Title:- In the Changing World of Intellectual Property Rights:
Patentability and Market Exclusivity for Orphan Drugs
(First Week Report of Dissertation)
By:- Akriti Shukla
A03104424003
LLM. (IP) Section A.
Batch 2024-2025
Under the Supervision of
Dr. Santosh Kumar
Amity Law School,
Amity University Uttar Pradesh (AUUP)
Sector-125, Noida- 201301
“Intellectual property rights’ or ‘IPRs’ is a genetic name for patents, copyrights, trademarks, design
rights, trade secrets and other like rights. A comprehensive definition of the term ‘intellectual
property’ as including ‘the rights relating to- literary, artistic and scientific works- performances as
performing artists, phonograms and broadcasts- inventions in all fields of human endeavour- scientific
discoveries- industrial designs- trademarks, service marks and commercial names and designations-
protection against unfair competition, and all other rights resulting from intellectual activity in the
industrial, scientific, literary or artistic fields’.1
Intellectual property rights regimes have been gradually evolving over the last few decades especially
concerning pharmaceutical products. One of the significant topics of discussion in this expanding area
of the law is the patenting and market protection of orphan drugs—drugs for the treatment of orphan
diseases, which affect only a small number of patients. New orphan drugs bring about a new paradigm
in the IP law field whereby, issues of innovation, health, and market factors must be addressed.
Drug target, Orphan Drugs of the pharmaceutical industry with the help of Innovation and Regulation
Structure focus on the condition of the patient for taking medicine. The difficulties involved in the
development of the orphan drugs are therefore immense as they are diseases that affect less than two
hundred thousand people in the United States and due to the low market potential for these diseases,
do not attract enough attention from researchers. As a result, the issues of patent landscape and market
exclusivity for products emanating from the patents, which are key indicators of IP, are critical in
creating a favourable environment for innovation as well as dealing with the need for affordable
treatments.
Patent rights are intended to promote innovation by providing the inventor with the ownership of
invention of some limited time duration. But the guard that is placed on forms of IP protections
primarily the orphan drugs comes with another edge. On the one hand, strong IP rights drive drug
manufacturers to devote the significant amount of capital to perform R&D of ODRs because they
know they will be protected against competitive threats and will be able to generate more in sales due
to 2longer patent protection. For example, the development of treatments for rare diseases is
encouraged by the Orphan Drug Act in the
United States enacted in 1983, offering tax credits for biologic drugs plus, market exclusivity for
seven years after the FDA approves the products. These measures are designed to reduce the risks
embedded in the development of drugs for rare disease patients.
On the other hand, what optimal amount of IP protection might incentivize innovation is negated by
the fact that strong IP protection leads to high pricing for orphan drugs that patients cannot afford to
pay, hence restricted access to therapeutic necessities. These strong patent protection lead to the
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Law of Patents- with a special focus on Pharmaceuticals in India- Firoz Khadar
2.The Orphan Drug Act of 1983 established incentives for the development of drugs for rare diseases, including
tax credits for clinical research and a seven-year period of market exclusivity upon FDA approval, which allows
companies to maximize returns on their investment while addressing unmet medical needs (FDA, 2021).
3. A study published in the Journal of Pharmaceutical Policy and Practice highlights that while orphan drugs
have gained significant market protections, many remain unaffordable for patients, leading to a situation where
high prices conflict with the ethical obligation to provide accessible healthcare (Sullivan & Sethi, 2020).
privileging of profit-making over patient’s need for affordable drugs for an elongated market
monopoly. This has been exacerbated by a number of reasons including high costs of these
medications, thus put ting many patients out of reach of these medications, thereby raising some
ethical issues about the profit based health care systems. This gives the system a tension between
innovation and accessible accessibility that needs to be discussed in depth.
The recent debate of patents associated with IP rights have raised concerns on the necessity of a
review of current protection offered to orphan drugs. Others have explained that there is significant
reality for widening rivalry can help decrease the cost of drugs, and therefore increase access to
therapies. However, this war game approach raises the specter of discouraging pharmaceutical firms
from venturing out to research on orphan drugs and increase the challenges in the treatment of the
corresponding rare diseases. Hence the need to establish the impact of changing IP regimes within the
framework of orphan drugs in form of comparing the gains in innovation against the costs of
availability of treatments for the rare diseases.
The purpose of this paper is to examine this new world of intellectual property rights regarding
orphan drugs more particularly on analysing the impact of patentability, market 3exclusivity,
innovation incentives and treatment access. The findings of this study will therefore provide a clearer
understanding of how IP reforms affect the supply of orphan drugs globally and where in the IP
spectrum key decision makers in the field should direct governments in the future in efforts to strike
the fine line between encouraging the discovery of new orphan drugs and helping the millions of
patients in countries around the globe gain affordable access to new existing treatments.
4. Recent literature emphasizes the need for a balanced approach to IP rights that encourages innovation while
also facilitating market entry for generic versions of orphan drugs to promote competition and lower prices (Liu
et al., 2022).
5. Critics argue that excessive reductions in IP protections may deter pharmaceutical companies from investing
in orphan drug development, potentially leading to fewer new treatments for rare diseases and worsening public
health outcomes (Chaudhuri & Shankar, 2021).
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Chapter 2:-
Historical Background and Context
2.1. Development of Intellectual Property Rights:-
The following part of the current paper is devoted to a brief overview of the historical evolution of the
patent systems and their contribution to the advancement of pharmaceutical industries.
Development of the intellectual property, especially patents, that has formed a backbone of the
pharmaceutical industry cannot be overemphasized. This section reviews patent systems historically
and analyses their achievements and impacts for the pharmaceutical industry evolution, as well as
their roles in maintaining an optimal ratio between the inducements to create and invent and the
public’s right to use necessary medications.
Patent systems’ historical background:-
Leading back to the late medieval period there is evidence of early precedence of the patent laws as a
sort of intellectual property protection. Thus, in 1474 Venice was the first country to passes known
patent law that gave inventor and his heirs for a limited period of time monopoly in the use of a
product. This early framework was designed to provide incentives through which inventors could be
sure to gain considerably from the fruits of their creation. Many nations over the years first developed
national traditions of patent protection, which became the basis of a more standard and recognized
pattern worldwide.
The USPTO began its operations in 1790, and it can be taken as a starting point of the protection of
patents in United States. According to the U.S. Constitution, the congress has the power to provide for
the progress of science and useful arts by means of patents and copyrights to authors and inventors for
a limited period. This framework was aiming at establishing favourable environment for innovations
and technologies to be developed by inventors who could invest in researching and developing new
technologies without being bothered by theft of their inventions.
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Historical Institutional Development of Patent Systems in Pharmaceuticals:-
If we look at the publication and discovery the pharmaceutical science it was seen at the growth and
advancement in the 19th and the 20th century which was parallel to some advancement in the area of
patents. However, the introduction of synthetic drugs and subsequent discovery of antibiotics
6. F. M. Scherer, “The Economic Effects of the Patent System,” Journal of Law and Economics, vol. 25, no. 1,
1982, pp. 111-140.
7. U.S. Constitution, Article I, Section 8, Clause 8.
8. World Intellectual Property Organization (WIPO), “Paris Convention for the Protection of Industrial
Property,” 1883.
9. World Trade Organization (WTO), “Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS),” 1994.
(penicillin in the 1920s) forced the realization the pharmaceutical industries had to be supported by a
strong patent system in order to create incentives to innovate. It was important when the industry grew
more significantly patents concerning pharmaceutical products became more complex mainly due to
biopharmaceuticals and biotech in the late twentieth century.
To these developments, a number of nations start synchronizing their patent frameworks. The Paris
Convention for the Protection of Industrial Property signed in 1883 is one of the oldest agreements
providing for the same protection for patents within member states. Clearly this set the precedent for
future conventions that include the Agreement on Trade Related Aspects of Intellectual Property
Rights TRIPS that went into force in 1995. TRIPS set basic minimum standards of patent protection
insisting that member countries should provide patents to pharmaceutical inventions duration of not
less than 20 years.
Pharmaceutical innovation influences that are affected:-
Patent enforcement has been observed to have provided depth in progression inside the
pharmaceutical segment. Great IP protection encourages pharmaceutical industries to spend a large
portion of their resources on research and development knowing that they will be the only ones to use
the unique idea for a certain period. For instance, the high figure of cost required to bring on board a
new drug into the commercial market at over $2.6 billion increases the emphasis on IP protective
measures as a means through which the investing companies can recover the costs. Absent these
safeguards, the costs of creating new medications would probably discourage research, and patients
would suffer from a variety of diseases with limited treatments.
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Also, methods of achieving patents on compounds and active pharmaceutical ingredients,
formulations, and methods of treatment have given pharmaceutical firms exclusive control over
markets they have developed and therefore charge high prices relating to R&D costs. This exclusivity
is then continued through the formulation patent and other subsidiary patents on delivery systems that
push the time of market competition farther. However, the same has encouraged innovation while at
the same time brought some ethical issues on extensions of the cost of medications.
Seeking Innovations and Access:-
While IP rights as sources of innovation have in recent years become highly nuanced, tensions
between access to patents for new drugs and maintaining affordability of life-saving medications has
become a hot button issue. Sometimes the strength of protection of patent law has led to raise the
prices of many pharmaceutical products this has reached to the effect of inciting public uproar with
the hope of the government to change this laws. This problem is well illustrated by the high cost of
orphan drugs – pharmaceuticals designed for the treatment of highly uncommon diseases, with
patients struggling to obtain the medications despite the clearly vital need for those treatments.
To address these issues, several models have been put forward to restructure IP systems as they relate
to innovation. There are those proposing that drug prices should be dirt cheap for developing nations
and expensive for the developed nations as a way of increasing access for developing nations. Some
10. R. D. Frank, “Pharmaceutical Patent Protections: Implications for Drug Prices and Innovation,” Health
Affairs, vol. 36, no. 3, 2017, pp. 487-494.
11. R. M. J. Behrman et al., “The Price of Orphan Drugs: A Systematic Review of the Literature,”
Pharmaceutical Economics, vol. 34, no. 9, 2016, pp. 866-877.
for more effective polices on generic drugs and provisions on compulsory licensing through which the
governments can avoid the patents’ regulations, which is necessary in order to meet the population’s
demands.
Recent Developments and Future Directions:-
Recent dynamics in the Global health, particularly, the emergence of COVID19 has served to expose
a need to rethink the place of IP rights in pharmaceutical industry. The fast track to develop vaccines
and radical treatments that facilitate the provisions of health care has made the global community
appreciate the essence of cooperation and access and raised concerns on the potentials of patent
regime to enhance the public health. As the governments and 7multilateral organisations continue to
explore these questions, the evolution of IP regimes pertaining to pharmaceuticals will involve a
constant dispute on the right approach to encourage innovation, whilst not compromising on
availability of the medicines.
Thus, this paper emphasised that the history of the development of intellectual property rights
especially in patents has greatly influenced the contemporary pharmaceutical industry. Even though,
strong patent rights have increased innovation, and progress in drug technologies, the current
protection systems have put up hurdles in patient access to these drugs. That is why the problem of
maintaining a sustainable optimum in the future will be to balance the incentives to innovate with
public’s ability to afford essential medications.
2.2. Orphan Drugs: Definition and Importance:-
Definition of Orphan Drugs:-
Orphan drugs therefore refer to drugs developed to target diseases which are rare also known as
orphan diseases. These are often illnesses that only impact a tiny fraction of the world’s and a given
country’s population and in the United States, these diseases are considered to be orphan diseases;
diseases that are understood to affect populations of less than 200,000 people. In India this definition
matches to this criterion but the benchmark could slightly differ based on the regulatory norms.
According to the WHO, orphan diseases are those diseases that occur and affect less than one person
per two thousand global population.
The process of developing orphan drugs is also considered a challenging one because of the
difficulties connected with such diseases. They include issues of lower population of patients for trial,
high costs of clinical and R&D, and the generic risks of investing in therapeutic products that serve
small markets. Hence, the manufacture of orphan drugs appears not financially remunerative for the
pharmaceuticals companies in the absence of necessary incentives which have been put in place by
certain regulations and policies to encourage manufacture of such drugs.
Importance of Orphan Drugs in Treating Rare Diseases:-
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It is necessary to focus on the criteria defining orphan drugs as those exceptionally crucial when it
comes to the treatment of patients suffering from different rare diseases. These diseases frequently
12.T. H. W. R. G. Tran et al., “Global Health and COVID-19: Patents, Vaccines, and Access,” Global Health
Journal, vol. 5, no. 4, 2021, pp. 87-92.
13. 1. World Health Organization, “Global Report on Orphan Diseases,” 2020.
14. National Organization for Rare Disorders (NORD), “Rare Diseases: A Patient-Centered Perspective,” 2019.
15. A. R. Verma et al., “Rare Diseases in India: Challenges and Prospects,” Indian Journal of Medical Research,
vol. 152, no. 5, 2020, pp. 607-618.
cannot be treated or have only rudimentary treatment, which imposes a heavy load on the patients and
their families. There is an estimated existence of 7,000 diseases that rate an incidence of occurrence of
one in 2,000 people or less and approximately 50 million patients globally as proposed by National
Organization for Rare Disorders-NORD. Across the world, about 350 million people are believed to
live with rare diseases, and in India, as many as 70 million people are living with these illnesses,
where appropriate treatments are lacking.
Orphan drugs have the potential of improving patients’ outcomes and this is because these drugs take
a long time to be developed and approved. For example, the development of enzyme replacement
therapies for Lysosomal storage disorders has revolutionalized the care of some heretofore
devastating conditions such as Gaucher disease and Fabry disease, through which patients can now
live fuller, more productive lives. Furthermore, improved knowledge of genetic therapies; including
information on SMA has dramatically changed therapeutic approaches for such families.
Market Dynamics of Orphan Drugs:-
The overall market for orphan drugs has experienced significant growth over the past few years and is
expected to continue to grow in the future due to the greater investment in research and development
and the beneficial environments around the world. Evaluate Pharma in its recent report estimates that
the market for orphan drugs reached $176bn in 2013 and is forecasted to grow to $200bn by 2024 and
will make up 20% of the total pharmaceutical market. This growth may be traced to the increasing
number of approvals for orphan drugs, with the FDA approving forty-four orphan drugs in the year
2020, a higher number than in previous years.
Currently the market for orphan drugs is also on the rise in India. To this effect and given that India
has a large population with Rare Diseases the Indian government has recognized the need to have
specific policies target towards promotion of orphan drugs. From the year, 2021 the National Policy
for Rare Diseases was launched to invest in the research and development 9and to ensure patient
access to expensive therapies. Besides the mentioned independence of the national regulatory
authority and the government-recommended high prices for orphan drugs, new public-private
partnerships are being created to drive the development of orphan products and strengthen the
country’s biopharmaceutical research capacities.
However, there are some issues that still exist in the orphan drug sector even when the general market
environment is favourable. The abovementioned points can considerably limit the utilization of
orphan drugs as the product prices are too steep and affordable accessibility is a problem in the
developing world especially the country India. For example, the cost of some orphan drugs can range
from several lakhs per month, and such expensive drugs are unattainable to many families. This has
brought in demand for forward greater pricing strategies and policies to answer for efficient
distribution of orphan drugs amid different groups of culture.
In conclusion, the impulse to define orphan drugs as crucial in offsets a serious shortage of effective
medical services for patients suffering from rare diseases. Taking into account the current
developments in the international orphan drug market, players in India and the wider world need to
16. R. D. M. R. K. Chaudhary et al., “Emerging Trends in the Treatment of Orphan Diseases,” Journal of
Pharmacy and Pharmacognosy Research, vol. 8, no. 2, 2020, pp. 174-182.
17. EvaluatePharma, “World Preview 2024, Outlook to 2024,” 2020.
18. Indian Ministry of Health and Family Welfare, “National Policy for Rare Diseases 2021,” 2021.
19. A. P. Gupta et al., “Challenges in Accessing Orphan Drugs in India,” Indian Journal of Health Economics,
vol. 12, no. 1, 2021, pp. 23-29.
pay more attention to the creation and availability of such critical therapeutic products. Both
governments, pharmaceutical manufacturers, and healthcare facilities will continue to work in
combination to overcome the problems that are seen in orphan drugs development; mainly to ensure
that patients gain access to the treatments they require so urgently.
