Keen wait for outcome of first case on compulsory licensing

Keen wait for outcome of first case on compulsory licensing
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First Published: Fri, Mar 07 2008. 01 00 AM IST

Updated: Fri, Mar 07 2008. 01 00 AM IST
Mumbai: The latest clash in India between makers of copycat drugs and patent holders is set to define how the world’s largest manufacturer of generic medicines treats compulsory licensing—a trade provision under which a government can force a right’s holder to allow the state or a rival to use the patented formula to meet a medical emergency.
India’s patent controller general is hearing its first compulsory licence application after the country started the product patent regime for pharmaceuticals in 2005. Cancer speciality company Natco Pharma Ltd had filed an application seeking permission to manufacture generic or copycat versions of two patented drugs—Pfizer Inc.’s sunitinib malate and F Hoffman-La Roche Ltd’s erlotinib—and export them to Nepal.
A decision on the application is not only important for the Indian drug industry, but is also critical to the generic-hungry world drug market.
“The case is important for the world as India is considered the factory of cheap generics for global markets, where governments want to control spiralling health care costs,” said Y.K. Sapru, chairperson, Cancer Patients Aid Association. “The government of India must be willing to issue compulsory licences so that generic competition can increase, and more affordable drugs be exported.”
The World Trade Organization (WTO) offers this clause to ensure that patent protection does not end up preventing public access to medicines, but local laws in most countries lack the clarity necessary to simultaneously guarantee fair trade.
In this context, the World Health Organization’s (WHO) recent decision to confirm the legitimacy of compulsory licensing holds an important position. In a Bangkok forum in January-February, WHO had announced its mission to provide technical and policy support to promote access to pharmaceutical products using the Trade Related Intellectual Property Rights (TRIPS) flexibilities. In effect, the mission will advise on the practical aspects and procedures under TRIPS provisions for compulsory licensing.
India’s patent regulator had started hearing the case last week but hit a roadblock when Natco objected to its hearing the patent holder, saying the WTO provision does not require this. The Hyderabad-based company has approached the Delhi high court questioning the legality of hearing the patent holders, though they are entitled to a reasonable royalty.
The government and the regulator’s final decision is expected to get rid of the cobwebs in the compulsory licence provision and provide a clear framework. Till then, it looks tough for Indian generic companies as local laws lack clarity on several issues.
For instance, if a company wants to sell a copycat version to a less developed country, it should have an order for the drug and a declaration by that country stating its urgent need for the medicine. But, as in Natco’s case, it is not clear if the patent controller should hear both the generic drug maker and the patent holder.
Similarly, if a government invokes the compulsory licence provision for local supply to meet a medical emergency, there is no clear definition of what constitutes such a situation. India also provides an option for generic companies to apply for a compulsory licence for domestic manufacturing and supply. But under this, a generic company has to wait at least three years after a patent is granted and should prove that the drug is short in supply and the patient need is not met.
According to Gopakumar Nair, a patent consultant in Mumbai, Indian patent law does not clearly ask for a patent holder to be heard while deciding on a compulsory licence under TRIPS rules.
Partially agreeing with this, intellectual property blog SpicyIP said the “omission appears more an oversight than a deliberate intent to exclude the views of a patentee in deciding such a licence.”
“In the interests of transparency and having a government authority make the right decision, we have to ensure that both parties are heard—particularly since this is the first case under section 92A (which deals with exports),” said Shamnad Basheer, a patent lawyer and chief of SpicyIP.
According to Yusuf K. Hamied, chairman of generic drug maker Cipla Ltd, a liberal compulsory licensing policy is the solution to meet India’s medical needs.
“Compulsory licensing is imperative for India as several patents already granted in the country are unsubstantiated and the high price of medicines would affect patient access to important drugs, though generic companies can offer them at one tenth of the original cost.”
If the government agrees to Natco’s application, it will be only the second time an export licence is granted for public health reasons since WTO members agreed on the trade provision in August 2003. The first was issued by Canada for the production of an HIV/AIDS drug for export to Rwanda.
Executives of Roche, Pfizer and Natco declined to comment as the issue is in court. The Delhi high court is expected to give its ruling on Natco’s petition soon.
Pfizer, in an earlier statement to Mint, said it was in the process of registering Sutent (sunitinib), its kidney cancer drug, in Nepal. The company had launched the drug in India in January. The drug costs around Rs1.96 lakh for a 45-day treatment in India; the potential price tag in Nepal is not known yet. Pfizer says it has already launched a patient access programme under which the drug will be available at a concession to deserving patients. It will extend this programme to Nepal as well, the statement had said.
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First Published: Fri, Mar 07 2008. 01 00 AM IST
More Topics: Natco Pharma | Licensing | Drugs | TRIPS | WHO |