The Hindu Business Line : Patent challenges: Pharma cos walking a tightrope

WILL domestic pharmaceutical companies that take the aggressive patent-challenge route into the US market be forced to rethink their strategies, following the recent high-profile setback that Dr Reddy's Laboratories (DRL) suffered in its legal battle with Pfizer over the latter's hypertension drug Norvasc?

A cross-section of Intellectual Property Right (IPR) experts, including officials with the US Court of Appeals for the Federal Circuit (a body that has dealt with patent-challenge cases involving Indian generic companies such as Ranbaxy and DRL) told Business Line that it seems unlikely a rethink is on the cards.

"Companies will continue to do what is in their interest," observes Mr Randall R. Rader, a Circuit Judge on the United States Court of Appeals for the Federal Circuit. Judge Rader was in India during the weekend when the US Court of Appeals reversed a lower court ruling and determined that the patent extension covering Pfizer's Norvasc (amlodipine besylate) is applicable to Dr Reddy's amlodipine maleate.

"Most Federal cases involve a foreign party i.e. the company could be from India, Israel, Japan, China, Canada etc.

The Para IV provision, involving a patent challenge, has been woven into the law to encourage more companies to get into the market. As a matter of law, the courts don't care who the parties are. They enforce the law with an even-hand," points out Mr Rader, who has in his capacity as judge, dealt with cases involving Indian companies such as Ranbaxy and DRL.

Echoing similar sentiments is Professor Martin J. Adelman, Director of the Dean Dinwoody Centre for Intellectual Property Studies.

He observed that generic companies will continue to undertake patent challenges, since it is "game" where generics can win a six month exclusivity on a drug. However, he felt that domestic companies should focus on the local market where there is a "goldmine of opportunities". "If Indian patent laws were made stronger, then more foreign companies would be interested in coming here and working on diseases that are specific to this region."

Meanwhile, Mumbai-based analysts point out that generic companies are unlikely to give up the aggressive patent-challenge strategy, as it is "highly rewarding, although it involves an element of risk and expenditure. These parameters are factored into plans made by the companies as they continue to walk the risky path, as a `hit' would translate into a jack-pot."

But the word of caution comes from another analyst tracking the segment: "Small pharma companies do not have the where withall to undertake patent challenges. Large ones like Ranbaxy adopt a safe mix of a patent-challenge and a strategy targeting drugs that go off patent. Pharma-major Nicholas Piramal's strategy is to align with other pharma majors. But for a company like DRL, where about 74 per cent of its applications pending in the US are said to be patent-challenges, the company will have to watch its step. Losing a case is an expensive proposition with about Rs 45 crore going down the drain. And shareholders will start putting pressure on a company if patent-challenges do not translate into striking the jackpot."