Provision for Compulsory Licensing (CL) in India – some issues still need to be addressed.

Patent law systems provide for a provision for granting of compulsory licenses in a number of circumstances. Article 5A(2) of The Paris Convention, 1883 indicates that each contracting State may take legislative measures for the grant of compulsory licenses and reads as follows:“Each country of the Union shall have the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent, for example, failure to work.”TRIPS agreement also contains important public health safeguards provisions to allow countries to override TRIPS requirements by engaging in compulsory licensing under certain situations and circumstances. Globally all patent systems comply with the requirements of TRIPS.

Doha declaration:

Doha Declaration gives WTO member-countries the right to grant compulsory licences (CL) and the right to decide on the reasons upon which such licences are to be granted. The declaration also states that the TRIPS Agreement should be interpreted and implemented by the member-countries in a manner to protect public health and to promote access to medicines for all.

“Safeguards provision” in India:

The Indian Patent Act 2005 bestows enough power to the Controller General of Patents, Trademarks and Designs of India to issue compulsory licenses (CL) under following different sections of the Act:

1. Section 84:

This section prevents the abuse of patent as a monopoly and states that at any time after the expiration of three years from the date of grant of a patent, any interested person may make an application to the Indian Patent Office (IPO) for grant of compulsory licence on any of the following grounds:

(a) That the reasonable requirements of the public with respect to the patented invention have not been satisfied, or

(b) That the patented invention is not available to the public at a reasonably affordable price, or

(c) That the patented invention is not worked in the territory of India

Section 6 of section 84 states that in considering the application filed under this section, the controller shall take into account the following:

(i) The nature of the invention, the time which has elapsed since the sealing of the patent and the measures already taken by the patent or licensee to make full use of the invention;

(ii) The ability of the applicant to work the invention to the public advantage;

(iii) The capacity of the applicant to undertake the risk in providing capital and working the invention, if the application is granted;

(iv) Whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and conditions and such efforts have not been successful within a reasonable period as the Controller may deem fit:

Provided that this clause shall not be applicable in case of national emergencies or other circumstances of extreme urgency or in case of public non-commercial use or on establishment of a ground of anti-competitive practices adopted by the patentee.

Terms and conditions of CL will be determined by the Controller under section 90.

2. Sections 92 (1) and 92 (3):

These sections enable the Central Government to deal with circumstances of national emergency or circumstance of extreme urgency or in case of public non-commercial use by issuing CL.

3. Section 92 A:

This part enables grant of CL for export of patented pharmaceutical products in certain exceptional circumstances to any country having insufficient or no manufacturing capacity for the concerned product to address public health problems.

Some loose knots:

Some believe that there are still some loose knots in the CL provisions in India, which need to be tightened, immediately.

Granting CL for a Biopharmaceutical product could be an issue:

It will not be very easy to grant CL for a biopharmaceutical product as the conditions in which biopharmaceuticals are produced largely define the final product and its manufacturing process defines the product quality. Any alteration to the manufacturing process may result in a completely different product.

Therefore following are the main issues, which need to be urgently addressed:

• Small changes in the manufacture of biopharmaceutical and biosimilar medicinal products can dramatically affect the safety and efficacy of the therapeutic molecule.

• The very nature of a biologic means that it is practically impossible for two different manufacturers to manufacture two identical biopharmaceuticals if identical host expression systems, processes and equivalent technologies are not used. This has to be demonstrated in an extensive comparability program. Therefore a generic biopharmaceutical cannot possibly exist.

Substitution issues:

By contrasts with the situation applicable for generic chemical entities, biosimilar medicines can be “similar” but not “identical” to the innovator reference products. The “similar, but not identical” nature of biosimilar medicines means that substitution of the innovator product with a biosimilar product could have clinical consequences as patients could respond differently to the two products. To guarantee the efficacy and safety of biosimilar products, these products should only be approved following the submission of appropriate data generated with the biosimilar drug.

• Currently there are no published clear Indian guidelines for the approval of biosimilar drugs which will ensure the approval of efficacious and safe biosimilar drugs.

Some apprehensions on CL in India need to be addressed:

Some apprehensions have been expressed on possible misuse of CL and representations made to the government to address the following issues urgently. Tarceva and Stutent cases involving Nepal will probably justify such apprehensions:

o As the entire concept is based on “Working of Patents” in India, the term “Working of Patents” needs to be defined explicitly.

o Issuance of CL to be restricted to national emergency, extreme urgency and public non-commercial use

o Provisions in (Sec. 84 [7]) needs to be suitably amended that provide grounds for triggering CL by competitors for commercial benefits.

o Safeguards enshrined in the Aug 30 decision (Motta-Menon text) is to be provided for exports under Section 92A of the Indian Patents Act 2005, corresponding to Para 6 of the declaration on the TRIPS Agreement

Is paying royalty to patent holder an acceptable solution to this issue?

Many feel that this question totally ignores the right of an innovator to protect his/her innovation, which is the outcome of a painstaking, long, costly and risky R&D process. Such protection is granted to an innovator against disclosure of the data generated for the innovation to the patent office for public knowledge at large through grant of a patent for a specific time period. During this period the innovator is the exclusive owner of the innovation. The provision of CL can be invoked during this period, as stated above, for some very specific and extra-ordinary situation.

Such extra-ordinary situation, as and when will arise be addressed by the government based purely on the merits of the cases. Carte blanche permission by any authority allowing use of an innovator’s product during its patent life against a royalty payment, without innovators wish, is believed to be against the letter and spirit of Indian Patents Act 2005.

Conclusion:

In Indian Patents Act 2005, the provisions of CL should maintain a fine balance between the critical need of innovation by the pharmaceutical companies and its reach to the users to meet their unmet needs. For a country like India, CL is probably the most appropriate safeguard against potential abuse of monopoly by the patentees in case of national emergencies and to address critical public health issues.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Will the ‘Bayer–Cipla case’ now put the ‘Bolar Provision’ under judicial scrutiny?

To enable the domestic pharmaceutical industry gaining a critical mass and cater to the pressing healthcare needs of the nation, in 1970 product patent act was abolished by the government of India. This immensely helped the domestic companies to launch the generic version of innovative medicines at a very low price, making those drugs quite affordable to a large section of the population.
Cost and process efficiencies helped the Indian pharma companies to reach out:

Quickly acquired cost and process efficiencies of the domestic generic pharma companies soon made India a power to reckon within the global generic pharmaceutical industry. Besides fueling the domestic demand of the essential medicines in general and these drugs in particular, the domestic pharma players soon commenced exports of these cheaper but high quality medicines to non-regulated and the least developed countries of the world to cater to their affordable healthcare needs.

India played a key role in combating HIV-AIDS in Africa:

In that process, India also played a critical role to ensure that HIV-AIDS drugs are available to the poor and down trodden in Africa in general and sub-Saharan Africa in particular, at an affordable price.

A paradigm shift:

On January 1, 2005, India stepped in to a new paradigm with re-enactment of the product patent act in the country, which is widely believed to be TRIPS compliant. This consequently ushered in a transition within the Indian pharmaceutical industry from the mindset of an ‘imitator’ to the prestigious status of an ‘innovator’, which ultimately drives the wheel of progress of a nation.

The voice of concern:

At the same time and for the same paradigm shift many expressed their grave concerns about the role that the domestic generic pharmaceutical industry will play in the new paradigm to continue to make cheaper but quality modern medicines available not only to a large section of the Indian society, but also to the needy patients of non-regulated and least developed countries of the world.

TRIPS safeguard provisions:

Although minimum standards of patent protection that patent holders should get have been articulated in TRIPS, it also very clearly specifies three very important public health safeguard provisions simultaneously, which will allow any participating country to utilize these during such types of needs.

These three TRIPS public health safeguard provisions are as follows:

A. Compulsory Licensing:

- There is nothing in TRIPS, which can limit the authority of the government, in any way, to grant compulsory licensing of a patented product for public health safeguard.

B. Parallel importing:

- TRIPS clearly indicates that under WTO dispute settlement body parallel imports cannot be challenged, if there is no discrimination on the patent holders’ nationality.

AND

C. Bolar Provisions

The Bolar Provision:

To enable the generic players launching new molecules at a much cheaper price, the Patent Act 2005 provides for exceptions to the patentee’s exclusive rights under Article 30 of TRIPS, as ‘Bolar Provisions’ in its section 107A(a):

“any act of making, constructing, using, selling or importing a patented invention solely for uses reasonably related to 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.”

This section provides an exemption from patent infringement to the generic manufacturers from producing and importing patented drugs for research and development, related to submission of information for regulatory approvals of generic versions of patented products before the original patents expire. The legislative intent of this section is to ensure that the generic versions of patented products are ready with necessary regulatory approval for market launch, immediately after the innovator products go off patent, rather than going through a long rigorous process of getting the regulatory approval only after expiration of the patent term.

Is the Section 107A now under judicial scrutiny?

This section may be unfairly used by some generic manufacturers, soon after the launch of products patented in India, for unfair commercial reasons. The final judgement on Bayer–Cipla case on Nexavar may throw some light on this important provision. It is quite possible that because of this reason Delhi High court has ordered Cipla to seek the High Court’s permission before market launch of the generic version of Bayer’s patented product.

Conclusion:

Although there is nothing wrong in using a patented molecule for getting regulatory approval with a genuine intent to launch the generic version after the original product goes off patent, it now appears that in absence of Regulatory Data Protection (RDP) both against disclosure and unfair commercial use, this section may most likely to be abused more by some generic players with mala fide commercial interest.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.