Bayer Sues Indian Government to Retain Monopoly Right


Original source: People's Democracy (India)

The German Multinational company, Bayer, had been granted a patent for its drug, Sorafenib tosylate (marketed as Nexavar by the company), in India a few months back. The drug is used for the treatment of renal cell carcinoma (a type of cancer of the kidneys) and for treating advanced cases of hepatocellular carcinoma (a form of liver cancer). It is also being investigated for use in other forms of cancer.

Meanwhile, an India company, Cipla, has applied for marketing approval for a generic version of the drug. Bayer, is now suing the Indian government in the Delhi High Court, on the ground that if Cipla’s request is granted, its patent right would be affected. Prior to filing its application in court, Bayer had requested the Drug Control authorities in India to reject Cipla’s application and also to grant a hearing to Bayer prior to taking any decision in the matter.

The court in its interim order dated November 7, 2008 prohibited the Drug Controller General of India (DCGI) from taking any decision on Cipla's application for marketing approval. The Cancer Patients Aid Association (CPAA) filed an intervention application on January 17, 2009 so that patients' interest could also be represented before the court. On January 19, the court admitted the intervention petition. In a measure of relief to generic manufacturers, the court also held on January 19 that the stay on marketing approval of Sorafenib applies only to the particular drug, and at present there is no blanket bar on registering medicines by generic companies, in situations where innovator companies hold patents for these medicines. The case will now continue to be heard by the Court, till a final decision is taken either way.

Linking Patents to Drug Approval: Contrary to WHO’s Advice

The case filed by Bayer in India has several implications. The most important implication is that it seeks to link the patent status of a drug with the procedures related to the drug’s marketing approval. Across the globe, such linkage is the exception rather than the rule. That is so because the body responsible for granting (or rejecting) patent applications is distinct from the one that grants approval for marketing. Patent applications are decided by Patent offices which have a certain kind of expertise which helps them to decide whether a patent application should be granted. On the other hand, drug regulatory agencies, have expertise in checking the safety and efficacy of a medicine. To ask the latter to do the job of the Patent office is incorrect because it does not have the expertise to decide on patent related issues. That is why the functions of the two are kept separate. This position has been articulated by the World Health Organisation (WHO) too. In a report published in 2006 it says: “Medicines fall under two separate legal and regulatory systems: the intellectual property system and the drug regulatory system. These systems have different objectives, are administered separately and function independently. Efforts to integrate these two systems via data exclusivity, “linkage” or other means are likely to have negative implications for access to medicines. Thus, (developing) countries would be well advised to keep these systems separate, and to reject any and all efforts to make connections between them.”

The US is an exception, in terms of the application of this understanding – the US Food and Drug Administration (US FDA) does look at the patent status of a drug before issuing a marketing approval. But the US FDA itself admits that the system is fraught with problems and is known to have commented: “the FDA does not have adequate expertise or resources to review the applicability of patents, and it has been unable to prevent abuses of the system by patent holders that have led to delays in the availability of generic drugs.”

What the US FDA itself admits, is the key reason why drug regulatory agencies are not required to examine the patent status of a drug. They do not have the expertise to form an opinion as to whether a patent that has been granted is actually valid. The Indian law, for example, has a provision for post-grant opposition, i.e. the grant of a patent can be challenged on several grounds after it is granted. A blanket bar on granting marketing approval to drugs which have been granted patents would mean that this provision becomes infructuous – the generic company would not be able to make use of this provision immediately even if a patent grant is overturned.

Attempt to bypass Health Safeguards in Indian Law

Moreover, both the TRIPS agreement and the Indian law allow medicines to be legally registered (i.e. obtain approval from the drug regulatory agency) even when the drug is under patent protection. It can be allowed so that the generic version of the medicine can be made immediately available as soon as the patent term of a medicine expires or as soon as a compulsory license is issued to the generic company even while the patent of the innovator company is still valid. It can thus be allowed in situations where the medicine is used for research purposes (known as the “Bolar” provision in TRIPS). This provision is an important health safeguard because it allows generic manufacturers to conduct tests on its generic version, so that it is ready for marketing as soon as it is legally possible. In the case of life saving drugs (such as an anti-cancer drug like Sorafenib), even a delay of a few months in the introduction of cheaper generics can mean hundreds or thousands of deaths among patients who would die, not because there is no treatment, but because the treatment with a patented medicine is too expensive. In the US Bayer’s Nexavar cost US$ 5,400 per month to a patients, that is more than Rs 250,000 per month. Over 99 percent of Indian patients would not be able to afford such costs, even if they were to sell all their assets.

It needs to be understood that the mere act of registering a medicine and getting a marketing approval does not constitute an infringement of a patent. If, after this step, the generic company were to market the drug, the patent holder has the right to sue the company for patent infringement. But the place to do so is not the drug regulatory agency, but the Patent office.

If Bayer’s plea is upheld, it would be in violation of the Indian Patent Act. This would be extremely unfortunate, as it would mean overturning some of the health safeguards that the Indian parliament had put in place when the Indian Act was amended in 2005 to make it TRIPS compliant. It may be recalled that the Indian parliament, while putting in place these safeguards had taken into account the very large mobilization of people – in India as well as across the globe – demanding that India continue to function as a source for affordable generic medicines. So the Bayer case has implications for access, not just for patients in India, but for poor people in large parts of the world.

Further, it would mean giving sanctity to higher standards of patent protection than what is required by the TRIPS agreement. This is precisely what Bayer is aiming for. It seeks to safeguard its own monopoly right and a one billion Euro market in the near future. It also wants to set a precedent that other drug MNCs can benefit from. In essence it would mean that the entry of generic versions of life saving drugs would be delayed.

Government Reluctant to Defend its own Law

In the midst of this controversy, the conduct of the Drug Controller General of India’s office has been strangely ambiguous. When the interim order was passed by the court in November, they appear to have made little or no efforts to put forward a counter position. Even on January 19, it was left to the Cancer Patients Aid Association to argue the case in favor of poor patients. In fact, a few months back, the DCGI’s office had initiated a move to link the drug approval process with its patent status. The DCGI had gone public on this issue and had stated: “We are going to seek the list of the drugs from innovator companies that have received patent in India. Once we have the database of the drugs which have been granted patent, we will not give any marketing approval to their generic versions” (Economic Times, April 26, 2008). While the move is yet to fructify, the very attempt to do so raises several questions. Why is the premier drug regulatory authority in India interested in curbing its own powers by becoming subservient to the decisions of the Patent office. Is this a result of influence that is being exerted by drug MNCs on the DCGI’s office?

In 2005, the Left parties were in a position to influence the amendments to the Indian Patent Act. We understand that many of these amendments were not to the liking of many powerful forces – drug MNCs, as well as elements within the government who would like to promote corporate interests. Ever since then, there have been a series of attempts to undermine the health safeguards in the Indian Patent Act. Almost on every such occasion, the government of India has chosen to remain a silent spectator, at best. Clearly, this government appears interested in making a mockery of an Act of parliament.