Impact of patent linkage on the healthcare industry

The introduction of product patents for pharmaceutical products post 2005 had a tremendous impact on India’s healthcare industry. Previously, the generics industry flourished and drugs were cheaper. The other factor impacting the healthcare industry is patent linkage, which delays the entry of generic drugs in the market. India’s Supreme Court, in a landmark judgment in December 2010, disallowed patent linkages, upholding Delhi High Court’s rejection of Bayer’s petition seeking patent linkage in India for its anticancer drug Nexaver (sorafenib tosylate).

Patent linkage is a system linking drug marketing approval to the patent status of the originator’s product, denying marketing approval to a generic version of a patented drug manufactured by a non-patentee prior to the expiration of the patent term, unless consented to by the patent owner.

Compulsory licensing and drug pricing of patented drugs could also impact access to healthcare. In a recent development the Intellectual Property Appellate Board (IPAB) passed an order on 4 March deciding on royalty to be granted by Natco to Bayer in relation to a compulsory licence. It will be interesting to see if the question of whether the IPAB overstepped its jurisdiction comes up when the case is heard in Bombay High Court.

Dr Rachna Bharadwaj is an associate at Krishna & Saurastri Associates and an advocate registered with the Bar Council of India.