A patent infringement case relating to an anti-diabetic drug highlights the delicate balancing act required to protect innovation while ensuring access to affordable medicines. Vandana Chatlani reports
On 28 April, the Supreme Court of India is scheduled to hear arguments in the dispute between Glenmark Pharmaceuticals and US-based Merck Sharp & Dohme. The conflict between the pharmaceutical companies raises interesting questions about patent protection mechanisms, public interest, utility and the clash between generics and innovator companies.
The dispute centres on an anti-diabetic drug known as sitagliptin. Merck obtained a patent for its sitagliptin molecule in 2007 and marketed the drug as Januvia (sitagliptin) and Janumet (sitagliptin and metformin).
In 2013, Glenmark planned to launch generic versions of sitagliptin: sitagliptin phosphate monohydrate (SPM), branded Zita, and Zitamet (SPM and metformin hydrochloride). On 1 April 2013, Merck filed a suit against Glenmark, alleging infringement of its patent for sitagliptin and seeking an interim injunction to prevent Glenmark from launching the drugs. However, on 5 April 2013, Justice Rajiv Sahai Endlaw of Delhi High Court decided not to grant the injunction, leaving Glenmark free to manufacture and distribute its generics.
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Challenges and arguments
Merck appealed the order. At the appeal hearing, before Delhi High Court division bench justices Ravindra Bhat and Najmi Waziri, Merck argued that Glenmark’s drugs were a deliberate infringement of sitagliptin and challenged the generics company’s salt form of the drug.
Glenmark defended its corner by challenging the validity of Merck’s patent, claiming that it did not disclose the sitagliptin free base, but only its hydrochloride salt. Glenmark further argued that even if the sitagliptin free base was disclosed, admissions made by Merck in another patent application reveal that it is not patentable because it is not industrially applicable.
Glenmark said it would stand by its position, denying infringement even if Merck’s patent was found to be valid. Its own drug, it said, “neither uses sitagliptin base or sitagliptin hydrochloride salt as a raw material, nor is it generated or formed as an intermediate in the manufacturing process”. In addition, Glenmark claimed that SPM was “qualitatively different from the sitagliptin free base” because it had “enhanced pharmaceutical qualities” and thus production of this compound could not amount to infringement.
Merck countered this position, arguing that SPM could not be prepared without the active ingredient – the patented sitagliptin molecule. It further asserted that the phosphoric acid salt of sitagliptin was disclosed in the patent as one of the pharmaceutically acceptable salts and added that there was evidence that Glenmark was aware of the patent for sitagliptin and its pharmaceutically acceptable salts since Glenmark cited them and referred to Januvia in support of its own patent claim in the US.
The court held that sitagliptin was central to the effectiveness of Glenmark’s drugs and that its use of the molecule without authorization clearly amounted to infringement. It also observed that Glenmark chose to launch its drugs without first invoking revocation proceedings or attempting to negotiate for a licence despite the fact that it was aware of a possible challenge to its products.
In its order on 20 March 2015, the court stated: “Glenmark today argues that [Merck] ought to have disclosed international patent applications for SPM and sitagliptin plus metformin since they were the ‘same or substantially the same’ as the suit patent under section 8 … it is surely reasonable for Glenmark to detect the possibility to challenge, when a US patent application for SPM filed by it was opposed by [Merck].”
As a result, the court granted an interim injunction, restraining Glenmark from producing and selling Zita and Zitamet. The judgment stated that the products that were already with retailers and distributors could be sold but all manufacturing activities relating to the drugs had to stop.
The court directed Merck to furnish an undertaking that it would compensate Glenmark for any damage or loss caused, including but not limited to a loss of earnings, should its pending suit against Glenmark be dismissed. Glenmark was directed to furnish a full accounting of its earnings from the drugs, and to undertake to pay any damages awarded against it in the suit.
Glenmark challenged this decision through a special leave petition before the Supreme Court. The court stayed Delhi High Court’s order and is scheduled to hear the case on 28 April.
Mixed reactions
Although the eventual outcome of the case is unknown, reactions to Delhi High Court’s handling of it reveal some of the key areas of debate, discussion and development in the intellectual property arena.
Pravin Anand, the managing partner of Anand and Anand, says that compared with trademarks and copyrights, patents were “a different animal, which did not receive very good treatment at the hands of the court” in the past. The Patents Act too, he says, is weak and offers layers of protection to Indian generics companies, particularly in the field of drugs, food articles and agricultural chemicals. “The courts were soft when they were sued, partly because the price difference between generic and innovator drugs was so huge that the court wanted to ensure the availability and affordability of such drugs,” he said.
Merck’s strategy of differential pricing, according to Anand, who is representing the US company, helped its case. The cost of Januvia is one-fifth of the price of the drug in the US. “That was a major change from the past,” said Anand. “They were directly responding to the issue judges were raising on costing and so they got a lot of sympathy.”
According to Rajeshwari, a partner at Rajeshwari & Associates, Delhi High Court’s latest judgment in the Merck-Glenmark case is well reasoned, particularly on utility, and “quite logical … because regardless of the form in which the product is delivered or sold in the market, the active ingredient – sitagliptin – is the compound that provides the therapeutic effect.”
For Saya Choudhary, a partner at Singh & Singh, who is representing Glenmark, the grant of a stay by the Supreme Court provides another opportunity to fight her client’s case. “From the very start, Glenmark was clear in its understanding that the product which it proposed to launch and which is currently being sold … is non-infringing in nature, as at best, it falls within the scope of a patent application … which currently stands abandoned,” she says, adding that her views are personal and do not necessarily reflect Glenmark’s official position.
The Supreme Court will have to address a number of technicalities while considering the merits of each argument. “The patent that was sought to be enforced was the compound patent whereas the product in the market was a polymorphic form of a phosphate salt,” says Rajeshwari. “There was no patent granted to Merck for the polymorphic form.”
Rajeshwari says similar situations exist in the US and in other countries where innovators have tried to enforce the compound patent. “The usual result, if the case of invalidity is not made out, is that the compound patent is infringed, though the final formulation on the market may be a different form or product,” she says.
Public interest
Zita and Zitamet have been available in the Indian market for two years. In its special leave petition, Glenmark pointed out the court’s failure to consider that the injunction would deprive patients of their daily dosages of these medicines. It also noted that Zita and Zitamet are roughly 30% cheaper than Merck’s Januvia and Janumet drugs. While the price difference is narrow when compared with cases such as the Hoffmann-La Roche suit against Cipla over the drug erlotinib, where the price difference was 300%, Glenmark maintains that price is a factor since those suffering from diabetes would be taking the medicine every day for the rest of their lives. It argues that it has made the drugs affordable and accessible to patients in tier two and tier three cities, and that it produces the drugs in India, while Merck imports its drugs.
“This is the most recent in a series of decisions from the Delhi High Court where interim injunctions have been granted when patent infringement has been alleged,” says Murali Neelakantan, the former general counsel of Cipla. “What is worrying is that it was not an ‘open and shut case’ of infringement. The single judge and the division bench of the Delhi High Court disagreed on whether there was ‘prima facie infringement’.”
Neelakantan questions the court’s rationale in making Merck liable for Glenmark’s lost profits should Merck eventually lose the case. From a public interest perspective, he believes the judges could have considered the adverse impact on patients and protected Merck’s potential lost profits if they had allowed Glenmark to continue to manufacture and sell the products and ordered it to keep accurate accounts of sales so as to indemnify Merck if Glenmark lost the case.
“This decision seems to have significantly moved the goal posts for an injunction in cases where patented drugs are involved,” says Neelakantan. “An interim injunction should not be granted if damages can be an adequate remedy. If Glenmark prevails, all those patients who were denied Glenmark’s products will not be able to claim the money that they will pay for many years to [Merck] for its expensive drugs in a monopolist market.”
“I hope that patient advocacy groups will intervene and highlight the damage that such decisions inflict to the cause of universal access to medicines,” he adds.
Choudhary believes the issue of public interest will continue to “play a major part in patent litigation across the globe irrespective of the market share that generics enjoy”. She says this will also apply to other fields of technology.
“Access and affordability can be dealt with at a theoretical and at a practical level,” says Anand. “At theoretical level, they are important factors for determining whether a compulsory licence should be granted to a generic under the provisions of section 84 of the Patents Act. Access and affordability are not important considerations in the grant of an injunction against a wrongdoer.” He points out, however, that from a practical perspective, access and affordability appear to play a very important role in a judge’s mind and their decision on whether or not to grant injunctive relief. “Cases where the price difference is not so large are more favourably decided in favour of the plaintiff,” he says.”
Industry implications
Regulation and patent enforcement are not linked in India. “Glenmark’s application for a manufacturing licence would therefore proceed and this is the case with most generics,” says Anand.
Where a patent linkage system exists, generics companies cannot obtain marketing approval if a patent exists until the patent has expired or is found to be invalid. Opinions in India are divided over whether the grant of patents should prevent generics makers from proceeding with their approval application before the regulators.
Patent linkage is “a controversial American concept which India has been resisting”, according to Neelakantan.
Choudhary says that an important legal issue which will be settled by this matter is the “construction of a complete specification and implications of admissions (vis-à-vis different families of patent pertaining either to the ‘same subject molecule’ or to ‘related inventions developed subsequently and over and above the subject molecule so as to result in a new chemical entity which is entitled to a separate patent protection’) made by a patentee in other jurisdictions on the same.”
Cases in which there is a basic patent and a subsequent improvement patent relating to a salt, ester, polymorph, etc., will be impacted, says Anand, as “the denial of protection to the subsequent patent would not preclude the court from injuncting the manufacture of the main molecule if the main molecule had been used in the process of manufacturing the derivative product”.
This case also highlights how “at-risk” launches by generics could become much tougher, while for innovator companies moving the court before a launch and obtaining a status quo order is important, adds Anand. “In the said case, it would have prevented the initial denial of injunction,” he says.
A happy medium?
Conflicts in the pharmaceutical world between generics manufacturers and innovator companies could fizzle out as the two sides strike more partnerships and collaborations.
Large pharmaceutical companies are increasingly considering negotiating and executing multiple licence agreements with various generics makers in relation to their proprietary or patented drugs or molecules. Choudhary points to Gilead Sciences, which has signed non-exclusive licence agreements with seven India-based generics manufacturers for its hepatitis C drug sofosbuvir.
“On issues relating to regulatory approvals and pricing policy, generics and innovators have, in fact, joined hands in the past as well to fight for common causes,” she says. “In the near future, the trend of authorized generics and multiple licensing is something which we will increasingly witness in India.”
Anand too thinks that growing discussions between generics and innovator companies hold promise for the future. “There are bound to be settlements, successful mediations and collaborations to figure out a golden middle path.”
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