India needs to adopt bold strategies

Gopakumar G Nair

The road from Doha of 2001 has been going downhill with regard to the issue of affordable access to essential lifesaving medicines. Para. 6 of the Doha Declaration which was received by much enthusiasm could not move forward to implementation in view of the tough procedures pronounced in 2003 by the General Council of WTO.

There is an understanding in place among member countries not to file any non-violation complaints until the TRIPs Agreement is revised and reviewed. Even otherwise under Art.27(3)(b) there is a clear agreement to review these provisions with four years of TRIPs Agreement becoming effective, i.e. 1999. No such review has taken place. In the meantime, the extension for implementation of TRIPs compliant patent regime by Least Developed Countries (LDCs) upto 2016 (granted at Doha) has further been extended to 2021, with a provision for further extension. However, it is indeed surprising that export of generic medicines to these countries (LDCs) have not been picking up as much as it should. This is partially because Indian pharma companies are unable to obtain and operate regulatory approvals such as drug licence for new drugs on the face of stiff litigation being pursued by innovator companies. Infringement suits initiated by innovator companies against smaller Indian pharma API and formulation companies, purely challenging attempts to obtain regulatory approval are pending for preliminary hearing even after two to five years with continuous adjournments. MNCs appear to be successfully ‘stretching out’ leading Indian pharma companies such as Cipla and Natco, through protracted litigations.

Sec.107-A(a)

Karthika Nair

Plethora of infringement litigations on frivolous grounds, such as applying for regulatory approval has been a deterrent. The Indian pharma companies have failed to avail the benefit under Sec. 107-A(a) adequately. It may be noted that (unlike in EU) India allows any act of making, constructing (using, selling or importing) a patented invention solely for uses reasonably related to the development and submission of information required under any law for the time being in force, in India or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product; in 107-A(a). The Indian Judiciary has not been appreciating the essence of the exception in Sec.107-A(a) and has been erroneously and irrationally upholding that drug approval from DCGI or FDA amounts to infringement, leading to arbitrary grant of injunctions, in spite of prior judgments, by Single Bench and Division Bench of High Courts which has been ratified by the Supreme Court.

Compulsory Licence under Sec.84

Compulsory Licence was granted to NATCO for Bayer’s drug ‘sorafenib tosylate’ which is sold under the name ‘Nexavar’. Sorafenib tosylate is a palliative drug for patients suffering from Renal Cell Carcinoma (RCC) and Hepato-Cellular Carcinoma (HCC) at stage IV. It is helpful in treating terminal cancer of kidney and liver. Of late, the indication for breast cancer is also under approval for sorafenib tosylate. Even though, Bayer’s patent for sorafenib was granted in 2008, as per details submitted by Bayer to Patent Office in Form 27 (Working of patents) as illustrated in the Table 1 below, the sorafenib dosage for (Nexavar) has only been imported and not worked in the territory of India. Further, the quantum of imports has been far too low compared to demand in the country. To add insult to injury, the price has been extremely exorbitant. Considering all these factors under Sec.83 (refer Table:2) and Sec.84 (refer Table:3) of Patents Act, 1970 the Compulsory Licence was granted to NATCO by the Controller General of Patents.

The General Principles applicable to working of patented inventions as illustrated in Table 2 are substantially reproduced from Art.7 and Art.8 of TRIPs and various provisions of Paris Convention.

For third parties to be eligible to apply for Compulsory Licence, the conditions as in Table 3 need to be met.

The compulsory licence for sorafenib has been granted on condition that NATCO will sell sorafenib tablets at Rs 8,800 for a month’s treatment, while Bayer’s price for the same unit dosage was Rs 2,80,428. The compulsory licence was granted to Natco with many conditions, as in Table – 4.

After NATCO’s sorafenib was officially launched in India, Bayer filed a contempt suit for invalidating the compulsory licence against NATCO alleging that NATCO has violated the terms by exporting the product. NATCO claims to have not exported the product themselves. In the meantime Bayer filed an appeal with the Intellectual property appellate Board (IPAB). IPAB after hearing both parties dismissed the appeal and confirmed the grant of compulsory licence to NATCO by the Controller General of Patents. IPAB, however, increased the quantum of royalty payable by NATCO ( which is fixed by the CGPDTM) from six per cent to seven per cent. This order has now been challenged through a writ petition by Bayer in the High Court of Bombay. From all indications, it appears that this compulsory licence case will also travel all the way upto the Supreme Court as in the case of Gleevec of Novartis. Future compulsory licence applicants may be watching the progress of these litigations. The high cost of litigation in India, which runs into crores, as in developed countries like the US, must be acting as a deterrent to future compulsory licence applications over and above the indecision from the Government of India to fully exploit the flexibilities enshrined in the Patents Act, 1970.

Compulsory Licence under Sec.92

The Hon’ble Union Minister of Commerce as well as Health as well as Secretaries have repeatedly been announcing that compulsory licence under Sec.92 is going to be granted. However, no such grant has taken place till date. Either there are only ‘crocodile tears’ or are being met with stiff resistance internally and externally due to overemphasis by legal circles that Sec.92 is only to be invoked under national emergency or extreme urgency. It is to be noted that compulsory licence can be granted under Sec.92 for ‘public non-commercial use’ also. In those cases of anticancer drugs, where the imports into India has been negligible as disclosed in Form 27 or where the imports have been coming down over the years in spite of increasing demand for such anti-cancer drugs, Sec.92 could well be invoked for grant of compulsory licence, under “public non-commercial use” clause.

Compulsory Licence under Sec.92-A

Doha had, once for all, declared that countries like India are free to exercise sovereign rights for healthcare and affordable access to medicines by adopting and using needful provisions. India has not been adequately exercising their rights to fulfill this objective. India has introduced Sec.92-A to enable India to cater to export orders from LDCs and other developing countries with no drug manufacturing facilities of their own, against a compulsory licence or government certified order from that importing country which is an LDC with no Patent Office. Even the 2003 procedure announced by the General Council of WTO for implementing compulsory licence under Para.6 of Doha is cumbersome and impractical, India should take a lead in granting compulsory licence under Sec.92-A more boldly and liberally, in view of the fact that it is agreed that no member country will approach the WTO DSB (Dispute Settlement Body) for any healthcare related patent violation. The export-oriented pharma companies from India should also take some initiatives to pursue this option and opportunity.

Sec.100 and 101

India has not given adequate attention to invoking Sec.100 and Sec.101 of the Patents Act, 1970. With the very large network of Government hospitals under ESIS, Defence, Zilla Parishads and rural health programmes, India government should be able to use provisions of Sec.100 and Sec.101 to make available lifesaving anti-cancer and other highly essential but unafforadably priced drugs, free to patients by getting the same manufactured by WHO-GMP compliant Indian pharma companies as per provisions of Sec.101, for free distribution.

Form 27 and working of patents

Patentees and assignees of many granted Indian patents relating to lifesaving medicines have not been providing serious response to the requirements of filing of Form 27 and making available details of working of patents in India. The Patent Office has made available the details on their official website (www.ipindia.nic.in). The Indian pharma companies should study this information and provide feedbacks or representations to enable Patent Office to revoke patents which are not worked or on which Form 27 are not filed. This will help eligible GMP compliant Indian pharma companies to introduce these lifesaving drugs at five per cent to 10 per cent of the imported price, which will help affordable access in abundance.

India needs to find a breakthrough for facilitating smooth availability of life saving medicines at affordable price.

The patent litigation costs, not only in imaginary or perceived infringement suits extending over four to five years and still remaining unheard or undecided, is running into crores. Compulsory licence cases are also following the trend of multi-stage appeals and writ petitions travelling all the way to higher courts. The Sec.92-A for exporting under compulsory licence is also made non-workable or impracticable by the circuitous procedures prescribed which are open-ended and not time bound. The global pharma giants and developed countries are moving outside TRIPs and WTO to restrict legitimate trade through ACTA (Anti-Counterfeiting Trade Agreement), TPP (Trans-Pacific Partnership) etc. and introducing new interpretations to ‘counterfeits’ as perceived or alleged patent infringing drugs, jeopardising generic pharma operations. TBTs (Technical Barriers to Trade) and NTBs (Non-Tariff Barriers to Trade) have become the order of the day. There is a moratorium on challenge in DSB (Dispute Settlement Body) relating to patents in healthcare issues. Art. 27(3)(b) which needed (‘shall’ be review) statutory review within four years from 1995 (1999 deadline) has not yet been undertaken. Under these circumstances, India needs to consider re-introducing ‘Licence of Right’ (refer to Table 5) in the Patents Act, 1970 and relating to patents for lifesaving medicines. This could generate some heat and dust and an outcry from the developed countries. However, it is worth at least a debate to evaluate the pros and cons.