Balancing Innovation Protection and Affordability

Felicity Thomas

Editor of Pharmaceutical Technology Europe

Although a necessity, companies must strike a critical balance between protecting innovations with IP and providing affordable access to medicines.

When seeking to develop a biopharmaceutical product, success is never assured irrespective of the costs that have been employed in R&D. As reported by the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), only a fifth of biopharmaceutical products ever manage to make a return on the direct R&D investments (1). Therefore, intellectual property (IP) is both a useful and critical tool to help innovators overcome the risks associated with any research project that may not reach market and protect their innovations.

To learn more about IP in the biopharmaceutical industry, the potential impact the COVID-19 pandemic may be making on IP in the sector, common mistakes and best practices, and future trends for companies to keep an eye on, Pharmaceutical Technology spoke with Anjum Swaroop, vice-president and head—Intellectual Property, Dr. Reddy’s Laboratories.

Protecting innovation

PharmTech: What is the importance and necessity of IP in the biopharmaceutical sector?

Swaroop (Dr. Reddy’s): Biopharmaceutical companies develop pharmaceutical drugs from biological sources and can discover and develop new treatments or new approaches to treating diseases using complex biologic products. Biologics have offered patients new therapies in managing various chronic diseases. All forms of drug development, including generic drug development, utilize innovation to help overcome the scientific and regulatory requirements in place to provide safe and effective treatments. Of course, the biopharmaceutical sector relies very heavily on IP to protect that innovation.

Innovation is certainly important to pharmaceutical companies, such as Dr. Reddy’s, due to the robust R&D work that goes into many products. However, there must be a critical balance between incentivizing new drug discovery and development and increasing patient access to medications by offering low-cost alternatives.

Although biologics can be very effective in treating a variety of illnesses, their associated high costs, which can exceed one hundred thousand dollars per year, have resulted in a huge increase in prescription drug costs and limits patient access. Fortunately, more affordable options are becoming available in the form of biosimilars. Biosimilars are important because they give an opportunity for price-lowering competition in the market and expand patient access to treatments, as well as saving consumers and governments billions of dollars in health care expenses.

Impact of COVID-19

PharmTech: How has the current COVID-19 pandemic impacted IP in the global biopharma sector?

Swaroop (Dr. Reddy’s): The global biopharma sector, including others in the pharmaceutical industry, have risen to the challenge, as demonstrated by the unprecedented levels of cross-sector, cross-border industry-wide collaboration at all levels. At Dr. Reddy’s, for example, we doubled down on our commitment to customers and patients to deliver not only affordable medications, but also everyday products that help combat the pandemic.

This unprecedented level of rapid collaboration on multiple fronts has already and will continue to generate considerable IP. For now, during the ongoing health crisis, the biopharmaceutical industry seems aligned that public health and safety takes precedence over IP rights while the pandemic rages. At some point, I would expect companies to return to using IP to defend even COVID-19 related innovation, but first we must defeat the virus.

In addition, like all industries, the pandemic has changed the way people in the biopharmaceutical industry work. Over the past nine months, we have seen the widespread adoption of digital technology. We expect that the use of technology will continue to increase even after the immediate impacts of COVID-19 abate. I look forward to the growing use of new forms of digital technology, such as artificial intelligence, on top of traditional approaches to drug discovery and the IP that results from those efforts.

Patent litigation, which plays a central role in striking the balance between innovation and access, also has been impacted by the pandemic. Cases slowed as courts adapted to the pandemic, increasing uncertainty in the timing of resolution of IP disputes. Courts have done an admirable job moving to video and telephonic proceedings, and virtual bench trials have become more common. There is, however, a large backlog of trial proceedings involving a large number of parties and jury cases, and it will take time for the courts to catch up even after the pandemic.

Though I certainly miss out on the human interaction I had before the pandemic with my colleagues and our partners, there has been the much-needed reduced burden on the environment. There also has been tremendous savings as a result of near elimination of travel and increased use of digital technology—which I think will endure beyond the current crisis.

PharmTech: Could any potential changes in IP rules, as a result of the pandemic, negatively impact industry?

Swaroop (Dr. Reddy’s): I do not see long-term changes in IP rules that will negatively impact the industry globally. To the contrary, the industry has generated substantial goodwill by the rapid and collaborative way it responded to the pandemic at all levels—from the largest pharmaceutical companies to small biotechnology start-ups. As an industry, companies appear to be putting public health ahead of enforcement of IP rights. The industry seems to recognize that its efforts are better spent preventing and treating COVID-19. In some ways, this runs counter to the traditional drug development model where the IP incentives and protections that traditionally drive the industry forward appear less important to drive innovation to combat this health crisis. The considerable innovation we have seen to combat COVID-19 may be explained by the great demand that this emergency created, and IP protection may not be as critical because companies developing effective testing, treatments, equipment, and vaccines are indeed being compensated from governments, insurers, hospitals, and other members of the health care sector that are desperate for any assistance to slow or defeat the pandemic.

The pandemic may also lead to permanent changes in the processes used to resolve IP disputes. Prior to the pandemic, courts and lawyers were reluctant to embrace video conferencing technology, even though the technology has been available for years. The pandemic has forced the widespread adoption of video conference technology on the legal industry. Over the past nine-months, the vast majority of depositions and court proceedings have been conducted remotely. It is yet to be decided if the change is positive or negative. Like everyday life, video conferencing in legal proceedings is not a perfect substitute for the traditional in-person interactions. But the use of video conferencing has many benefits including reducing travel requirements, allowing in-house attorneys to more easily attend proceedings, and increasing opportunities for junior attorneys.

Common mistakes and best practices

PharmTech: What are some of the most common mistakes biopharma companies make in relation to IP? How can these mistakes be avoided?

Swaroop (Dr. Reddy’s): Decisions that are interpreted as elevating business considerations over patient health can be viewed as a mistake, particularly if they create a negative public perception of the biopharma industry. One instance of disappointment in the sector could be potential misuse of IP to delay market entry of legitimate competitors. Biopharma companies that have enjoyed many years, even decades of sales at high prices with no competition can be viewed as attempting to extend their monopolies using ongoing patent litigations. In contrast, the companies that manage the life cycles of their products by developing new and improved next-generation productions seem to be better positioned for long-term success.

From Dr. Reddy’s perspective, we believe the best way to obtain strong IP for innovation is to involve the legal and intellectual property team early and often in the planning, discovery, and development phases of research and development. Having IP professionals get involved in R&D projects early puts the company in the best position to develop an overall IP strategy for any R&D project. It also helps prevent last-minute scrambles to secure IP before some public disclosure, which happens frequently in the industry. Maintaining a global perspective is also essential. Different geographies have different rules and requirements for IP protection and offer different commercial perspective. To fully realize the value of any product, it is a good idea to plan an overall strategy for launches and IP on a global basis.

Future trends

PharmTech: Are there any trends you foresee as being critical for biopharma IP in the near future?

Swaroop (Dr. Reddy’s): Currently, there are several issues that are under watch. There is great uncertainty that will need to be resolved in the growing biologics and biosimilars markets. The practice of amassing large patent ‘thickets’—consisting of over 100 patents on a single product, including many patents with marginal importance—that create significant barriers for biosimilar manufactures is coming under increasing scrutiny as the demand for more access to affordable medicines increases.

Because of the developmental and regulatory hurdles and IP protection, biosimilars will probably always be more expensive than traditional generic drugs, but price reductions should continue as long as there are opportunities for more competition to enter the market. The resulting lower costs will have the beneficial result of improving patient access to these products towards the goal of better patient health.

There is also the ongoing debate with respect to improving affordability and access via mandatory reduction in the prices of biologics, possibly after an appropriate period of exclusivity protection. This debate will continue in the absence of sufficient political will to address such changes. The currently available approach of facilitating increased competition with pathways for approval of biosimilars should continue to be improved in order to increase patient access to this important health care sector.

One thing is certain, the industry and the world will be better prepared for the next global pandemic. There has been a huge uptake in digital technology that has in many respects increased connectivity within and among companies. We are also seeing unprecedented levels of collaboration within the industry that I expect to continue. After a year filled with challenges, Dr. Reddy’s—and the industry generally—has demonstrated tremendous resiliency by rapidly adapting to take on COVID-19 head on. I look forward to seeing the industry leverage that progress more broadly in the coming years.

References

1. IFPMA, “Boosting Innovation and Access: IP,” ipma.org [Accessed Jan. 10, 2021].