Patenting activity in pharma sector strongest in China, finds Frost & Sullivan study

With growth rates in developed markets moving slowly downwards, emerging markets with higher growth rates are expected to be the key drivers of revenue growth for multinational pharma companies, finds a new report from Frost & Sullivan.

Among the BRIC countries, China leads in local and foreign patent filings, says the market research firm in its report, Strategic Overview of Patenting Activity in Pharma Sector of BRIC Countries. The increase in resident applications has accounted for almost all patenting growth in China in the last few years. Such a high percentage of resident filings, dominated by utility models, raise doubts about the quality of patents emerging from the nation, the firm says.

'As for non-resident patent applications in the BRIC region, Brazil leads, followed by India, Russia and China,' said Frost & Sullivan's TechVision Senior Consultant Manmohan Singh.

'In India and Brazil, big pharma companies dominate patent filings. However, the pace of patent grants in Brazil could drop, with the huge backlog of patent applications at the Brazilian Patent Office (INPI) lengthening the approval process to eight to 10 years.'

Among the BRIC countries, China leads in local and foreign patent filings

In the context of India, the Supreme Court's rejection of Novatis's patent application on the grounds of Section 3(d) of the Indian Patent Act raises a big question on the issue of 'evergreening' practices adopted by pharma companies, in which firms with patents over products that are about to expire retain royalties from them, by either taking out new patents, or by buying out or frustrating competitors, for longer periods of time than would normally be permissible under the law.

The term evergreening usually refers to threats made to competitors about a brand-name manufacturer's tactical use of pharmaceutical patents (including over uses, delivery systems and even packaging), not to extension of any particular patent over an active product ingredient.

Also, after India's decision to award compulsory licensing (CL) to Natco for Nexavar, which was patented by Bayer Healthcare, Big pharma companies are raising concerns surrounding the possible adverse impact of this decision on innovator drug companies.

'While more emerging economies deliberate whether to amend their patent laws on CL, the big pharma companies should rethink their existing business models,' said Singh.

'China has already made amendments in its intellectual property laws in order to allow the government to issue compulsory licences and Brazil is considering a similar initiative.'

Frost & Sullivan's report highlights patent filing trends and recent intellectual property policy-related developments in the pharma sector of BRIC countries. It also covers the business impact of these trends, along with estimates of local and foreign patent filings made in BRIC countries.