The Indian biopharmaceutical industry is one of the fastest growing globally and is valued at $60 billion. Contributing to this is an increase in innovation — the country is now ranked 39th in the Global Innovation Index, up from 81 in 2015.
Biopharmaceuticals are medicines made from living cells, such as yeast and bacteria, as against conventional drugs that are made from chemicals. They have revolutionised the treatment of chronic diseases like cancer, diabetes, cardiovascular disease, and serious inflammatory autoimmune diseases. Biopharmaceuticals include biologics and biosimilars. Biosimilars refer to a biologic that is very similar to the one that has been cleared by the authorities for prescription by doctors. That is why they are also called follow-on biologics. They have the same efficacy, are as safe as the reference biologic and are used to treat the same disorders as the first biologic drug.
India is a pioneer in the global biosimilars market. It was the first country to approve a biosimilars product for Hepatitis B. Today, there are 98 approved biosimilars in India, with at least 50 in the market, the most in any country. Many India-made biosimilars have been approved in markets like the US.
The Indian biosimilars market was valued at $349 million in 2022 and is estimated to expand at a growth rate of 25.2 per cent per annum from 2022 to 2030 to reach $2,108 million by 2030. Between now and 2030, biologic products worth some $170 billion will lose patent protection. This will open a window of opportunity for Indian biopharma to launch more biosimilar products.
Under the Make in India Initiative, the Centre has launched the National Biopharma Mission (NBM) — an industry-academia collaborative mission managed by the Biotechnology Industry Research Assistance Council. This $250 million mission, co-funded by the World Bank, aims to accelerate biopharmaceutical development. It supports nearly 150 organisations and 300 MSMEs, with 21 shared infrastructure facilities established for research and biomanufacturing. These facilities were pivotal in the Covid-19 vaccine trials. They contribute to India’s long-term healthcare goals. NBM has supported over 200 grantees, resulting in 18 successful products. Despite these efforts, India has a mere 3 per cent share of the global biosimilar market. One of the biggest barriers faced by Indian biosimilar manufacturers is patent evergreening.
Patents encourage investment in drug development by offering 20 years of exclusive market access to its holder to recover their R&D investment. After the patent expires, biosimilars, lower-cost versions of the first drug, enter the market, driving down prices due to their reduced R&D and manufacturing costs. In some European countries, biosimilars have a nearly 100 per cent market share.
However, to extend exclusivity, patent holders indulge in patent evergreening, extending the period of a drug’s market monopoly. They do this when a patent’s life is coming to an end by making minor modifications, which allow them to block and delay entry of biosimilars, thus keeping prices high. For example, the multinational Roche extended the exclusivity of trastuzumab (Herceptin), a biologic used to treat breast cancer, by introducing a subcutaneous version just as the original patent was expiring. It is estimated that this strategy of “patent evergreening” costs the US healthcare system $700 million annually.
India’s patent legislation, particularly Section 3(d) of the Patents Act, 1970, aims to prevent “evergreening” by rejecting patents for small innovations that lack substantive improvement. Under this, Novartis’ patent application for the cancer drug Glivec (imatinib), used to treat leukaemia, was rejected as it did not show significant technical advancement. The decision, upheld by both the Madras High Court in 2005 and the Supreme Court in 2013, set a strong precedent against evergreening practices. Section 3(e) of the Act restricts patenting mixtures of known compounds unless a synergistic effect is proven, and Section 3(i) prevents patents on treatment methods.
Despite these legal safeguards, evergreening remains a challenge in launching affordable biosimilars as seen in the ongoing controversy surrounding pertuzumab, used to treat certain types of breast cancer. In India, due to its heavy disease burden, population density and lack of access to affordable medical care for a majority of the citizens, patent evergreening is a challenge.
Patent evergreening poses a significant threat to public health by impacting the accessibility and affordability of essential medicines. While India’s legal framework aims to curb such practices, recent studies reveal that around 72 per cent of granted pharmaceutical patents are minor or secondary. The need for stronger scrutiny and opposition is obvious.
In the US, 74 per cent of new patents are associated with existing drugs and nearly 80 per cent of the top 100 best-selling drugs have received patents, extending their monopoly beyond the initial patent’s duration. However, in the EU, the European Medicines Agency established biosimilar guidelines in 2005, with a more straightforward approval process compared to the US. Europe has seen significant biosimilar adoption, especially in Germany, the UK, and Nordic countries, leading to cost savings and better access.
To safeguard public health and promote genuine innovation, India needs to strengthen its patent opposition mechanisms, ensuring that the patent system serves its intended purpose rather than extending monopolies through minor modifications. Only then can all patients suffering from serious diseases like cancer, who require biopharma drugs, be assured of access to affordable biosimilars.
The writer is former chairman, Competition Commission of India, and former executive director, World Bank for India, Sri Lanka, Bangladesh and Bhutan. He is currently chairman of Competition Advisory Services India LLP. With inputs from Varun Singh.
