds of no patent, and
- The provision to bring down the price of non-scheduled formulations under paragraph 19 and 20 of DPCO, 2013 will be also applicable.
If Xtandi receives the patent protection- The Indian government will have two options to bring down Xtandi's price:
- The provision to grant compulsory license after expiration of three year from the date of the grant of the patent based on aforementioned circumstances under Section 84(1) and Section 92(1), will be applicable.
- The provision to bring down the price of non-scheduled formulations under paragraph 19 and 20 of DPCO, 2013 will might be applicable. As Xtandi has not developed through indigenous/ domestic R&D process would be out of the Paragraph 32 exclusion as stated above.
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