Drug patents: A question of morality

The 2013 film “Dallas Buyers Club” touched many with its story about HIV/AIDS. So powerful was the account of Ron Woodroof’s attempt to bring affordable drugs to AIDS patients in Texas that the film generated critical acclaim.

Woodroof’s story resonates today. In August, a former student called Greg Jefferys compared himself to the Texan in an article published by the Australian Broadcasting Corporation. He began importing Sovaldi (sofosbuvir) from Chennai in India to Australia, as he argued the drug was more affordable in the Asian country.

Central to both Woodroof’s and Jefferys’ story is the quest to bring affordable drugs to market for people who desperately need them. In a similar fashion, US-based not-for-profit organisation the Initiative for Medicines, Access & Knowledge (I-MAK) has opposed one of two patent applications for Gilead’s drug Sovaldi on the grounds it is invalid. What motivates I-MAK, which has filed challenges in several jurisdictions, is a drive to bring down the cost of Sovaldi, a treatment for people suffering with hepatitis C.

I-MAK has had some success so far. At the beginning of the year, the Indian Patent Office (IPO) rejected the application. In issuing its decision, the IPO relied on section 3(d) of India’s Patents Act, which says that a patent cannot be granted for the “mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance”.

In June, it was the turn of China’s State Intellectual Property Office (SIPO) to reject Gilead’s patent application. SIPO said the patent covered non-patentable subject matter and lacked an inventive step after it was challenged by I-MAK the previous September.

I-MAK will also be hopeful of successfully opposing Gilead’s application at the European Patent Office (EPO). The EPO has yet to issue a decision on the challenge, which was filed by I-MAK and France-based Médecins du Monde (Doctors of the World) in February 2015.

Reform is needed

According to the World Health Organization, between 130 and 150 million people suffer from the chronic hepatitis C infection globally. Every year, 500,000 die from hepatitis C-related liver diseases.

I-MAK’s mission is to bring down the current price of a Sovaldi pill from around $1,000 to something more affordable for people in the world’s poorest jurisdictions, ultimately in the “global fight against an exploding hepatitis C epidemic”, in I-MAK’s words.

The Sovaldi patent application protects “old science, and patents should not be granted to products that are based on well-known techniques that are obvious to try”, says I-MAK on its website.

Tahir Amin, director of intellectual property at I-MAK, says the organisation is not “anti-patent” but is instead concerned about a system that issues obvious or non-inventive patents rather than rewarding innovative ideas.

“What we’re about is understanding how these companies are given these rights by the marketplace and whether these rights are compliant with the law. When we break down a lot of facts around these drugs we find that they don’t meet the requirements for patentability, but they still keep getting granted and that creates a different conundrum.

“By exposing the problems of the patent we get to the heart of the issue and we say that we need the reform, we need to come up with a different way of addressing these incentives; nobody wants to have that conversation. We’re just continuously giving companies these instruments to basically bludgeon people with pricing. In Europe it is going through the roof,” he adds.

In September 2014, Gilead expanded the licensing agreement for Sovaldi to seven India-based pharmaceutical companies to manufacture and distribute the drug across 91 developing countries. Gilead says it makes it a “priority to increase access to its medicines for people who can benefit from them, regardless of where they live or their economic means”.

Such practices include tiered pricing, voluntary generic licensing, negotiating with national governments, and partnerships with business and non-profit organisations.

At the beginning of 2015 Gilead further expanded the licensing agreement through its Access Operations and Emerging Markets programme to include the investigational NS5A inhibitor GS-5816. In the previous issue of LSIPR, Christina Carlson, senior counsel at Gilead, said the company is trying to “identify different ways that Gilead can work with local communities to better assure access to medicines”.

Amin says such actions are still not enough to bring the Sovaldi drug to the millions who are suffering from hepatitis C. He adds that the opposition to Gilead’s patents covering drugs such as Sovaldi is “effecting change in Gilead’s behaviour”.

For instance, SIPO’s rejection of Gilead’s patent has forced “Gilead to go and sit at the table with the Chinese government to discuss the Sovaldi price”, says Amin, and the IPO’s decision has “caused Gilead to broaden its licensing agreement”.

“Do we as a society want to have drugs for conditions that need treatment? We probably do. Who is going to invent them and bring them to market?

“If you take away their tools then they start to behave,” Amin adds.

Amin argues that the Sovaldi patent is symptomatic of a much bigger problem: that the patent system is not fulfilling its role in granting patents for genuinely inventive ideas.

“From a legal perspective, if you break down the science in the patent application, the ideas behind the drug do not meet the legal requirement of being novel.”

Across the EU and the US there is a need to debate how the patent system functions, he adds.

Such debates are beginning. Republicans and Democrats have both expressed a need to reform the US patent system and legislative attempts have inspired a ferocious debate on what that should look like.

Exemptions

Amin has also become concerned about pressure from the biotechnology and pharmaceutical industry to exempt biopharma patents from the inter partes review process. The Support Technology and Research for Our Nation’s Growth Patents Act (STRONG Act) includes a provision that would allow only those sued for infringement to challenge a patent at the Patent Trial and Appeal Board.

Another bill, the Innovation Act, which is sponsored by chairman of the House of Representatives Bob Goodlatte, includes a similar requirement. As a non-profit, I-MAK would be unlikely to face infringement claims, so its chances of challenging patents through this process would be reduced.

Reform is going in the wrong direction, where instead of tackling the real fundamental problems, the system is being gamed by biopharma companies, says Amin.

“This one-size-fits-all patent system doesn’t work,” he says, arguing that a diversified patent system that recognises novelty in each industry is perhaps a better solution.

The Sovaldi issue raises a bigger question about the relationship between patents and the cost of drugs. It is unquestionable that everybody wants to see the price of medicine come down, but companies must be afforded market exclusivity after conducting all of the research in order to incentivise them to develop life-saving (and other) drugs.

Simon Kremer, partner at IP attorneys firm Mewburn Ellis, says: “Do we as a society want to have drugs for conditions that need treatment? We probably do. Who is going to invent them and bring them to market? You have to incentivise people.”

As Kremer notes, companies will “not bring a drug to market if they do not have some period of exclusivity. That is the incentive society gives to get people to bring drugs to market”.

The question of how much a life sciences company charges for a drug is not for patent offices to answer. Although the pricing of some drugs has provoked a moral outrage among many, Kremer says this is a separate matter from the legal granting of patents.

“The EPO won’t take into account whether the patent monopoly is being used or misused in the pricing when considering if the application is valid—that just doesn’t come into it.”

IP offices are better suited to answering legal rather than moral questions; the level of inventiveness and other factors are what patent examiners are qualified to assess. But when patent offices grant ‘unfair’ monopolies then big concerns arise. For example, Amin says: “Prior publications show that the basic compound of the Sovaldi drug is all there in the art and therefore lacks the inventive step that it requires for protection.”

Companies such as Gilead, US politicians, generic companies and non-profits are all discussing the best way to balance the interests of patent owners and the affordability of life-saving drugs. A factor shaping this debate is the alleged failure of patent offices to fulfil their role of issuing patents that meet criteria including novelty and obviousness. When it comes to wrongly issuing patents for life-saving drugs, the results may be devastating.