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Technology in Society 32 (2010) 324–330

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Technology in Society

journal homepage: www.elsevier .com/locate/ techsoc

Evergreening: A deceptive device in patent rights

Gaurav Dwivedi 1, Sharanabasava Hallihosur 1, Latha Rangan*,1

Department of Biotechnology, Indian Institute of Technology, Guwahati, Assam 781 039, India

Keywords:BrandingDrugsEvergreeningGenerics drugsPatentsPharmaceuticals

* Corresponding author. Tel.:þ91 (361)2582214; faE-mail addresses: lrangan@yahoo.com, lrangan@ii

1 This authors are contributed equally in this wo

0160-791X/$ – see front matter � 2010 Elsevier Ltddoi:10.1016/j.techsoc.2010.10.009

a b s t r a c t

Patents are the most important way by which inventors can protect their invention and theincome that might derive from innovations developed in return for the full disclosure thatenters into public domain after expiration of the patent term. In certain domains,monopolies over patent rights are being extended beyond the patent period, particularly inhigh-revenue-earning pharmaceutical sectors. This article presents evergreening strategiesthat are regularly employed by the giant branded pharmaceutical firms as a tactic tobypass existing patent laws and limit generic competition in the marketplace. The articleexamines the implications of evergreening for different stakeholders, including brandedand generic drug companies and consumers. Problems that arise due to evergreening arealso discussed. The frequency of such strategies necessitates strong patent interpretationsthat are protective of the spirit of patent laws.

� 2010 Elsevier Ltd. All rights reserved.

1. Introduction

A patent, in simple terms, is a temporary monopolyright granted by the government to the inventor for aninvention. The system strives to find a balance betweenreward for innovation and promotion of development byfacilitating dissemination of knowledge by disclosure. Thetemporary period of monopoly gives the inventor a chanceto profitably exploit his/her invention and thus provides anincentive for disclosure. This disclosure by itself, promotesfurther development. Upon expiration of the monopolyperiod others are free to practice the invention, whichagain is made easier by the disclosure.

Evergreening, although not a formal legal concept, isa term referring to the numerous ways in which patentowners of pharmaceutical products use the patent laws toextend their monopoly privileges beyond periods that arenormally allowed by law, particularly over high-revenue-earning drugs [1]. While most of these evergreeningstrategies conform to the letter of the law, very often they

x:þ91 (361)2582249.tg.ernet.in (L. Rangan).rk.

. All rights reserved.

seem to undermine the spirit in which patent laws werecreated.

For major pharmaceutical companies, revenues comeprimarily from one or two of their blockbuster drugs(defined as drugs producing revenues in excess of $1 billiona year), such as Lipitor and Celebrex from Pfizer and Allegrafrom Aventis. Having spent years of colossal investment,both in time and resources, the branded pharmaceuticalcompanies mobilize all their resources to reap the bountifulbenefits as their products move from “on the shelf” to “offthe shelf.” However, innovator organization can harnessthis opportunity only for 20 years, since after that theformula enters the generic arena and the price can declineby one-fifth of the initial. For instance, the sales of Capoten,manufactured by Bristol-Myers Squibb, plummeted from$146 million to $25 million within 12 months after theexpiration of its patent in the US [2]. The expiration ofa patent brings in its wake generic versions of the drugwhich make considerable inroads into the markets ofbrand-name drugs.

Therefore, it is important for the pharmaceutical compa-nies that the life cycleof theirdrugsbeprolongedtoasmuchaspossible. Developed economies with technological prowesstake this initiative for cutting-edge R&D and aim to create

G. Dwivedi et al. / Technology in Society 32 (2010) 324–330 325

a technology transfer of the generic formulas beyond geo/economical/political boundaries. Thus evergreening hasemerged as an important strategy among the major pharma-ceutical companies in the US and Canada for life- cyclemanagement of their products, in order to retain profits fromtheir drugs.

2. Patentability of a drug

Anunderstanding ofwhatmakes a drug fit to get a patentandwhat features in a drug canbepatented is essential for anunderstanding of the mechanics of evergreening. To qualifyfor a patent a drugmust, just like any other invention, satisfythe three basic criteria of novelty, of being non-obvious(manifested in the inventive step of the invention), and ofbeing industrially applicable. The inventor can patent theproduct (thedrug in this case), the process ofmanufacture, aswell as methods of use of the product. Although the criteriamight appear straight forward, the manner in which it isinterpreted and applied is of critical importance in decidingwhat is fit and what is not to be granted a patent. Probablynowhere is this brought out more clearly than in the case ofpharmaceuticals.

Traditionally, pharmaceutical companies filed patents foronly the primary properties of a drug, such as the activeingredient, primary use, formulation, processes and inter-mediates involved inmanufacturing thedrug.However, in thequest of sustained profits and market exclusivity, companiesnow file greater numbers of patents for a single product. Veryoften these patents cover an expansive number of uses,packaging of the drug, dosing regimen, dosing route, dosingrange,methodsof treatment, delivery systems, combinations,biological target, metabolites, polymorphic compounds,stereoisomers etc.

Clearly, the patent laws cover everything ranging fromcolour of the tablet to the process formaking it. In fact, evenmetabolites produced inside the body of the patient afteringesting the drug have been patented (US Patent No.4636499 and Patent No. 6150 365). With such latitude, theinventor can keep adding patents to the same product andextending his or her monopoly over the product.

3. Branded versus generic drugs

Patent law does not distinguish between inventionsconsisting of “brand new products” and inventions relatingto improvements; the same criteria for patentability apply.Taking the advantage of this existing loophole in patent law,not only those who develop an original product file patentapplications relating to developments or modifications oftheir products, many applications are also in fact filed byother companies, including generic companies. Thus, thepatent regulatory organizations have become an amphi-theatre for thebrandedandgenericmedicinemakers.Whilebranded companies advertise to customers and healthorganizations about their brand value and reliability, and trytocast generics negativelyon thebasis of poor replication, orunsatisfactory testing before commercial production of theoriginal formula, the capitalistic approach weakens theircase. However, the argument put forth by branded compa-nies is that they enable the development of a non-infringing

competitor product thereby channeling “designing around”the patent.

By allowing patents for secondary developments, thebranded companies not only fulfill the real goal of the patentsystem (patents as a reflection of technological progress) butalso encourage other companies to get engaged in innovation.This is where the battle for the regulatory and business rightsis being fought between the branded and generic medicinemakers for an undistributed market profits. In the case ofpharmaceuticals, there is a vested interestdthe genericpharmaceutical industrydpositioned to challenge badpatents. Brand makers have to undergo stringent field trialsfor new releases, while generic makers can avoid it byshowing promising replicas in terms of chemical standardsand benchmarks set by the brand makers. This disablesmalicious imitations of branded drugs and trusts new drugmanufacturers entering the market to diffuse the deterrencefrom expensive field trials. What is clear though is thatgovernment regulations in the different countries will deter-mine the extent to which pharmacies, doctors, hospitals andeven patients can exercise that choice- in some countries thegeneric version is mandated under certain circumstances.

4. Evergreening strategies

It is not surprising to note that the giant pharmaceuticalcompanies no longer wait for the expiry of their patent(s) tobegin the evergreening process. In order to extend theirmonopoly and control, strategies to extend patents andavoid generic competition are formulated as soon as theproduct is ready for patenting. These ‘strategies’ or “life cyclemanagement plans” include not only patent related strate-gies, but other practices of delaying or limiting genericcompetition in the market as well. This section discussessome common evergreening strategies, generally in contextof the pharmaceutical industry.

4.1. The 30 month stay provision

When a company makes a new drug, it must get regula-tory approval from the Food and Drug Administration (FDA)showing that the product is safe and effective by filing a NewDrug Application (NDA). This ensures that the drug can besold in the US. To protect against intellectual propertyinfringement, the makers go for patenting their product. Adrug approved by the FDA is listed in an FDA publicationcalled Approved Drug Products with Therapeutic Equiva-lenceEvaluations,more commonly referred to as the “OrangeBook”. Anynewpatents associatedwith thedrugmustalsobelisted by the drug maker in the Orange Book [3].

Under the 1984 Hatch-Waxman amendments to theFood, Drug and Cosmetics Act, a generic drug manufacturerwishing tomake generics of a brand-name drugmust file anAbbreviated New Drug Application (ANDA) with the FDA.The ANDA needs to satisfy the FDA that the generic is a bio-equivalent of the brand-name drug. Furthermore, thegenericmust not be in violation of any patents on the brand-name drug. To comply with this requirement, the genericmanufacturer must certify to at least one of the following:

G. Dwivedi et al. / Technology in Society 32 (2010) 324–330326

i) the drug has not been patented;ii) the patent has already expired;iii) the generic will not enter the market till the patent

expires;iv) the patent is invalid or will not be infringed by the

generic.

If the generic manufacturer certifies to the fourth option(called a “paragraph IV certification”) then it must imme-diately send a notice to the patent holder informing itsintent to market a generic. A paragraph IV certificationtriggers the right of the brand-name company to challengethe generic manufacturer in court within 45 days on thebasis that the generic is in violation of a patent listed in theOrange Book. This is where the catch lies: if the branddecides to litigate, the statute automatically prevents FDAapproval of the generic for 30 months or until the litigationis resolved or the patent lapses, whichever occurs first.

Companies havemisused this provisionandat timeshavegone to theextentof listingboguspatents in theOrangeBookto gain time by litigation. The problem here is that merelychallenging thegeneric in court gives thebrandanautomaticextension of two and a half years. The brand could litigatesaying that the generic violates one of the patents listed inthe Orange Book and get a 30 month extension, irrespectiveof whether the challenge was correct or whether the patentwas valid. In theory, with n number of patents listed in theOrangeBook, the brandcouldgoon litigating for 30nmonthsor till the patent lapses by initiating a separate litigation foreach listed patent. According to a US Federal TradeCommission (FTC) analysis, approximately 72% of brand-name companies took advantage of this provision [4].

4.1.1. A case study: Bristol-Myers Squibb and TaxolcBristol-Myers Squibb (BMS) sells paclitaxel, used to treat

ovarian, breast and lung cancer, under the brand-nameTaxol. Paclitaxel was developed by the National CancerInstitute and placed in the public domain and hence wasnot patentable. The drug was approved by the FDA inDecember, 1992. According to FDA regulations, BMS wasgiven a five-year market exclusivity over sales of paclitaxelas Taxol until December, 1997.

However, before expiration of the five-year period, BMSobtained two patents on paclitaxel for methods of admin-istering it as an anti-tumor agent and sought to extend thefive-year exclusivity [5]. Upon expiration of the five-yearterm in December 1997, a number of generics tried to enterthe market. BMS challenged many of them based on itspatents listed in the Orange Book and got an extendedmonopoly for 30 months after 1997. This prevented theentry of generics into the market until 2000 when the salesof Taxol peaked at $1.6 billion. Eventually the courts ruledthat the BMS patents were invalid, except for specific partswhich by themselves could not have blocked the entry ofgenerics into the market.

In June 2002 attorneys general of 29 US states fileda lawsuit against BMS alleging that in 2000 it started theprocess all over again by acting in collusion with a Cal-ifornia-based company, America BioScience. According tothe lawsuit, the two companies filed “sham” lawsuits withthe intent of further delaying the entry of generics into the

market, once again with the aid of the 30 month extension.The issue is still in court.

4.2. Patent strategies I – line extension

An area of rapid and well-publicized growth in 2005was the generic market, which grew by 13% in the top eightcountries to $55 billion. Along theway, generic prescriptionvolume surpassed branded volume for the first time in UShistory. As generic drug manufacturers became moreaggressive in their efforts to gain share in markets formerlydominated by branded products, companies with signifi-cant brand franchises tried to protect their revenues bygoing after line extensions, defending patents, and reallo-cating their product portfolios.

Apart from the primary patents on a drug, a manufac-turer can apply for more patents on the drug in order toextend its monopoly on the drug. This process is called“stockpiling.” Here, the brand-name companies “stockpiles”patent protection by obtaining separate 20-year patents onmultiple attributes of a single product. The expiration ofthese patents can extendmarket exclusivity by several yearsin addition to the period of the primary patent. Line exten-sion refers to such strategies where companies attempt tobuy additional period of exclusivity by gaining patents onmodifications to the drugs or their method of use.

One of the fundamental premises of the patent system isthat patents be granted to inventions that are original.Indeed, objections would be invalid to extension of patentsover inventions that are genuinely original. However, in thecontext of the pharmaceutical industry the emerging prac-tice is to protect a cluster of related technologies by filingsecondary applications even when these related technolo-gies are not entirely original or fit to be called inventions.What this effectively does is reset the clock on theprotectionperiod sustaining the market exclusivity for the drug.

As mentioned earlier, it is not unusual to patent suchaspects of a drug as packaging, dosing, methods of treat-ment, delivery systems, combinations, biological targetsetc. Upon ingestion of a drug the body might convert it tointo a metabolite which has the actual therapeutic effect.Some companies have even filed patents for these metab-olites with a view to stymie the introduction of genericsinto the market - since the metabolite is patented, anypatient consuming the generic and hence producing themetabolite in her body would be in violation of the patent.Some possible types of secondary patents are:

� Composition patents� Patents for new polymorphs� Patents for new formulations� Synthesis patents� Patents for new therapeutic regimes� Patents for metabolites or pro drugs, etc.

4.2.1. A case study: Pfizer and ViagraIn 1991 and 1992 Pfizer obtained patents on a series of

compounds which acted as selective inhibitors of phospho-diesterases (PDEs). The patented compounds included

G. Dwivedi et al. / Technology in Society 32 (2010) 324–330 327

sildenafil citrate, marketed by Pfizer under the brand-nameViagra. The patents stated that these compoundswere usefulin the treatment of angina and hypertension. Subsequently,several research articles were published in 1992 and 1993suggesting that PDE inhibitors could be useful in the treat-ment of impotence and male erectile dysfunction (MED)[6,7]. Pfizer followed this by filing for new patents in 1994which covered the same compounds patented in 1991 and1992 but claiming that these products could be used to treatimpotence and MED (US Patent No. 6469012). The claimstated that this use had been found “unexpectedly” and hadthe added advantage of being administeredorally as opposedto existing medication which needed to be injected.

Lily ICOS, a joint venture of ICOS Corporation and Eli Lilly,challenged this patent arguing that in view of the articlespublished in 1992–1993 the invention was invalid for obvi-ousness. Pfizer defended by saying that the patent wasinventive in the respect that the articles did not suggest thecompounds as an oral treatment.

The matter reached the courts in November, 2000. Thejudge found that the only difference between prior art andthe claims was the suggestion of oral use, which did notconstitute inventiveness. He declared the patent invalid.When Pfizer appealed against the decision, the Court ofAppeal upheld the decision. The court observed that whilethere was reason to doubt that PDEs could administer orallyto treat impotence and MED, simply deciding to try it outwas not inventive. Moreover, there was nothing in thespecification which suggested that there were any difficul-ties in oral administration which needed to be overcome byadapting the compound for oral use. Itwas obvious to tryandany skilled person carrying out routine procedures wouldhave been successful.

4.3. Patent strategies II – franchise extension to successordrugs

The struggle between the brand and generics now hastaken a leap beyond. Brand makers are extending theirpatents beyond the expiration dates by creating euphoriaabout themost original and enhanced drug effects based onbrand reliance and constant improvisation in the chemicalcompositionwhich they ought to get it re-patented, thus aneffort to curtail the generics entering the market. Thisstrategy of “patent to patent” is being used to retain marketshares by presenting consumers with a new, supposedlyimproved, drug line to replace the original drug whosepatent is about toexpire. This kindof switchingof patients tothe new drug line minimizes market share loss by attritionof consumers and at the same time dissuades generic drugmanufacturers from entering the market with a generic forthe original drug since most patients have already transi-tioned to the new drug. Obviously, such a large scale fran-chise extension requires promotion on a gargantuan scale.Companies invest huge amounts of money to launchmassive campaigns to popularize the successor drug amongpatients. Doctors’ offices are flooded with sales represen-tatives offering themgifts ofmoneyand kind for prescribingtheir drug. Sadly, veryoften these successor drugs offer littleor no advantage over the original drug. But invariably the

advertisement campaigns do succeed in convincing bothpatients and doctors otherwise.

A number of countries now provide for extended patentterms for pharmaceuticals. These include Australia, Japan,Korea, Israel, the United States, and the member states ofthe European Union. Although there are no internationallyagreed standards for patent term extension, the provisionsfor patent term extension in those countries that providefor it contain some common features:

� Extension is not automatic; the patent owner mustmake a specific application;

� The length of the extension granted depends on thelength of time between the date of filing of the patentapplication and the date of marketing approval;

� A maximum extension of 5 years is provided for;� The rights of the patent owner in respect of the patent

are usually limited during the extended term comparedwith the rights available during the original term.

Although some countries do provide for patent termextension for pharmaceuticals,manycountries donot. Theseinclude Argentina, Brazil, Canada, China, Colombia, Ecuador,Hungary, India, Malaysia, Peru, South Africa and Venezuela.

4.3.1. A case study: AstraZeneca and PrilosecOmeprazole is proton pump inhibitor used in the treat-

ment of dyspepsia, peptic ulcer and gastroesophageal refluxdisease. It was patented by AstraZeneca which marketed itunder the brand-name Prilosec (US Patent No. 6090827). Itis one of the best selling prescription drugs in history andtowards the last five-years of its patent, which expired inApril 2001, its sales amounted to about $26 billion.

Prilosec is a racemate containing equal quantities of boththe S and R enantiomers. In most patients, except those thatare “poor metabolizers”, the racemate undergoes a chiralshift in vivo to form the S enantiomer, which is the activeform of the drug. Before the patent on Prilosec could lapseAstraZeneca developed a new drug branded Nexium whichwas nothing but the S enantiomer, or the active componentof Omeprazole. The company executives surmised that thisformulation could be more effective against erosive esoph-agitis as compared to Prilosec. The company sanctioned fourdifferent studies to compare the efficacy of Nexium withPrilosec in patients with this condition.

The four studies compared 20 mg of Prilosec againsta double dose of 40 mg of Nexium. The company justifiedthis by saying that it planned to seek approval for a 40 mgdose of Nexium against erosive esophagitis for whicha 20 mg dose of Prilosec is recommended. Of the fourstudies two concluded that Nexium did not surpass Priloseceven with this increased dose. However, two studies foundNexium better than Prilosec. The results of the favorablestudies were publishedwhile those of the other two studieswere not released.

There was one study comparing equal dosages of 20 mgfor both Prilosec and Nexium. No difference in healing rateswas found during the initial course of treatment. At the endof the eighth week Nexium seemed to outdo Prilosec onlymarginally - a healing rate of 90% against 87%. This study

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was used to convince doctors that Nexium was indeedbetter than Prilosec. Acting quickly, AstraZeneca got FDAapproval for Nexium in February, 2001 – a few monthsbefore the patent on Prilosecwas to expire. At the same timeAstraZeneca exploited the federal provision of pediatricexclusivity in the US which gives a six month extension onexisting market exclusivity for conducting tests on effec-tiveness of a drug on children. This extended the exclusivityof Prilosec fending off the generics for a further six months.

The extra time gained was used to campaign for thedrug. AstraZeneca launched one of the most massivemarketing campaigns in the history of the USA after it gotthe FDAapproval. The company spent $500million a year ondirect-to-consumer marketing, hospital discounts on thedrug, free samples for doctors and media advertising. Allthis effort resulted in a substantial fraction of the patientstransferring to Nexium. In 2001 alone the company trans-ferred 40% of Prilosec users to Nexium and managed a 9%growth in its gastrointestinal franchise (Fig. 1).

5. Effects of evergreening

When a drug goes off-patent and generic competitorsenter themarket, the price of the drug inevitably plummets.The lower price of the generic motivates most consumers toshift from the brand-name forerunner drug. When Gluco-phage, an oral antibiotic agent, went generic in late January2002, more than 80% of prescriptions were captured bygenerics within two months. The percentage rose to 90%within six months.

As stated earlier, most of the pharmaceutical giants earntheir major revenues from a couple of blockbuster drugs.A blockbuster drug losing itsmarket exclusivitymeans hugedrops in revenues for the company. Obviously, companieswant their monopoly on such drugs to sustain and ever-greening has emerged as major strategy towards this end.This section examines the implications of evergreening forthe stakeholders in the market of drugs.

120000

5.1. The branded drug company

Pharmaceutical companies invest billions of dollars indrug research. It is estimated that of every thousandpotential drugs screened, only four or five reach clinical

Sales $ millions

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Fig. 1. Transitioning Prilosec to Nexium.

trials and of those, only one is actually approved formarketing. With the odds stacked so heavily against them,it is reasonable for pharmaceutical companies to obtainmarket exclusivity rights and recover the costs of researchand further profits through appropriate pricing mecha-nisms. Problems arise when these companies attempt toexploit loopholes in the regulatory system to unduly extendtheir monopoly over the market in a bid to sustain theirrevenues. With an ever growing generic drugs industry(Fig. 2), such attempts by the branded drug industry havebecome even more aggressive.

At the same time, evergreening carries a high risk evenfor the company seeking to exploit it. Consider franchiseextension through successor drugs. Even if the successordrug is not an entirely new invention, its final approvaldoes entail all the steps from synthesizing the new drug toclinical testing. This means that the company still incurssubstantial costs in R&D of the successor drug. In sucha scenario, if the new drug lacks the expected level ofefficacy, is proven unsafe, fails to gain regulatory approvalfor some other reason or fails to sustain market shares ofthe original drug, then the company risks losing a lot ofmoney.

In 2002 Schering-Plough introduced Clarinex as a next-generation drug for Claritin. Things went wrong when theapproval of Clarinex by FDA got delayed and generics gota chance to enter themarket. A sufficient number of Claritinpatients could not shift to Clarinex, and Schering-Ploughfaced a double disappointment: Clarinex could not scalethe blockbuster status of Claritin, and because of genericsthe sales of Claritin plummeted from $3 billion to $300million in a short time (Fig. 3), even though Claritin wasconverted to an over-the-counter (OTC) drug.

Most evergreening strategies invariably involve lengthylitigation. Even though pharmaceuticalmajors are in a betterposition to litigate than most generic drug manufacturers, itis definitely a financial burden. The practice has grown tosuch proportions that branded drug companies have startedcomplaining about the costs of litigation involved in disputesover multiple patents. In any case, when evergreeningstrategiesarewellplanned inadvance theyseemtoworkwellfor branded drug manufacturing companies.

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

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Fig. 2. Global generics market growth, 1998–2008. Source: <http://www.reportbuyer.com/pharma_healthcare/generic_drugs/global_generics_industry_report_1.html>.

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Fig. 3. Claritin/Clarinex sales, 1999–2004. Source: <http://answers.google.com/answers/threadview/id/769219.html>.

G. Dwivedi et al. / Technology in Society 32 (2010) 324–330 329

5.2. Generic drug companies

The generic drug industry has grown steadily overa period of time and almost doubled in the period 1998–2008 (refer back to Fig. 2). In 2005, with more than $40billion in annual drug sales, the generics accounted formore than 50% of all the prescriptions filled in the US. Yetthe generics industry’s spending on drug discovery,development and commercialization is less than a quarterof the whole.

Because of far less spending on R&D, the generic drugmanufacturers are able to offer drugs at prices lower thanbrand-name drugs. A generic usually sells at a price 30%lesser than the brand-name drug. Consequently, thegenerics substantially erode the market share of the brand-name drugs, triggering the branded drug companies tostart aggressive evergreening.

Another important reason to take a closer look at thispractice is the huge othermarket that generics cater to: poorand underdeveloped countries. Cheap copies of these costlydrugs are essential to save lives there. Often giant pharma-ceutical companies, with their superior resources, rely onlitigation to extend their market exclusivity. The smallergeneric drug manufacturing companies are severely handi-capped by the heavy costs involved in litigation. A smallgeneric drug company cannot hope to take on a massivemultinational pharmaceutical company in a lawsuit, leavinglittle or no option for the generic company. Moreover, thedelay caused by litigation means all the more time for thebranded manufacturer to monopolize the market and losttime for the generic manufacturer.

Evergreening through patent strategies allows thebranded drug company to retain its exclusive right tomarket the drug. Secondary patents thus act as a “barrier”to generic competitors. This essentially forces the genericmanufacturer to choose between the options of simplywaiting for all the patents to expire or enter into a legalbattle and risk the associated costs and delays. Some mightargue that the much stricter global intellectual propertyregime that we have since 2005 will adversely affect the

generic players. To the contrary, it also means that globaldrug majors are now less likely to get away with ever-greening. With more and more blockbuster drugs sched-uled to go off-patent in the near future, generic playershave a lot to look forward to.

5.3. The consumer

In the battle between the generic drug and the brandeddrug manufacturers, the consumer seems to be the biggestloser. Full-fledged generic competition between 5 and 6manufacturers typically leads to 70–80% lesser expenditureto the consumer. When the generic drug manufacturer isprevented from entering the market the patient is left withno option but to stick to the highly priced brand-namedrug. Moreover, the branded drug manufacturers shouldstrive to educate the consumer about the reasons fora higher cost of the drug even after expiry of the monopolyperiod. A conscious consumer will not overlook importantparameters like quality and safety over price.

Great injustice is done to the consumer when ever-greening is done through patenting strategies involvingsupposedly improved successor drugs that can be barelycalled improvements. When the consumer could have optedfor cheaper generic drugs, pharmaceutical giants misleadher into transferring to the more expensive successor drug.Thus the consumer unwittingly continues to serve theinterests of the pharmaceutical company through the highlypriced drug when a generic equivalent could have beenobtained at a lower price.

6. The spirit of patent laws and healthy competition

The current practices of evergreening are clearly inconflict with the intended purpose of patent which is not somuch to protect the inventor as to promote developmentthrough creativity. Evidently, evergreening practicesundermine this noble intent of the patent laws by utilizingloopholes in the existing regulation. Companies attempt toprolong their monopoly by filing patents for aspects thatcan be hardly called invention. Minor modifications, newuses of existing drugs and even new dosage regimes areoften used to extend patents. Such practices, although incompliance with the law, are against the spirit of the patentlaws. An important reason behind the existence of patentlaws for a limited period is to ensure that there is always anincentive to innovate. Companies should channel theirefforts towards productive research and development tocome up with new, effective drugs by the time theirblockbuster products’ patents expire. Furthermore,exploiting lacunae in patent regulations to keep genericsout of the market is not only against the interests of theconsumer but also extremely anti-competitive.

In response to evergreening, patent extension has beentoughened in Europe. The rate of patent refusal hasincreased. The European patent office received 146,600applications in 2008 compared to 141,400 in 2007. This3.6% increase would have been encouraging, but for thatfact that the percentage of rejected patents went up to 50%from 49.5% previously. European patent officials are also

G. Dwivedi et al. / Technology in Society 32 (2010) 324–330330

initiated investigations over allegations of anti-competitivepractices.

7. Conclusion

Pharmaceutical companies pumping large amounts ofmoney into drug development expect proportionateprofits in return, and they are right in doing so. Thisopportunity is sufficiently provided to them by protectionthrough patents and market exclusivity rights which,coupled with appropriate pricing strategies, shouldrecover research costs and profits due to the shareholdersof the company. Often companies seek to extend thismonopoly over unduly long periods of time by ever-greening strategies ranging from aggressive litigation toresourceful manipulation of patent laws. Such strategies,although in compliance with the law, are in sharpcontravention of the interests of healthy competition, spiritof patent laws, generic drug manufacturers’ interests andabove all the interests of the consumer. The pervasivenessof such strategies necessitates constant review of existingregulation to check loopholes that can be exploited. It isironic that countries like US and Canada that are worst hitby evergreening practices, have laws to the contrary thatrequire manufacturers to notify the original brand-namepatent holders of their intention to market copies at theexpiry of the original patent.

We need a strong patent protection regime, which canclearly distinguish between frivolous patents and theincrement inventions, which will put an end to ever-greening. The legal systemmust also be made aware of thestrategies being used, so that the courts can give speedydecisions. In most cases, it takes years for the legalentanglements to be completely resolved and the brand-name companies get artificially extended period justbecause of this delay in justice. The whole issue is veryaptly summarized by Greg Perry, Director General ofEuropean Generic Medicines Association in the followinglines:

These practices beg the question ofwhether theymeet theintended purpose of pharmaceutical patent law. Moreimportantly, society must ask itself how much longer itis willing to subsidize pharmaceutical companiesthrough thehighpricesdemanded for theirproductswhenlower priced generic equivalent could be available. Strongprotection of intellectual property rights is essential tomaintaining continued progress in the developmentof new treatments. Current rules must be constantlyreviewed to eliminate the loopholeswhich undermine thefragile balance between legitimate IP rights and theimperative needs to ensure a continuous supply ofcompetitively-priced generic medicines.

8. Disclaimer

The opinions expressed in this article are exclusivelythose of the authors. They should not be considerednecessarily those of the institute or any particular organi-zation, or imply any commitment by the organization toany particular course of action.

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Gaurav Dwivedi is a doctoral student at the Georgia Institute of Technologyworking in the area of systems biology. He received his bachelor’s degree inBiotechnology from Indian Institute of Technology Guwahati [IITG] and wasawarded the Institute Silver Medal for graduating at the top of his class. Hisinterest lies in computational modeling and simulation of cellular processesandasanundergraduate studenthehasworkedondevelopingmodelsof cellsurface receptor dynamics and signal transduction.His currentwork focuseson modeling to understand redox regulation of signal transduction anddeveloping optimization methods for parameter estimation.

Sharanabasava Hallihosur is an Assistant Vaccine Technologist at Trans-lational Health Science and Technology Institute (THSTI) Gurgaon, India.Prior to joining at THSTI, He served as a Junior Technical Superintendent atIITGuwahati, India fromSept. 2003 to Jan. 2010.At IITapart fromhis routinelabwork hewas actively involved in research in IPR and Biotechnology andhis research work has been published in World Patent Information, FoodResearch International. Before joining IIT Guwahati he worked asa Research Assistant at National Centre for Cell Science [NCCS] Pune, IndiafromNov2001 to Sept 2003 andhis researchworkhas beenpublished as coauthor in Journal of Virology. He did Masters Degree in Biochemistry atGulbarga University, Gulbarga, India. He is a Registered Patent Agent, andfiled numbers of applications for grant of Patent at Indian Patent Office.

Dr. Latha Rangan is an Associate Professor at Department of Biotech-nology, IIT Guwahati since December, 2009. Her group tries to address theresearch questions in areas of biofuel, functional genomics, data miningand molecular systematics with special reference to bioresources ofNortheast India using an integrative approach. Dr Rangan has stronginterests in area of IPR, especially studying the dynamics of Biotechnologypatenting. Dr Rangan has given a series of lectures in areas of IPR atvarious School, Universities and Institutions within India. Her stronginclination towards the area enabled her to get a grant from MHRD, Indiato conduct a Regional workshop on IPR, first of its kind at IITG.