Part I: Pfizer’s testimony leads the way as US pressure on India increases

Readers may remember our recent coverage of Pfizer’s Chief IP Counsel, Roy Waldron’s testimony before a hearing of the US House of Representatives and the heated exchange that followed between Waldron and the Indian Pharmaceutical Alliance (IPA) thereafter. Waldron’s main allegations were that the Indian Pharmaceutical patent regime flouted international trade rules and abused the compulsory license system and recommended that the US government use all means at its disposal to get India in line. IPA responded with a strong letter of their own rebutting Pfizer’s main points. Since the time of that post, I’ve also received a copy of Pfizer’s response to IPA, dated 23 May 2013 (available here).
There are a couple of things which stood out to me about Pfizer’s statement. Due to the effect that their lobbying is evidently having I will address these in Part I.  Part II will look at the larger context of international pressure that US is trying to create towards establishing a stronger pharma patent regime in India. (Warning: Both posts are fairly long)

Pictured above: Image too humorously relevant to not include
I. Pfizer’s response: 
Let me start off by stating that I think India has a long way to go to better the innovation climate for pharmaceutical products. Having said that, aside from Pfizer’s growing revenues coinciding with their growing complaints, there are some essential parts of Pfizer’s statement where I can’t help but think that they are shamelessly engaging in intellectual dishonesty. And this is having dangerous repercussions as will be discussed in part II later.
Waldron says that India’s patent regime has failed to reach standards required by TRIPs due to S.3(d) which allegedly “effectively nullified the contributions of the whole discipline of pharmaceutical sciences”. He then points to the Glivec (Novartis) case as an example to prove his point, stating that bioavailability is the holy grail for pharmacists and by any definition is a more therapeutically effective drug. He goes on to state that India’s reason and rationale for not complying with the full extent of its TRIPS obligations is ‘related to preserving its domestic industry’s export markets’.
Firstly, the Glivec case is a ridiculous example to take, simply because Novartis did not submit data to back up any claim of increased therapeutic efficacy over the former ‘known substance’ imatinib mesylate. Contrary to what Waldron seems to indicate, the Court had in fact stated that increased bioavailability “can” be linked to therapeutic efficacy. However, as the judgement holds in para 189 “In this case, there is absolutely nothing on this score apart from the adroit submissions of the counsel. No material has been offered to indicate that the beta crystalline form of Imatinib Mesylate will produce an enhanced or superior efficacy (therapeutic) on molecular basis than what could be achieved with Imatinib free base in vivo animal model.”
To state that a Court should grant a decision in Novartis’ favour when they fail to submit evidence to back up a claim is disingenuous.
Further, Pfizer’s claims as to what consists of evergreening should’ve taken into account their own experience in Pfizer v Apotex, when a US Fed Cir Court ruled that their claimed advantage of increased solubility and stability were not sufficient ‘since it found the claimed advantage (better solubility and stability) to be fairly ordinary and the result of mere routine experimentation.’ Simply put – trivial changes cannot be passed off as incremental innovation.
Secondly, for all their declarations of India not fulfilling their WTO TRIPs obligations, Pfizer’s submission was clear that they did not want this to go to the WTO dispute settlement body. They do however want US to use ‘every available bilateral and multilateral fora to push their message – apparently this doesn’t include the WTO forum itself. My opinion is very simply that they know a decision on this issue would likely go in India’s favour . This would a) encourage other countries to follow India’s role on encouraging only therapeutically innovative pharmaceutical patents, and b) would remove leverage for pushing for (unnecessarily) stronger patent rights.
Very briefly, the reasons why India’s S. 3(d) would likely be held as TRIPs compliant: 
The WTO DSU (Art 3.2) mandates that the existing provisions of the covered agreements are to be clarified in accordance with ‘customary rules of interpretation of public international law.’ This takes us to the Vienna Convention on the Law of Treaties, 1969 (VCLT), which holds that provisions of a treaty must be interpreted in accordance with the ordinary meaning to be given to the terms of the treaty, “in their context” and “in the light of its object and purpose”. For the object and principles, we turn to Art 7 and 8 of the TRIPS Agreement.
Art 7 (Objectives) emphasizes a balance being struck between technological advancement and social and economic welfare, to the mutual benefit of producers and consumers of technological knowledge.
Art 8 (Principles) also sets forth some of the basic principles of the Agreement, providing that “Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health … provided such measures are consistent with the provisions of this Agreement.”
And of course the Doha Declaration on TRIPs and Public Health unequivocally affirmed that TRIPS “can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.”
Allowing the grant of insufficiently inventive or trivial patents or otherwise lax standards, can result in blocked legitimate competition, discouraging further innovation, market distortions and distort trade and harm for public welfare.  A provision like S.3(d) prevents these harms, and due to its applicability in the pharmaceutical sector, encourages therapeutically beneficial innovation rather than minor changes to known compounds which do not increase health benefits and yet allow monopolistic costs.
More than mere compliance, I’d go as far as to say that S 3(d) in fact protects the regime that TRIPs sets up.

As for the question of discrimination in field of technology:

Aside from mandating the three requirements for patentable subject matter (new, inventive step, and capable of industrial application), Art 27.1 mandates that “…patents shall be available for any inventions, whether products or processes, in all fields of technology… ” and “…without discrimination as to … the field of technology…”. It does not however define these requirements, leaving room for interpretation. Art 7 and Art 8 already suggest that Art 27.1 requirements can be crafted to suit member country needs.
In Canada – Patent Protection of Pharmaceutical Products, the panel described ‘discrimination’ as “results of the unjustified imposition of differentially disadvantageous treatment.” The panel also stated that Art 27 does not prohibit bona fide exceptions to deal with problems that exist only in certain areas. While there is ‘differential’ treatment, S.3(d) is not ‘differentially disadvantaging’ in its application. It recognizes that a unique problem exists with chemical entities – i.e., the possibility of ‘evergreening’ – and puts forward a condition which ensures that these trivial changes cannot be patented. Indian patent law still requires patentable subject matter to be new, involve an inventive step, and be capable of industrial application. On top of this, it is recognizing that ignoring this problem could lead to high public health consequences, and puts forth S.3(d) to handle that situation. Thus is it ‘unjustified imposition of differentially disadvantageous treatment’? No. It is simply justified imposition of differential treatment. And it is hopefully something that other countries aren’t scared / politically pressured against incorporating in their own patent regimes. The fact that Pfizer/US specifically want to avoid going through the rightful dispute settlement mechanism to decide this, to me, is indication enough that they are well aware of the actual ‘strength’ of their claims and fear that a panel ruling on this will delegitimize their claims.
Amongst his other statements, Waldron also claims that India is violating its TRIPs obligations due to its ‘local working’ requirement for Compulsory licenses, and due to the lack of a provision providing protection for proprietary data.
There are certainly arguable – to – definitive counters that can be made to most (but not all) of his points. (For eg: See part 3 here, and any of the posts here) I am not going into them for now. I simply wanted to point out that while certain central claims of his statement are plain wrong and others are certainly arguable, this has been portrayed as a real and present ‘danger’ to the US House of Representatives. This sort of laced rhetoric is not only dangerous for the millions that rely on the low priced drugs that India enables but also because it contributes to the simple minded “Stronger IP = more innovation” rhetoric. It removes focus from the necessity of keeping in mind all the various factors that are required to be considered while formulating pharmaceutical innovation and access to medicine policy.
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2 thoughts on “Part I: Pfizer’s testimony leads the way as US pressure on India increases”

  1. Fantastic piece, SPB.
    Reminds of para 3.98 in Feroz’s book on patent law. He too subscribes to 3(d) being a policy/ health test (safeguard).

    Freq. Anon.

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