Lee and BDR decision – the End of Compulsory Licenses?!

Earlier this week, the words, “Compulsory License”, “Section 84” and “Indian pharma” once again made the headlines. This time however, it wasn’t a new case being brought forth; instead it was the decision to bury two old ones.

The news reports suggested that two Indian drugmakers had given up a battle to copy drugs developed by Bristol Myers Squibb and AstraZeneca, blaming a lack of government support for cheap generics and pressure from Big Pharma. The two Indian drug makers being mentioned here include, BDR Pharma and Lee Pharma. We at Sinapse have carried several posts on the issues of compulsory licensing earlier. The links to some of these posts are provided here, here and here for your reference.

To help our readers understand what this post is about, a brief on the cases of BDR Pharma v. Bristol Myers Squibb and Lee Pharma v. AstraZeneca are provided below.

BDR Pharma v. Bristol Myers SquibbIn March 2013, BDR Pharma requested for a Compulsory License for the manufacture of Bristol Myers anti-cancer drug “Dastanib”. The Controller rejected the compulsory license application of BDR Pharma on 29th October, 2013 on the grounds that BDR Pharma could not make out a prima facie case for the grant of a compulsory license, because as the applicant, BDR Pharma had failed to make efforts to obtain a voluntary license from the patentee on reasonable terms and conditions.

In the case of Lee Pharma v. AstraZeneca, Lee Pharma filed a CL Application in accordance with Section 84(1) of the Indian Patents Act, on 29th June 2015 against one of AstraZeneca’s patented drug “Saxagliptin” used in the treatment of Diabetes Mellitus. Lee Pharma accused AstraZeneca of not having made sufficient efforts to make the drug in India and importing the drug at less than a rupee but charging as much as Rs 45 for each tablet. The Controller however found that, a prima facie case could not be made out for making an order under Section 84 of the Patents Act and issued his decision on the 12th of August, 2015 in favor of AstraZeneca.

Now, returning to the news at hand, the two generics manufacturers have said that their efforts have been thwarted by present government’s initiative to boost foreign investment in India through routes such as “Make in India” and the alleged assurance by the Indian government to a U.S. business lobby group suggesting that compulsory licenses would no longer be issued for commercial purposes.

According to ‘reuters’, Lee Pharma’s Managing Director, is said to have remarked – “If the government itself is not inclined then why unnecessarily slog on this issue?”. This move by the generic manufacturers has the pharma community split in two. While some find this decision a sign of how exasperated the Indian generic industry is, some have taken the stand that the days of dragging Pharma majors to the Court under the garb of CL’s are finally coming to a close.

In recent months, several Indian firms have struck licensing deals, under which profit-sharing and drug prices are decided mutually by companies. This is in contrast to the government’s intervention where it sets the royalty rates for compulsory licenses. A prime example of such deals includes the deal between Gilead and Natco, Bayer and Cadilla, Merck and co., MSD Pharmaceuticals Pvt. Ltd. and Sun Pharmaceuticals, to name a few.

The government has taken some good steps towards building a strong economy and in the same light a strong IP regime. For instance, the governments dedicated campaign to boost investment and manufacturing in order to speed up growth and create jobs is a great move towards strengthening the economy. Similarly, the recent review of the patent rules and the suggestion of a new intellectual property policy reflect the governments will towards making the IP system more robust, effective and efficient. Despite the above being said, the government must remember that “Compulsory Licensing is a necessary evil” and therefore while it makes assurances that it would not grant CL’s it must also make sure that when required it must not shy away from granting one.

Authored by Gaurav Mishra

References: Here


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