Indian board vetoes patent on AstraZeneca's Iressa

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Indian patent authorities dealt another patent setback to Big Pharma. The patent appeals board rejected AstraZeneca's ($AZN) bid for IP protections on its cancer drug Iressa. The failed appeal is just the latest for foreign drugmakers, which have found India increasingly unfriendly to patent protections on their products.

The country's Intellectual Property Appellate Board upheld a 2007 decision to withhold patent protection for the drug, used to treat non-small cell lung cancer. Patent officials determined that Iressa had "known prior use" and thus wasn't inventive enough to deserve a monopoly.

Indian patent law was designed to restrict patents on reformulations of existing drugs. It's this lack-of-invention judgment that spawned a years-long fight between Novartis ($NVS) and the Indian government, over a patent on the cancer treatment Gleevec, also known as Glivec. Patent officials cited similar concerns in yanking Roche's ($RHHBY) 6-year-old patent on the hepatitis C treatment Pegasys--which, ironically enough, was the first foreign drug to win protection under India's patent reforms. And in pulling Pfizer's ($PFE) IP protection on its cancer drug Sutent, a patent official last month cited the lack of "any inventive step" in the patent claim.

Meanwhile, of course, Bayer has been fighting a compulsory license on its cancer treatment Nexavar. The government forced the German drugmaker to license the drug to locally based Natco Pharma, which rolled out a version at a fraction of Bayer's branded price. The government has said it's willing to grant more compulsory licenses, and Natco and other domestic drugmakers have said they'll look for opportunities.

All this wrangling over patents has dampened Big Pharma's enthusiasm for the Indian market. Until recently, the country was among the most promising drug markets on the globe, with a growing middle class and healthcare reforms feeding big growth projections. But that confidence--built in part on the patent law that attracted pharma investment in India in the first place--is eroding.

The patent lamentations aren't universal however; last month, GlaxoSmithKline ($GSK) CEO Andrew Witty told Indian media that pharma needs a different sort of pricing strategy in developing markets to ensure access to drugs. But, he said, IP protections are important, too.

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