Lee Pharma v. AstraZeneca- An unfinished Patent Story

Compulsory licensing cases and India have a peculiar relationship. They are in a way, soul sisters in the world of Intellectual property. Section 84 of the Patents Act, 1970 has always been the subject of intense debate. It hasn’t been very long since India issued its first ever compulsory licence to Natco Pharma, an Indian generic company, for Bayer’s blockbuster anti-cancer drug Nexavar (Sorafenib) in March 2012. Two other CL applications followed the Nexavar case, one relating to Roche’s Herceptin and the other relating to Bristol Myers’ Dastanib, but lady luck favored the respondents in both these cases and the drugs did not meet the fate as that of Nexavar. Section 84 is back in the picture this year and appears to be on a hunt for its new victim. Lee Pharma Ltd., an Indian generic company filed an application [C.L.A. No. 1 of 2015] under Section 84(1) of the Patents Act (also referred to as ‘the Act’ for brevity), 1970 on 29th June 2015 seeking the grant of a CL for manufacturing and selling of the drug SAXAGLIPTIN by AstraZeneca. The drug is protected by patent number 206543 titled “A Cyclopropyl-fused pyrrolidine-based compound” granted on 30th April 2007 to BMS (Bristol Myers Squibb). BMS assigned the ownership rights of the Patent 206543 to AstraZeneca AB in February 2014 and AstraZeneca holds the right to the manufacture and sell the drugs in India since then.

SAXAGLIPTIN is a drug used in the treatment of Type –II Diabetes Mellitus also known as Adult Onset Diabetes Mellitus, and is sold under the brand name ONGLYZA in dosages of 2.5mg and 5mg. It is also sold in combination with Metformin under the brand name KOMBIGLYZE XR.

Lee Pharma filed an application for CL on the grounds that:

  1. the reasonable requirements of public with respect to the patented invention have not been satisfied; and
  2. the patented invention is not available to the public at a reasonably affordable price; and
  3. the patented invention is not worked in the territory of India.

Lee Pharma had made a request for a license to AstraZeneca with respect to the patent 206546, in May 2014, and AstraZeneca replied to Lee Pharma seeking certain clarifications and disagreeing with Lee’s claim that SAXAGLIPTIN was not available to the general public at a reasonably affordable price. However, due to some technical failure in communication between the two parties, a period of one year lapsed without any progress of communication on the issue and Lee Pharma then decided to approach the Controller of Patents.

Based on the evidences submitted to the Controller by the applicant, the controller found that Lee Pharma had made efforts to obtain a license from the patentee on mutually agreeable terms and a reasonable period as envisaged under Section 84(6) of the Act had elapsed without the efforts being successful.

The Controller observed that, in respect to clause (a) of sub-section (1) of Section 84 of the Patents Act; the applicant submitted data and statistics to show that the reasonable requirements of the public had not been satisfied by the patented invention. However, due to the availability of substitutes to the drug under question, the Controller found that a case could not be made out by the applicant to the effect that the reasonable requirements of the public were not being satisfied.

Further, with respect to clause (b) of sub-section (1) of Section 84 of the Patents act the Controller observed that the Lee Pharma’s proposal to sell the drug in the range of Rs 27 to 31.50 per tablet was paradoxical to its claim that AstraZeneca’s drug was not available to the public at a reasonably affordable price, because the selling price range proposed by Lee Pharma was several times the alleged cost of import and thus the applicants own argument went against itself, and hence no case was made out in terms of clause (b) of sub-section (1) of section 84 of the Patents act.

Lastly, with respect to clause (c) of sub-section (1) of Section 84 of the Patents Act, the Controller pointed out that it had been clearly borne out from the judgment of the Hon. Bombay High Court in the Bayer case and the IPAB in the same case that, “manufactured in India is not a necessary precondition in all cases to establish working in India and that the patent holder however is required to establish the reasons which make it impossible / prohibitive to manufacture the patented drug in India, particularly when the patentee has manufacturing facilities within the country”. In this light, the Controller observed that the Applicant had not submitted any data relating to the manufacturing facilities of the Respondent within India and thus failed to make a case that the invention was not being worked in the territory of India.

In view of all the above observations, the Controller 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. This means SAXAGLIPTIN has evaded the CL bullet for now and is a new story that is likely to keep us occupied for sometime in the near future.

The original order has been given below.