A victory and a retreat on CLs

Supreme Court up­holds In­dia's first com­pul­sory li­cence but gov­ern­ment baulks at giv­ing the sec­ond


Dbeen a land­mark month on legal ECEM­BER HAS ques­tions sur­round­ing the com­pul­sory li­cence (CL). On De­cem­ber 12, the Supreme Court of In­dia set the seal on a three-year battle launched by multi­na­tional drug com­pany Bayer against the first and only CL is­sued so far.That was to pro­duce the an­ti­cancer drug so­rafenib to­sy­late (Nex­avar).The apex court dis­missed Bayer’s spe­cial leave pe­ti­tion against the Bom­bay High Court’s de­ci­sion up­hold­ing the CL granted to In­dian gener­ics firm Natco to man­u­fac­ture Nex­avar.

The rul­ing on Nex­avar is mo­men­tous as it was a test case. The CL given to Natco in March 2012 by the Con­troller Gen­eral of Patents had re­sulted in a nasty cam­paign against In­dia’s patent regime by drug mncs who claimed that its laws did not pro­tect in­tel­lec­tual prop­erty rights (iprs). The Nex­avar CL, although per­fectly legal, was used by US pharma ma­jors and trade lob­bies to por­tray In­dia as a mav­er­ick on patents. The fact is that CLs are a wto-ap­proved pro­vi­sion that al­lows gov­ern­ments to is­sue a li­cence to over­ride patents in spe­cial cir­cum­stances.The irony is that the US has is­sued the high­est num­ber of CLs to date.

Bayer had first chal­lenged the CL at the In­tel­lec­tual Prop­erty Ap­pel­late Board (ipab), then in Bom­bay High Court and fi­nally at the Supreme Court.An­a­lysts be­lieve the De­cem­ber rul­ing is a ma­jor victory for ac­cess to medicines and that the ear­lier judge­ments of ipab and the high court have set im­por­tant guide­lines for the grant of CLs.

In ear­lier col­umns,we had ex­plained the sig­nif­i­cance of the Nex­avar case where sev­eral crit­i­cal is­sues such as the cost of the drug,its limited avail­abil­ity in In­dia and Bayer’s re­luc­tance to man­u­fac­ture it in the coun­try had all played a role in the is­suance of the CL.

But other de­vel­op­ments are testing the coun­try’s com­mit­ment to CLs.At the same time that the Supreme Court gave its rul­ing on Nex­avar an­other crit­i­cal case in­volv­ing CLs came up in the Delhi High Court. The suit was filed by No­var­tis against lead­ing gener­ics maker Ci­pla for in­fring­ing five patents cov­er­ing its In­da­caterol drug (On­brez) that is used to treat chronic ob­struc­tive pul­monary dis­ease (copd).No­var­tis has sought dam­ages for this in­fringe­ment.

Ci­pla,how­ever,was testing the wa­ters on CL through an­other route (see ‘Ci­pla’s au­da­cious move’, Down To Earth, Novem­ber 15-30, 2014). In Novem­ber when Ci­pla broke the No­var­tis patents by pro­duc­ing a low cost generic ver­sion of On­brez, it had also pe­ti­tioned the Depart­ment of Industrial Pol­icy and Pro­mo­tion (dipp), the nodal agency on ipr mat­ters, to re­voke the On­brez patents. Ci­pla con­tended that copd hav­ing reached “epi­demic pro­por­tions”, the gov­ern­ment should ex­er­cise its pow­ers un­der Sec­tion 92 of the In­dian Patent Act to is­sue a CL. Ci­pla also ar­gued that No­var­tis was not man­u­fac­tur­ing the drug lo­cally and was im­port­ing only limited quan­ti­ties and thus lim­it­ing its avail­abil­ity.Be­sides,the medicine was too costly. It was cit­ing the very same grounds un­der which the Nex­avar CL was is­sued.

dipp,how­ever,did not rise to the chal­lenge.As a re­sult, No­var­tis has sued Ci­pla and refuted the com­pany’s claims on avail­abil­ity of the drug. More per­ti­nently, No­var­tis was quoted by Reuters as say­ing, “Ci­pla did not use any of the pro­cesses pro­vided for in the In­dian legal sys­tem to ei­ther chal­lenge va­lid­ity of the patents, es­tab­lish non­in­fringe­ment or to seek a li­cense for th­ese patents.”

The health min­istry had backed Ci­pla’s rec­om­men­da­tion so why did dipp refuse to act? One rea­son that’s been bruited around is that dipp was not sure if it was on firm legal ground.The other the­ory is that the gov­ern­ment was afraid of pro­vok­ing the US.Most peo­ple be­lieve this is the real rea­son.


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