India’s compulsory licensing policy, though TRIPS compliant, has come under scathing attack from many quarters of developed countries, mainly attributed to the pressure from big pharma lobbies based in those countries. India granted its first compulsory license in Mar 2012 to NATCO Pharma Ltd., a generic drug manufacturer, to produce Nexaver, an anticancer drug patented by Bayer and the license is valid till 2020. An attempt by another generic drug maker, BDR Pharma to get a compulsory license for another anticancer drug – Dasatinib was however unsuccessful with the Indian patent office rejecting it on the basis of failure of the applicant to make a prima facie case.
The third compulsory license (CL) application was filed by Lee Pharma Ltd., a Hyderabad based company on 29th June 2015 for manufacturing and selling an antidiabetic drug, Saxagliptin patented by Bristol-Myers Squibb (BMS), an American pharmaceutical company. The patent numbered IN206543 and titled “A cyclopropyl-fused pyrrolidine-based compound” was granted on 30 Apr 2007. The patentee BMS assigned the ownership rights of the patent to a Swedish company, Astrazeneca AB. Saxagliptin is used to treat Type II Diabetes and is sold under the brand name ONGLYLA. A combination drug of Saxagliptin with metformin is sold under the brand name KOMBIGLYZE XR. The CL application was filed under all three grounds of the section 84(1) of the Indian Patents Act, which states that:
“At any time after the expiration of three years from the date of the grant of a patent, any person interested may make an application to the Controller for grant of compulsory licence on patent on any of the following grounds, namely:—
(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.”
In response to Lee Pharma’s CL application, the controller has issued a notice dated 12 Aug 2015 that is in favour of the patentee after considering various issues. In the CL application, Lee Pharma has claimed that it has a production capability of 10,00,000 tablets per day of Saxagliptin and the combination drug of Saxagliptin with Metformin. The controller has stated that it is prima facie proven that the applicant Lee Pharma has the capacity to undertake the risk in providing capital and working the invention, if the application is granted as required under S.84 (6) (iii). He has further concluded that Lee Pharma is a person interested eligible to apply for a CL.
Lee Pharma had first approached Astrazeneca AB for a voluntary license through a letter dated 2nd May 2014 for which Astrazeneca AB responded by an email seeking certain clarifications from Lee Pharma. Thereafter a series of exchanges occurred between Lee Pharma and Astrazeneca AB and Astrazeneca AB did not reply for a final email in this series of exchanges from Lee Pharma dated 2nd March 2015. The notice concludes that the communication between Lee Pharma and Astrazeneca AB shows prima facie that Lee Pharma 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 required under Section 84 (6) (iv). The notice states that the 13 month time period between the first request for voluntary license by Lee Pharma and its filing of CL application satisfies the “reasonable period” requirement under S. 84 (6) (iv).
Ground 1: Clause (a) of Section 84 (1):
The applicant has claimed that the reasonable requirements of the public with respect to the patented invention have not been satisfied. Though substitute antidiabetic drugs (Linagliptin, Sitagliptin and Vildagliptin) are available in the market, Lee Pharma has not given details regarding the quantum of the substitute drugs available in the market but has simply inferred that there is more than 99% shortage of Saxagliptin in the market. Further, Lee Pharma has not shown any difference in terms of treatment between Saxagliptin and the substitute drugs to distinctly justify/quantify the demand for Saxagliptin in the Indian market. Based on the above points, the controller has stated that it is not possible to arrive at any conclusion regarding the demand for Saxagliptin. Hence, it is decided that a prima facie case has not been made by Lee Pharma on this ground.
Ground 2: Clause (b) of S. 84 (1):
Lee Pharma has claimed that the patented invention is not available to the public at a reasonably affordable price. The cost per tablet as set by Astrazeneca AB ranges from Rs. 41.50 to Rs. 49 and Lee Pharma has set the price at which it is willing to make Saxagliptin available to the public ranging from Rs. 27 to Rs. 31.50. Lee Pharma has argued that for the millions of low income diabetic population in India, the tablet is highly priced by Astrazeneca AB and also there is a huge difference between the importation cost (from Rs. 0.80 to 0.92) and selling price per tablet. The notice states that even the price set by Lee Pharma is high when this argument is considered and hence the argument goes against Lee Pharma itself and so on ground 2 also, the controller has concluded that the applicant has failed to make out a prima facie case.
Ground 3: Clause (c) of S. 84 (1):
Lee Pharma has asserted that the patented invention is not worked in the territory of India even after a lapse of eight years from the date of patent grant. The applicant has further claimed that the patented invention is not being worked in the territory of India on a commercial scale to an adequate extent or is not being so worked to the fullest extent that is reasonably practicable and that the working is hindered by importation from abroad of the patented article. The controller has cited the judgement given in the “Bayer vs. Union of India” case, wherein it is ascertained that manufacture in India is not a necessary pre-condition in all cases to establish working in India”. But if the patentee has manufacturing facilities within India, then the patentee has to establish the reasons as to why he is not able to manufacture the drug in India. Lee Pharma has not submitted any details about the manufacturing facilities of the patentee/ assignee in the present case. Hence the controller had held that the applicant has failed to make out a prima facie case on ground 3 also.
Based on the above points, the controller has notified that a prima facie case has not been made out by the applicant for the making of an order under Section 84. As of now, Lee Pharma has the option of requesting a hearing under rule 97 (1) of the Patents Rules, 2003 within one month from the notice date (12 Aug 2015) failing which the CL application shall be refused by the controller.