The Swine Flu Outbreak: Cipla on a Patent Roll

Clearly the gods are smiling on Cipla. First, they win a patent battle over a highly profitable anti cancer drug, Tarceva.

Simultaneously, a deadly swine flu strikes and claims several human lives in North America. As nations scramble to address a potential pandemic, Cipla has a generic version of Tamiflu ready to supply any government that wishes to stockpile this drug.

Gilead’s Patented “Tamiflu”

Tamiflu, a drug patented by Gilead and exclusively licensed for manufacture and sale to Roche is considered one of the best drugs today to cater to this kind of a flu. This is not to suggest that it is the best solution–but only that of all the possible alternatives today, it is the best we have. Even at the time of the bird flu, it was known that Tamiflu was not the optimal drug to cater to such viruses. Despite the passage of so many years and the flight of the virus from birds to humans, it’s a pity we haven’t seen any improvements. So much for pharmaceutical innovation.

Recently, the World Health Organization raised the worldwide pandemic alert level in this regard to Phase 4, a phase characterized by confirmed person-to-person spread of a new influenza virus able to cause “community-level” outbreaks.”

Indian Patent Office: Gilead vs Cipla

Given this scenario, it must be really fortuitous that Cipla won the Indian patent battle over “Tamiflu” just about a month back. The Deputy Controller of Patents, Dr KS Kardam issued the decision on the 23rd of March 2009, striking down Gilead’s patent application covering Oseltamavir (and certain other) compositions on the grounds of :

i) lack of inventive step
ii) failure to comply with section 3(d) and
iii) failure to sufficiently disclose the invention claimed.

As with other patent applications rejected on the basis of section 3(d), the key reason for such rejection stemmed from the fact that no evidence of any kind was submitted to demonstrate increased efficacy–apart from unsubstantiated statements in the patent application by Gilead.

Further, the kinds of advantages cited in the application and during arguments were properties like increased solubility (and consequently, a greater capability of being orally administered)–properties that didn’t really impress the Controller as being necessarily more “efficacious”.

Interestingly, in this context, the Controller refused to rely on the earlier Novartis (glivec) patent rejection by another Controller (Rengaswamy) on the ground that the matter had been appealed to the IPAB, where it was pending. Further, the Controller stated that the Madras High Court decision in the Novartis (Glivec) case was not very relevant, since it did not lay down any guidelines on interpreting section 3(d).

Likely Cipla Profits?

Despite the favourable patent ruling above, some commentators opine that unless we see a greater spread of the virus, Cipla may not be able to cash in on this potential pandemic. A news item notes:

““At the current level (swine flu), it’s unlikely that Cipla will get a chance. However, should the swine flu spread and sustain and if Glaxo and Roche run out of their stocks, Cipla could be called in,” Bino Pathiparampil of IIFL Capital told The Telegraph.

According to Pathiparampil, both Roche and Glaxo have adequate stocks to take care of any demand.”

I’m not sure I entirely agree with this. Why would all governments necessarily stockpile only Roche’s drug? Readers may note that although Gilead holds the patent rights to this drug, Roche is the exclusive licensee and manufacturer.

Firstly, governments may decide to stockpile, not based on current estimates of the spread of the virus, but on the basis of a potential future outbreak. Recollect our earlier point that the WHO has escalated the threat of the virus to Level 4.

In which case, can Roche make adequate supplies for all governments to stockpile, a point we raised in a very early blog post? And in this article here. Since then, Roche tied up with a number of manufacturers (including our very own Hetero) to outsource their manufacture.

Secondly, since Gilead hasn’t patented this drug in all countries, these governments may opt for a cheaper priced alternative from Cipla or any other generic manufacturer. And even if a patent exists, some of these governments may decide to override the patent and grant compulsory licenses to enable cheaper alternatives. Unless of course Roche can meet the demands of these countries, in terms of quantity and price.

At least in India, there’s no reason why the government would need to buy from Roche, when there is no patent, and Cipla is likely to sell at much cheaper prices. In this news item, Amar Lulla has indicated that Cipla will sell one dose (10 capsules) at Rs 1000 (approximately 20 dollars).

The Indian government just announced that they are no confirmed cases in India. However, it warned against travel to countries that have reported incidents of virus outbreak. The Economic Times also reports that:

“The ministry of health & family welfare will ask drug makers such as Ranbaxy, Cipla, Hetero, Natco Pharmaceuticals and Roche to stock the anti viral to tackle any emergency in the country, a ministry official told ET.

No case of swine flu infection has been reported in the country but the government has already stored 1 million tablets and plans to raise it to 10 million in the next 15 days, said the official who didn’t want to be named. ”

At the time of the bird flu scare in 2005, Gilead’s patent application was still pending at the Indian patent office and one wasn’t sure if a patent would issue. And many of us wondered as to how the Indian patent flexibilities could be leveraged to ensure manufacture of the only available drug to cure the flu outbreak. Thankfully, we have a clearer legal terrain in India and thanks to Cipla’s challenge, anyone can manufacture this drug now in India.

Of course, Gilead can appeal the Controller’s decison. Having read Kardams’ well reasoned order, I find it unlikely that an appellate authority will disturb his findings.

The Zanamavir Alternative

Incidentally, there are other alternatives to Tamiflu, most notably, GSK’s Relenza (Zanamavir). Dr Kardam’s decision has some discussion on the comparison between Zanamavir (the older known substance) and Oseltamavir (the substance sought to be patented). However, he finds that when compared with Zanamir, Oseltamavir does not really demonstrate any increased efficacy under section 3(d).

As global share prices plumet, Cipla’s valuation is likely to skyrocket. And it will have much to thank Dr Majumdar for, its attorney who succesfully slayed Gilead’s case at the Indian patent office.

But the commercials notwithstanding, let’s all hope and pray that the spread of this virus is contained.