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| Latha Jishnu: Setting aside Bayer's 'spurious' claims |
| Latha Jishnu / New Delhi Sep 02, 2009, 00:19 IST |
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Two weeks ago Justice S Ravindra Bhat of the Delhi High Court dismissed with costs the writ petition filed by the German pharmaceuticals giant Bayer Corporation against the Union of India, the Drug Controller General of India (DCGI) and Cipla. The importance of Justice Bhat’s judgment cannot be overestimated. It is a clear — and sharp — judgment that puts paid to attempts by foreign companies to modify India’s regulations to suit their commercial interest.
The judge characterised the litigation as “a speculative foray; an attempt to ‘tweak’ public policies through court mandated regimes” and, in a first of its kind, awarded costs of Rs 6.75 lakh. The amount, far from being punitive, is to be shared by the government and the third respondent Cipla, one of India’s top drug companies. However, the point that the judgment makes is strong: Companies with deep pockets may “achieve short term goals of keeping out competitors through interim orders” but the court will impose ‘realistic costs’.
Two principles of India’s pharmaceuticals policy were at stake when Shanti Bhushan began arguing Bayer’s writ petition in November 2008. It challenged the DCGI’s authority to process Cipla’s application for marketing approval for the generic version of an anti-cancer drug sorefenib tosylate that had been patented by the German multinational as Nexavar. In India, it was patented in March 2008 giving it patent protection up to 2020.
By seeking an order to DCGI that it should take into account the patent status of the drug before granting marketing approval to a company manufacturing generic versions, Bayer was trying to bring about a linkage between drug approvals and patents, a linkage that does not exist in most countries (see The curious case of drug regulation, January 21, 2009). In short, Bayer wanted the courts to order a patent linkage system for the country, a smart move for drug multinationals who want to keep cheaper generics out of the market for as long as possible.
The patent linkage system is pernicious not merely because it attempts to club two different functions of regulation and law; it also goes against public health objectives by unnecessarily delaying the entry of cheap generic medicines into the market and thereby adversely affecting access to generic medicines. In fact, the European Union is just now looking into a potentially explosive issue of drug firms delaying the entry of generics in the market.
The Bayer petition has kept all stakeholders on edge from the start. The initial stay granted by the court in November last year had led to the hope (by innovator companies) and fears (by health activists and generic manufacturers) that all marketing approval applications for generic versions of branded drugs would come to a stop. The stay, fortunately, applied only to Cipla’s soranib.
The other and, perhaps, more significant outcome of the case is that Bayer’s attempt to classify all generic versions of patented drugs as spurious has been quashed firmly by Justice Bhat. Bayer had claimed Soranib being an imitation of Nexavar or a substitute was, therefore, a ‘spurious drug’ under the Drugs and Cosmetics Act. Justice Bhat’s conclusion is categorical that generic drugs are not spurious by any yardstick. While the former “is the one that resembles another drug in a manner likely to deceive, we have already held that the disputed drugs manufactured by the parties (generic companies) are different”.
The implications of the Bayer petition were, in fact, extremely grave for generic manufacturers. The Indian Pharmaceutical Alliance (IPA), the grouping of the big companies, had pointed out early this year that apart from a serious conflict of jurisdiction between the DCGI and the Patent Office, the drug multinational’s claim, if upheld, would have led to an erosion of the ‘Bolar exception’ under the Patents Act — this allows companies to experiment with any patented drug with a view to generating data that could then be submitted to a drug control authority — and the introduction of ‘data exclusivity’ through the back door.
So the outcome has come as a huge relief all around. IPA’s secretary general Dilip Shah, who had been badgering different government departments to take a more aggressive stance in the case, calls it a landmark decision. But it may not be the end of the story yet since a disappointed Bayer is likely to appeal the decision before a division bench of the high court.
For Bayer, too, there is much at stake. Nexavar is used to fight cancer of the kidney and the liver and is listed as one of its promising drugs with an earning potential of ¤2 billion ($2.82 billion) annually. That makes it a true blockbuster for Bayer. In India, the drug is reported to be selling at Rs 2.85 lakh for a month’s treatment. Naturally, the Cancer Patients Aid Association which had impleaded itself in the case is cheering, too.
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