Understanding Evergreening of Patents in the Pharmaceutical Industry

Introduction to Evergreening of Patents 

“Wherever the art of medicine is loved, there is also a love of humanity” – Hippocrates

India is a country which is known for its affordable medicines and thereby called as the “pharmacy of the world”. Having a strong generic drug industry, India is known for producing high-quality medicines at a fraction of the cost. We can see the major focus of India to continue this trend from the policies and initiatives like “Pradhan Mantri Bhartiya Janaushadhi Pariyojana” promoting generic medicines and promoting price control measures through government authorities like “National Pharmaceutical Pricing Authority”

India’s stance with regard to pharmaceutical world and promotion of generic medicines is focused towards the concept of compulsory licensing. India has shown a strong resistance towards patent evergreening in pharmaceutical sector under the Patent Act, 1970. Its major aim is to help prevent multinational pharmaceutical companies from monopolizing life-saving drugs like that for lupus a deadly disease which has impacted many

Evergreening is a strategy used by pharmaceutical companies to extend their hold and monopoly over a drug beyond its original patent term. This is often done by making minor modifications to the drug and thereafter claiming a new patent over the modified version of the already patented drug whose patent limit is about to end. It is done in various ways, such as –

• Changing the formulation (e.g., converting a capsule into a tablet)
• Combining it with another drug
• Making minor chemical modifications which does not provide any additional significant therapeutic benefit

In order to curb this issue India has taken a stance against evergreening through Section 3(d) of the Indian Patents Act, 1970. This section states that new forms of already patented substances cannot be patented as a new drug unless they show a significant improvement in efficacy. This prevents pharmaceutical companies from obtaining new patents for minor modifications of already patented drugs.

But due to this stringent stance of India in pharmaceutical patenting, pressure from various national as well as international pharmaceutical giants continues to pose a threat to the aim of universal medicine affordability.

On the one hand where India is focused on this social stance in global arena for providing cheaper and affordable medicines, there is also another angle that is concerned with the commercial aspect of the pharmaceutical industry. The stringency of patent laws with regard to medicine manufacturing has put many pharmaceutical manufacturing units in dilemma holding a critical stance for the laws.

Efficacy of Section 3(d) of Indian Patents Act, 1940 and other regulatory frameworks in curbing evergreening of patents

India is known as the “pharmacy of the world” due to its production of affordable generic drugs and section 3(d) helps maintain the idea of affordable medicines by not allowing patented drugs to have the commercial viability because of patent tag and eventually help in making them generic thereby reducing the market value of the drug and making it affordable for all. Further the law forces pharmaceutical companies to focus on genuine innovation rather than just cosmetic changes.

Along with Section 3(d), the other sections that subtly impact the evergreening of patents in India are Section 2(1)(j) which requires the three key features of novelty, inventive step and industrial applicability to label a drug as “invention” while 2(1)(ja) requires the involvement of a technical advance or economic significance or both for something to be labelled as “inventive step” and grant of secondary patent. These are the steps that are required to be complied with even before reaching Section 3(d). Further Section 25(1) & 25(2) provides grounds for pre-grant and post-grant opposition to patents, including lack of novelty or inventive step. These are usually the primary grounds which are used to challenge evergreening attempts. Another Section 64 lists the grounds for revocation of a patent, including failure to meet patentability requirements. Government also has the power to revoke a patent if it is deemed prejudicial to public interest under Section 66. This could apply in cases of excessive patent monopolization. In order to mitigate the negative effects of evergreening, Section 84 provides for compulsory licensing, ensuring that essential medicines remain accessible even if a patent exists, thereby mitigating the negative effects of evergreening.

Novartis v Union of India

With regard to this issue a landmark judgement was passed by Supreme Court in the case of Novartis v. Union of India (2013), wherein –

Novartis sought a patent in India for Glivec (Imatinib Mesylate), an anti-cancer drug. The Indian Patent Office rejected the patent, stating that the drug was only a modified form of an existing compound and did not show significant improvement in efficacy. Novartis challenged this in court. It was argued that rejection by the patent office is a violation of international patent norms.

The Supreme Court of India ruled against Novartis, stating that the drug did not meet the enhanced efficacy requirement under Section 3(d) and the ruling eventually reinforced India’s commitment to affordable healthcare by preventing companies from extending patent monopolies through minor modifications.

What are the issues with the legal regulations concerning Evergreening of Patents in India?

Section 3(d) states that a modified drug must show “enhancement of the known efficacy” to be patentable. However, the term is not clearly defined which creates an ambiguity. The term enhanced efficacy has although been interpreted in Novartis v. Union of India (2013). The Supreme Court interpreted enhanced efficacy for pharmaceuticals as “therapeutic efficacy”, meaning the drug must show a significant improvement in treating disease. The court held that just the improvement in properties like change in the physical nature of the drug like increased solubility or stability should not be considered as a ground from claiming patent.

However, there is no clear guideline on how much improvement qualifies, leading to inconsistent decisions on patent applications.

The 2nd issue is that of contradiction of the provisions of Section 3(d) with that of Trade-Related Aspects of Intellectual Property (TRIPS) Agreement to which India is a signatory. TRIPS mandates patent protection for inventions. Article 27(1) of TRIPS mandates that granting of patent should involve novelty, inventive step and industrial applicability without additional restrictions. But Section 3(d) requires an additional restriction of “enhanced therapeutic efficacy” for pharmaceutical patents. Also, Article 27 of TRIPS mentions that there should not be any discrimination between patents belonging to technologies from different fields. As Section 3(d) has specifically been created for pharmaceutical patents, this highlights the discriminatory nature of the provision with regard to pharmaceutical sector as compared to other technologies.

The 3rd issue with regard to section 3(d) is that it discourages innovation as it denies incremental innovation. Incremental innovations can lead to better drug formulation, but due to the stricter restrictions imposed under Section 3(d) the researchers lack any motivation to look forward to incremental innovations. The U.S. has pressured India through trade negotiations to dilute or remove Section 3(d). The Office of the United States Trade Representative (USTR), in its Special 301 Report has highlighted that US Pharmaceutical Companies operating in India faces challenges in the form of threat to patent revocation, narrow patentability arena and lack of presumption of patent validity due to stringent pharmaceutical patent laws. India has also been placed under USTR’s “Priority Watch List” due to the same reason.

Impact of stringent patent laws:

The primary impact of the stricter anti-evergreening stance is that it discourages research into incremental but useful innovations, such as improved drug formulations with fewer side effects.

Many multinational pharmaceutical companies are withdrawing from launching new drugs in India out of the fear of patent rejection. Many global pharmaceutical companies have also criticized Section 3(d) while arguing that it discourages investment in drug research and development in India.

Arguments in Favour of Section 3(d)

The first argument in favour of Section 3(d) is that it ensures Affordable Medicines & Public Health Protection. By preventing evergreening, Section 3(d) allows generic drug manufacturers to produce affordable versions of medicines once the original patent expires. This is in accordance with the declaration made in the 4th WTO Ministerial Conference held in Doha, Qatar in 2001which affirmed the governments’ sovereign rights for protecting public health.

Example: Indian Patent Office rejected Dolutegravir Application for providing affordable HIV Drugs

The next argument in favour of Sec 3(d) is that it promotes Genuine Innovation Over Trivial Modifications, it only filters out minor changes that do not provide real therapeutic benefits.  Companies are still encouraged to develop New Chemical Entities (NCEs) or demonstrate substantial improvements to qualify for a patent. NCEs provide a competitive edge in the market. Companies that can bring innovative new drugs to market have an advantage over their competitors. The new drugs can easily attract more patients and insurers, which can be a game-changer from competitive point of view.

Example: Drugs with significant improvements in bioavailability, reduced side effects, or new mechanisms of action can still be patented under Indian law.

It is Strengthening India’s Domestic Generic Industry as India’s pharmaceutical sector thrives on generic drug production, contributing significantly to healthcare affordability worldwide.

It helps in preventing monopolization of Indian pharmaceutical industry. If Section 3(d) was diluted, multinational pharmaceutical companies could monopolize the market through evergreening, harming India’s generic drug industry.

Example: The Indian generic industry saved billions in healthcare costs globally by providing affordable alternatives to patented drugs.

An article in New York Times after Novartis case mentioned that –

“The ruling will also help India maintain its role as the world’s most important provider of inexpensive medicines, which is critical in the global fight against deadly diseases.”

Our Opinion:

The criteria for “enhanced efficacy” should be clearer and more consistent. This could reduce the ambiguity and make it easier for genuine innovators to obtain patents for incremental but meaningful advances in drug development. Another possible reform could involve creating exemptions or more lenient standards for life-saving medicines. If certain formulations are critical to public health, the standard of enhanced efficacy could be relaxed to allow quicker access to improved versions of essential drugs. Public-private partnerships could be used to foster innovation while keeping costs low. This would allow for shared risks and benefits, ultimately ensuring that the end goal is access to affordable, high-quality medicines. Patent offices need to regularly train examiners and maintain a supportive infrastructure such as prior art databases