US ruling gives Indian pharma a booster dose

In a landmark judgment likely to benefit Indian generic drug manufacturers in a big way, the US Supreme Court has ruled against patenting of products with slight modifications.

The ruling was delivered on Monday (April 30).

The judgment in the KSR versus Teleflex case dealt with an attempt to patent a slightly improved version of an automobile accessory. It has come at a time when the US pharmaceutical industry is engaged in intense lobbying to pressure India to relax norms to allow patent protection to modifications of known innovations or 'frivolous patents'.

"The US Supreme Court's decision makes it easier to show obviousness. The decision is likely to make it harder to obtain a US patent. Existing US patents will also be subject to an immediate enhanced threat of re-examination," said DG Shah, the secretary general of the Indian Pharmaceutical Alliance (IPA).

Also, an opportunity to challenge frivolous patents in the US will be a boon for Indian generic companies like Ranbaxy, Sun, Wockhardt and Dr Reddy's, companies which have big plans for generic sales in the US.

Ranbaxy, which faces the largest number of patent infringement cases in the US, may benefit greatly. The company declined to comment on the development.

"The decision will be a big boost for generic drug makers, especially companies like Ranbaxy and Reddys which lost many such cases on similar grounds earlier. The generic makers can move court again and seek reopening of the cases for invalidating the patents of innovator companies," said Gopakumar G Nair, CEO, GNA Paent Gurukul.

"In the pharmaceutical industry, the generic makers claim there is synergy betwen salts and active ingredients, leading to patent innovation. However, in many cases, they were unable to defend when the patent holder challenged the case," Nair added.

"The US ruling is not just about business opportunities for generic companies. It will make access to generic medicines easier and affordable," Shah said.

The US-based pharmaceutical companies' concern over the outcome of the case was evident as they signed briefs backing Teleflex, which sought patent for an accelerator pedal fitted with an electronic sensor, he added.

Apart from the Pharmaceutical Research and Manufacturers of America (PhRMA), companies like GE, 3M, P&G, J&J and Dupont had also signed the briefs, Shah said.

The companies that supported the move to tighten the patentability norms were Information Technology and automobile majors like Intel, Cisco, Microsoft, Time Warner, Viacom, Micron Technology, General Motors, Ford and DaimlerChrysler.

The global generic-drugs market is estimated to be $60 billion with the US and Britian accounting for over half the sales. It is expected to touch $300 billion in five years as drugs worth $120 billion will go off-patent over the next couple of years in the US alone.