3
In the past 18 months if there is one issue
that has divided intellectual property
intelligentsia the world over, it is the
compulsory license granted in favour of
Natco Pharma to commercially exploit
Bayer's patent on the cancer drug
Nexavar (the Nexavar decision). The
decision, as one reporter put it, set off a
tidal wave of reactions. While on the one
hand it was cheered by many as a step in
the right direction to make medicines
affordable to those who need them the
most, innovator drug companies felt the
ground beneath them shake and upped
their cry of anti-innovation IP policies in
India. But, whichever side you are on
and we urge you to walk the middle path
before attempting to take sides the real
issue is to accept that compulsory
licensing is an inconvenient reality in India.
It is not a catastrophe as many believe;
and our challenge lies in identifying the
gaps that have been exposed in light of
the Nexavar decision.
Much has been written and discussed
about most, if not all, of the following
questions. Is the deprivation of Bayer's
(read innovator drug companies) right to
exclude Natco (read generics) from
commercially exploiting its invention the
new trend of times to come in India? Is
India really ready to walk down the
compulsory licensing path because of
genuine public interest or is it simply a
tool for protecting the generics industry?
Is compulsory licensing the work around
that India has found to make sure that its
patent laws are both TRIPS compliant and
pro-generics? Or is it all much ado about
nothing?
The key learning for innovator companies
from discussions on any of the above
questions is that compulsory licensing is
here to stay, perhaps a rose that has its
thorns, which, nevertheless, must be dealt
with and businesses must manage to
accommodate its challenges. Moreover,
threats rarely, if ever, will work with a
socialist democracy like India. Invite us to
speak to foreign lawmakers and it will
only reveal that the change being
advocated is not collaborative but rather
one being forced upon India. Talk to us as
equals and you may be surprised!
India on the other hand must not gloat in
this victory for its 20,000 plus registered
pharmaceutical companies. We must
understand and recognize that compulsory
licensing is an exceptional tool, to be used
as such, and that the underlying issue may
be related more to the structural
inadequacies of India's health care system,
than to affordable medicines. Policy
makers should appreciate that any
pharmaceutical company innovator or
generic is in the business to make
money; hence the burden of affordable
medicines and health care is not theirs to
shoulder. There are other (better)
alternatives which will solve our health
care deficit, and if done well, will dilute
any undue reliance on a compulsory
licensing regime.
With the Nexavar decision presently on
appeal with the Bombay High Court we
will get further clarification on the legal
aspects of the matter sometime in 2014.
However, early indications, after the initial
brouhaha, are that India will give
compulsory licensing its due importance,
but is willing to level the playing field by
reducing the possibility of compulsory
licensing being used as a tool to bypass
business negotiations. The first
compulsory license arrow, the Nexavar
decision, hit bulls-eye, but the second and
third lend hope. Though it may be too
early to take a call, it seems that the
second arrow is fluttering towards a miss
or a partial hit at best. In early 2013, the
Health Ministry in India recommended to
the department of industrial policy and
promotion, compulsory licenses for three
anti-cancer drugs Roche's Herceptin and
Bristol-Myers Squibb's Sprycel (Dasatanib)
and Ixabepilone. However, none have
issued so far, which goes to show that
India is not trigger happy when it comes
to granting compulsory licenses for
medicines. But, stay tuned to see where
this one ends up.
As if taking a cue from the Health
Ministry's recommendations, BDR
Pharmaceuticals International Pvt. Ltd.
fired the third arrow, seeking a
compulsory license for Dasatanib (used to
treat a certain type of chronic myeloid
leukemia). But that request has recently
been rejected. In the Dasatanib decision,
India's Controller General of Patents
rejected BDR Pharma's request because,
in his opinion, voluntary licensing
discussions were inadequate. Frowning
upon BDR Pharma's reluctance in
pursuing licensing discussions in a proper
business context, the Controller General,
perhaps, saw the compulsory licensing
application as a strategy to circumvent
business negotiations and to let the
provisions of the patent statute
strong-arm the licensing process.
According to the Controller General,
effort (as also required under Section
84(6) of the Patents Act, 1970) in
negotiating a voluntary license must be
diligent and a compulsory license
application cannot be otherwise used to
bypass this procedure. Thus, the third
arrow missed its target with a well
reasoned outcome that reinforced the
importance of plain, old fashioned
business dealings. Simply put, if the
Nexavar decision forced innovators to
talk to generics with diligence and
seriousness, the Dasatanib decision
requires generics to do the same.
Looking from the glass half-full point of
view, the take away here, apart from the
fact that an informed un-biased opinion is
the call of the day, is that all is not lost for
innovators. India is perhaps doing what
others have done (or will do which is
the real fear) but India is also willing to
understand the ramifications of a badly
managed compulsory licensing regime.
The solution lies in the middle and time
will tell if we get there sooner rather than
later or get there at all.
Compulsory Licensing in India An Inconvenient
Reality
Mr. Ashwin Julka (Managing Partner) and Mr. Pankaj Soni (Partner), Remfry & Sagar
PTMG 88th
Conference
The Savoy Hotel
London
17 18 March, 2014