| Why Big Pharma loves a patent war even when patients pay the price News of Natco Pharma filing six lawsuits against Novo Nordisk came as no surprise. The Hyderabad-based firm is arguing that its semaglutide version and delivery device don't infringe on the patents of the Danish pharma giant’s blockbuster weight-loss drug Wegovy. If successful, the lawsuit would pave the way for an early launch of its generic before the patent for the drug expires in India in March 2026. Natco’s action follows Dr Reddy’s challenge to the validity of Novo Nordisk’s secondary patent back in May, only to face a countersuit for infringement. It's a classic patent tango with Indian generics makers pushing for quicker entry, while the multinational innovator, which has already made $25 billion on the drug, digs in to protect its turf. |
| Over the last 40 years, ever since the passage of the Hatch-Waxman Act of 1984, which opened the doors to cheaper medicines, Big Pharma has deployed an arsenal of tactics to stall generics when the patent for a drug is nearing its end. The semaglutide case shows that India, the undisputed pharmacy of the world accounting for 20% global share in the export of generic drugs, is now on the frontlines of this battle. And it’s going to get messy since the system is rigged for monopoly profits, where delays mean billions for multinationals while keeping some medicines unaffordable for millions in markets like India. Big Pharma's playbook for delaying the entry of generics is as thick as their patent portfolios. One favorite is pay-for-delay settlements, where brand-name companies pay generics firms to postpone launches, effectively buying more monopoly time. Then there's evergreening: filing secondary patents on minor tweaks like formulations or delivery methods to extend exclusivity, creating patent thickets that generics must navigate like a legal minefield. It’s at the heart of Dr Reddy’s contest against Novo Nordisk. Other gems include product hopping - switching patients to slightly modified versions just as the generic for a drug looms. In most cases, litigation itself is a potent weapon since it can tie up challengers in court for years. From the standpoint of patients in markets like India, the impact of all this is severe. Take Novartis's infamous Glivec case. In 2006, a patent the Swiss firm sought for its leukemia drug was rejected by India’s patent office under a section of the Patents Act which bars evergreening on incremental changes. The Supreme Court upheld this in 2013, deeming it a minor modification without enhanced "therapeutic efficacy". That landmark ruling led to generic versions of the drug becoming available at 10% of the original price benefitting thousands of cancer patients in India. Similarly, in 2012, India's Controller of Patents granted Natco a compulsory licence to manufacture a generic version of Bayer's patented kidney and liver cancer drug, Nexavar, leading to a massive drop in its price, from an unaffordable Rs 2.8 lakh to Rs 8,800 monthly. With semaglutide too, the potential for impact is immense. India has over 254 million obese people and nearly 100 million diabetics. Generics of available drugs from Novo Nordisk and Eli Lilly could cut prices by 80%, making these weight-loss injections accessible to everyone. MNCs fight tooth and nail to hold back generics because the stakes are so high and the number of blockbuster drugs as a part of their overall portfolios are small. Novo Nordisk has reported investing well over $10 billion in developing its GLP-1 class of drugs, which includes semaglutide. The high price it charges reflects the amortized cost of innovation in a business where failure rates exceed 90%. Without this pricing model, companies argue, incentives for developing new treatments would diminish. While that may be true, it doesn’t alter the huge margins at which most of the large pharma companies operate. Branded drug companies (typical of Big Pharma) have 30-35% net margins. Much of that comes from their market dominance and patent protections, often at the expense of consumers. According to an FTC (US Federal Trade Commission) study, anticompetitive deals like pay-for-delay patent settlements cost American consumers and taxpayers $3.5 billion in higher drug costs every year. Earlier, these wars used to rage mainly in the US. Now, with semaglutide's patent expiring earlier in India (2026) than in the US (around 2032 due to extensions), the battleground has extended to India as well. Safeguards in the Patents Act give locals leverage, but are also contentious with MNCs lobbying for stricter IP and preparing to go to court for that. |
