Opportunities and challenges in the search for new medicines

In Lilly's latest offering, Douglas K. Norman discusses how the rate of research and development of innovative medicines is being affected by the weakening of pharmaceutical patent laws in countries, such as India and Canada.

For research-based pharmaceutical companies, the quest to discover new medicines feels like a modern version of A Tale of Two Cities – it is the best of times, it is the worst of times.

A record 5,000 potential new medicines are currently being evaluated in human testing, which could soon usher in an era of personalized medicine and novel treatments. Innovative public-private partnerships are paving the way for new research into chronic and neglected diseases, and fueling historic progress against infectious killers like HIV/AIDS, TB and malaria.

At the same time, pharmaceutical patent laws – a critical component of these gains – face an array of challenges in key markets. India, China and South Africa have recently introduced new legislation or executed judgments to invalidate and restrict patents on innovative medicines. And perhaps most troubling of all, approximately 20 pharmaceutical patents have been successfully challenged in Canadian courts since 2005.

Weakening laws that protect drug discovery makes a happy ending unlikely for patients, as investors could retreat from the search for new treatments and cures. Lest we forget, every medicine on the shelf represents a billion-dollar investment over 10 years – a big risk that only gets bigger without reliable patent protections. A closer look at what's happening in Canada and India clearly shows the problem.

Canada creates a catch-22 for pharmaceutical companies

Canada's patent actions are concerning for several reasons. Canada, of course, is a highly developed country that doesn't face the degree of budget challenges or public health emergencies that low- and middle-income countries often cite to justify breaking patents. Furthermore, its legal regression has occurred not as a matter of national policy, but through a series of federal court decisions since 2005. The 20 medicines in question were all approved as safe and effective by Canada's national health agency, and widely used in the country.

Since 2005, individual judges have arbitrarily created – and retroactively applied – a divergent standard for what is considered "useful" and worthy of patent protection. It's commonly known as the "Promise of the Patent Doctrine".

This is how it has happened in sum. In order to file a patent, Canada conventionally requires that the invention be novel, not obvious, and useful, and that the inventor predict how it will be used. When patents awarded on this basis were challenged in court, some Canadian judges decided to reassess the drug's usefulness against the "promise" that was implied by all of the information in the original patent application. They determined that the "promise" of the patent was not fulfilled – and the patent therefore not useful and invalid – permitting competitors to market generic copies of the treatments (ironically, generic manufacturers have been happy to produce copies of medicines whose patents have otherwise been labeled "unuseful.")

"Canada's patent actions are concerning for several reasons."

Many multinational pharmaceutical companies operating in Canada have been affected. Judgments have been made against patents held by Pfizer, Merck, Sanofi-Aventis, GlaxoSmithKline, AstraZeneca, Novartis and Lilly, costing billions in revenue and hundreds or even thousands of jobs. Lilly recently filed a Notice of Arbitration in Canada to address hundreds of millions of dollars lost.

Most concerning of all, Canada's drift towards the "Promise of the Patent Doctrine" imperils R&D investment by creating a catch-22 for pharmaceutical companies. The standard pits two fundamental patent requirements – that an invention be both new and useful – against each other.

In order to demonstrate that a treatment is truly useful to this standard, extensive phase II human clinical trials must be conducted. By law, that information must also be made public. Without the legal protections afforded by a patent, this means handing pivotal data to competitors, who could then scoop the invention in another country. This effectively makes the acquisition and maintenance of a new drug patent impossible in Canada. If every country started applying the "Promise of the Patent Doctrine", the search for new medicines would grind to a halt.

India: patent problems, investor flight

India continues to prove a challenging partner in the search for new medicines. Its government has long pursued policies that reduce treatment costs by revoking or rejecting patents on innovative treatments. Today, 9 out of 10 medicines sold in this $13 billion market are generics, compared to only 20 percent in Brazil.

"It's hard to imagine an agenda that does more to discourage the search for new medicines."

This year has been marked by a particularly aggressive assault on patents, with a cascade of Supreme Court decisions weakening and invalidating drug patents held by multinational pharmaceutical companies – most notably Pfizer, Novartis and Bayer – and the granting of compulsory licenses to Indian companies, allowing them to sell generic copies of these drugs in the country. At the same time, India's Prime Minister, Manmohan Singh, has tasked his government with devising new legislation to protect discoveries made by Indian drug companies, and to make it more difficult for multinational firms to invest in India's R&D operations.

It's hard to imagine an agenda that does more to discourage the search for new medicines. After losing the costly seven-year battle to secure a patent for Glivec, Novartis announced that it would promptly reroute its R&D investments from India to countries with stronger patent laws and a friendlier climate for foreign direct investment. Other companies have expressed frustration with India's race to the bottom on patent protections and may well follow suit.

India and Canada are only a few of the countries actively weakening patent laws for innovative medicines around the world. It's a dangerous trend that can and must be reversed. A Tale of Two Cities has a famously unhappy ending, but there's no reason the search for new medicines should be doomed to the same fate. Pharmaceutical R&D pipelines are brimming with potential, and avenues for global health partnerships are multiplying every year. Strong, predictable patent protections will ensure that we continue to deliver on these opportunities and improve patient health long into the future.

The next Eli Lilly & Co article will be published in October.

About the author:

Douglas K. Norman is Vice President and General Patent Counsel for Eli Lilly and Company in Indianapolis. He received his B.S. in Microbiology from Indiana University in 1981 and his J.D., cum laude, from the Indiana University School of Law – Indianapolis in 1988. Mr. Norman's practice has included many aspects of patent law, including procurement, licensing, and litigation.

He is a member of the Board of Intellectual Property Owner's Association, recently having served as President and where he has also served as Treasurer from 2008-2009, as Chair of the Amicus Committee from 2003 through 2005 and as Chair of the Annual Meeting in 2006. He is also a member of Interpat. Mr. Norman is currently Chair of the National Association of Manufacturer's subcommittee for Intellectual Property. He was the 2002 co-Chair of the Intellectual Property and Anti-Trust Task Force for the United States Council for International Business and served from 2002 through 2006 as the Chair of the Intellectual Property Task Force for PhRMA. He is also the current chair of the PhRMA Intellectual Property Staff working Group.

What will happen to the discovery of innovative medicines if countries continue to weaken patent laws?