SSRN Paper:Compulsory Licences on Pharmaceutical Patents in India

Mr. Sandeep Rathod (patent lawyer and Head of Litigation at Mylan Laboratories) recently uploaded a paper on SSRN titled, ‘Compulsory Licences on Pharmaceutical Patents in India’. The paper which argues against the notion that the Bayer case opened the floodgates for compulsory licensing in India (discussed on GoT here) is based on empirical evidence and an excellent repository of the compulsory licence applications which have been filed in India so far.

While reading the paper, I realised the gaps in my own research on compulsory licensing in the Indian context. My article (which has now finally been published by the JIPLP) missed many of the lesser known compulsory licence applications documented by Mr. Rathod in his paper.

I would encourage you to read the paper and share your thoughts. The working draft of the article is available open access at SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2838204

 

 

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24 (India) Season 2 & the Access to Medicines debate in India (*Contains Spoilers*)

24 season 2

I spent yesterday binge-watching Anil Kapoor’s 24. 24 (India) TV series is a crime-suspense thriller and based on the US show of the same name. The wait for Season 2 has been long and my excitement knew no bounds when Season 2 finally premiered this July.

Being an IP enthusiast, I was delighted to find that 24 contained a pop culture reference to the long-standing debate on access to medicines in India (Warning: Spoilers ahead!)

There is a scene in Episode 3 (13:53 to 19:23) where it is revealed to us that Aditya Singhania is dating Dr. Devyani whose father is a scientist/heads a pharmaceutical company in India. In a meeting with pharmaceutical companies, Aditya Singhania talks of a proposed health bill which aims to subsidize medicines and make them accessible to the poor and rich alike in the country. The pharma companies are critical of this bill; they argue that it would adversely affect their profits since they have invested heavily in marketing, R & D and in patents. Both sides spar, with pharmaceutical companies arguing that diseases like small pox were eradicated because their life-saving drugs drugs reached every person and that this was proof that the companies already price drugs at affordable costs; the Prime Minister offers that it was ‘because’ the government did not ‘allow’ such drugs to be priced highly that the medicines were accessible to every person leading to successful eradication of life-threatening diseases. While this debate can very well be a chicken-and-egg situation, it captures the essence of the debate on ‘access to medicines’.

Up until a year ago, I could never fully understand the hullabaloo over access to medicines since I lacked the understanding of the subtle issues involved in this debate. This changed when I had the opportunity to provide research assistance to Prof. Feroz Ali Khader for his book, ‘The Access Regime:Patent Law Reforms for Affordable Medicines’. For those who do not yet grasp the fine points of this debate, I present below the issues in a nutshell:

Until 2005, India did not provide for patent protection on pharmaceutical products (based on the recommendations of the Ayyangar Committee report which recognized that it was important for the Indian government to ensure that medicines remain accessible to the citizens). Since there were no patents on pharmaceutical products, generic drug companies in India could reverse-engineer the product and supply them at lost-cost in India in abroad, thereby earning India the title of the ‘pharmacy of the world’. It was only after signing the TRIPS Agreement that India had an international obligation to amend its patent laws to include patent protection for pharmaceutical products. While pharmaceutical products can now be patented in India, India has not shied away from using the “TRIPS flexibilities” (Article 1 of TRIPS states that WTO members are free to determine the manner of implementation of the provisions of the Agreement)  to ensure access to certain life-saving medicines in the country.

Some of these flexibilities are:

  1. Section 3(d) of the Patents Act, 1970 which increases the threshold of patentability of pharmaceutical products in order to prevent ever-greening of patents (the constitutionality of section 3(d) was at issue in the famous Novartis v. UOI).
  2. Section 84 of the Patents Act which provides for issuance of “market-initiated” compulsory licences ((section 84 compulsory licences are different from compulsory licences issued on the ground of national emergency (section 92))- Section 84 allows interested persons to apply for compulsory licences on patented products on the grounds of non-affordability, non-accessibility or non-working of the product in India. Section 84 was the bone of contention in Bayer v UOI.
  3. The process of pre-grant opposition (section 25(1)) which allows any person to oppose a patent application on certain specified grounds.

India has faced a lot of flak by pharmaceutical companies (known as the Big Pharma in the US) for using the TRIPS flexibilities. From the pharmaceutical companies’ perspective, this is detrimental to innovation because commercial exploitation of their inventions (e.g. through patent licensing) allows companies to re-coup their R&D costs and use the money in further R&D to further develop medicines. It is important to note that R&D costs in developing pharmaceuticals can be quite significant given that only few in the many drugs developed are effective and/or get marketing approval. Health advocates, on the other hand, feel that pharmaceutical companies inflate their R&D costs to make neat profits at the expense of public health. This encapsulates the debate on access to medicines.

Interestingly, 24 Season 2 is based on bio-warfare and it would be interesting to see whether this reference was merely incidental to the plot or is part of a bigger sub-plot. In any case, 24 is one of the better TV shows to come out of India in the recent past and definitely worth a watch.

[The show premieres every Saturday and Sunday on Viacom 18, and those without access to TV can stream it online (LEGALLY <yay>) for free on Voot (the digital arm of Viacom 18).]

 

What the India-US BIT could mean for the future of generic drugs in India.

A session on India-US Economic Relations was held in New Delhi yesterday wherein Adewale (Wally) Adeyemo, the Deputy Assistant to the US President and Deputy National Security Advisor for International Economics,  was quoted as saying,

“To be frank, we are far apart on number of issues with regard to trade and investment with India. We feel our colleagues in India have not been as ambitious (on concluding BIT) as we want them to be but we remain open.”

Given that the bilateral trade between the two countries is expected to reach US$ 500 billion in the near future (a four-fold jump from US$ 35 billion in 2015), the US is eager to seize the opportunity to trade with India, one of the fastest growing economies among the G20 countries. Negotiations over a BIT between India and the US first commenced in 2008.

As always, ‘protection of intellectual property rights’ remains a thorny issue. As Adeyomo notes,

“I do think there are issues where we can find ways to work together. For example digital issues, with regard to IPR this is the place both have interest in trying to find solutions. Finding places to work together will help us in finding solution to more contentious issues like IPR,”

Earlier this year, India had faced public condemnation over allegations that the Indian government had given secret assurance to the US that India would not be granting compulsory licences on US patented drugs. Shortly thereafter, the US released its Special 301 report which placed India on the Priority Watch List (list of countries which have “serious intellectual property rights deficiencies”).

Adeyomo’s statement is indicative of yet another instance of the US trying to pressure the Indian government to tighten IP protection in the country, this time through the BIT route.

Intellectual property is covered as an ‘investment’ under BITs and any State measure which adversely affects the investor’s IP can trigger investment arbitration against the host-state under the investor-state dispute settlement (ISDS) mechanism in BITs. It is not uncommon for investors such as US companies to challenge a host-state’s IP laws on the ground that their intellectual property (or investment) is not adequately protected in the host-state. This was in fact the legal basis for Philip Morris’ claim against Australia in an ISDS proceeding, where Philip Morris, a US tobacco company, had challenged Australia’s plain packaging laws for cigarettes. While the investment arbitral tribunal in Philip Morris declined jurisdiction to hear the matter, such investor claims, if successful, can compel States to withdraw regulatory measures (including measures addressing public health concerns).

India, on its part, has been more proactive in its attempt to avert future ISDS claims; in December 2015, the Indian government unveiled a revised version of the model India BIT, which aims at preserving the host State’s right to regulate. However, the revised model BIT sways the pendulum too heavily in favour of the host State. As investment law expert, Dr. Prabhash Ranjan notes, the model India BIT excludes wholly the issuance of compulsory licences and revocation of IPR from being challenged under the ISDS.

Given that intellectual property is integral to any trade negotiation between India and the US, it is a no-brainer that the US would not agree to the IP protection clauses in the model India BIT in its current form. Both sides, would have to meet each other half-way to conclude the India-US BIT.

If India gives in to the US demand to strengthen the IPR regime in the country, it could make it even more difficult for India to grant compulsory licences and would adversely affect the Indian generic drugs industry.

Indian Patent Office rejects Saxagliptin compulsory licence application

Another article which Radhika & I had written for the Oxford Journal of Intellectual Property Law & Practice on the Saxagliptin compulsory licence case was published online this month.

Please visit the following link to read the article:

http://jiplp.oxfordjournals.org/content/early/2016/06/27/jiplp.jpw064.full?keytype=ref&ijkey=x0dikp4o9GLzgL0

For those who want to make commercial use of the article, please contact the Oxford University Press:

http://www.oxfordjournals.org/en/access-purchase/rights-and-permissions.html

 

Is India Really Apathetic to the Grant of Compulsory Licences?

On 1st April 2016 the National Human Right Commission (NHRC) called on the Indian government to submit reports on the allegations that the Indian government had given private assurances to the US that India would adopt a stringent approach when granting compulsory licences over patented drugs.

While the Ministry of Commerce & Industry in a press report in March had denied such allegations, shortly after the NHRC Press Release Lee Pharma and BDR Pharma (the only two companies to file for compulsory licences after Natco) announced that they would not be pursuing appeals against the rejection of their compulsory licence applications by the Indian Patent Office. The Indian generic drug companies cite the government’s proclivity against the granting of compulsory licences as the reason behind their decision.

While the Indian government’s alleged promise to the US has definitely stirred up a hornet’s nest among public health activists in the country, it is worth exploring whether the Indian government is as apathetic to the granting of compulsory licences as it appears to be.

Ever since its inception in the Patents Act in 1970 the compulsory licensing provision has remained an under-utilized provision. In the first four decades since the introduction of the Patents Act 1970, no compulsory licence application was filed in India and it was only in 2011 that Natco successfully filed a compulsory licence application over Bayer’s anti-cancer drug, Nexavar.

Intellectual Property has always formed a top priority in the trade and policy discussions between India and the US, with the latter pushing for stronger IP protection in India. The Nexavar licence, which was the world’s first market-initiated compulsory licence, was met with severe backlash by the United States which argued that compulsory licences can only be issued in times of public health emergencies and are restricted to certain diseases only. In 2012, the US Commerce Secretary, John Bryson, in a visit to India raised concerns over the Nexavar licence calling it a “dilution of the international patent regime”.

The Nexavar licence had led to apprehensions worldwide that India would be quick to grant compulsory licences, however, the history of compulsory licensing has been fairly insipid in India, with only two applications under section 84 (market-initiated compulsory licences) filed after Nexavar. The first application pertained to Bristol-Myers Squibb’s cancer drug, Dastanib, which was filed by Indian generic drug manufacturer, BDR Pharma. BDR’s application was rejected at the threshold because BDR had not made a sincere effort to procure a voluntary licence from Bristol-Myers prior to making an application under section 84 (a relevant factor for granting compulsory licence applications).

The second application was initiated by Lee Pharma Ltd. for compulsory licence over AstraZeneca’s patented diabetes drug, Saxagliptin. The Saxagliptin application was rejected on the basis that the applicant had failed to provide evidence regarding any of the grounds under section 84: non-availability, non-affordability, non-working of the patented drug in India.

The number of compulsory licence applications filed in India after Nexavar has not been encouraging and it forces one to reconsider whether India has in fact been playing to the gallery as far as the US is concerned. In both the Dastanib and the Saxagliptin case, the Indian Patent Office rejected the applications due to procedural shortcomings on the part of the applicants.

In the absence of an order reflecting the ideology of the Indian Patent Office when granting (or rejecting) compulsory licence applications, it is too early in the day to conclude that such a secret arrangement between India and the United States has in fact been made.

[This blog (originally titled, ‘The Dismal History of Compulsory Licences in India’) was first published here on the Kluwer Patent Blog.]