Compulsory licensing – where is India heading?

Debate is raging in India about the potential grant of compulsory licences for three drugs:

• Trastuzumab (used to treat breast cancer).
• Lxabepilone (used in chemotherapy of metastatic or locally advanced breast cancer).
• Dasatinib (used in chronic myeloid leukaemia).

The debate surrounding compulsory licences in India is not new. Compulsory licence proceedings were initiated in 2007 by Natco against Pfizer’s drug Sutent (Sunitinib) (see "India to hear patentees' view in compulsory license cases"), which was used to treat gastrointestinal stromal tumours and Roche’s Tarceva, used in lung cancer treatment. These applications were initiated under Section 92A of the Patents Act 1970 for the purpose of export to Nepal. Section 92A corresponds to the Doha Declaration and permits the grant of compulsory licences for the manufacture and export of patented pharmaceutical products to any country with an insufficient or no manufacturing capacity for that drug in the pharmaceutical sector in order to address public health problems. This is subject to such country having granted a corresponding compulsory licence or having allowed the import of such products from India. However, both applications were later withdrawn.

A second round of discussion arose over Natco v Bayer, involving anti-cancer drug Nexavar. This time the compulsory licence was under Section 84. Under this provision, at any time after the expiration of three years from the date of grant of patent, any interested person may apply to the controller for grant of a compulsory licence for a patent on one of three grounds:

• Reasonable requirements of the public with respect to the patented invention have not been satisfied.
• The patented invention is not available to the public at a reasonably affordable price.
• The patented invention is not worked in India.

The Intellectual Property Appellate Board (IPAB) recently upheld the Patent Office's decision to grant a compulsory licence for Nexavar to Natco.

However, a recent announcement by the Department of Industrial Policy and Promotion involved Section 92 of the act. The drugs involved were Trastuzumab, a Roche drug, and Ixabepilone and Dasatinib, both Bristol Myer Squibbs drugs (at the time of writing, BDR Pharma has made an independent application under Section 84 for Dasatinib). Section 92(1) grants discretionary power to the central government to issue a compulsory licence in circumstances of national emergency or extreme urgency, or in case of public non-commercial use. The statute requires that the grant of the compulsory licence must be "necessary" for such purposes and such a declaration is to be published by notification in the Official Gazette. Further, according to Section 117A of the Patents Act, the notification under Section 92 may be challenged at the IPAB. In addition, the notification may be challenged at the High Court.

An important point that may arise is whether, even after such a declaration is issued, the controller has discretion to grant a compulsory licence or must grant a compulsory licence. While Section 92(1)(i) uses the term “shall” to indicate that the grant of a compulsory licence by the controller will be mandatory if the interested person applies for the grant in terms of the notification, Section 92(2) – which makes Sections 83 and 87 to 90 applicable to such cases – would appear to suggest that the controller has discretion. The rigours of Section 84 may not apply to cases under Section 92. This interesting issue may arise if a compulsory licence is granted under this section.

Another important question is whether the conditions being treated by the drugs intended to be subject to a Section 92 compulsory licence could fall within the scope of Section 92.

With regard to Trastuzumab, according to the National Centre for Biotechnology Information (NCBI), which is part of the US National Institutes of Health, in urban areas only 24 to 33 people out of every 100,000 have breast cancer (in 2005-2007), and in rural areas this drops to seven to 15 out of 100,000. Of these, only around 20% have HER2 positive breast cancer, for which Trastuzumab is primarily intended (see "Is Breast Cancer the Same Disease in Asian and Western Countries?" and "Treatment Options for HER2 Positive Breast Cancer Expand").

With respect to Ixabepilone, in combination with capecitabine, Ixabepilone is indicated for treatment of metastatic breast cancer after the failure of treatment with anthracycline, a taxane and capecitabine (see http://packageinserts.bms.com/pi/pi_ixempra.pdf). Alternatives such as vinorelbine and eribuline mesylate are also used instead of Ixabepilone (see www.ncbi.nlm.nih.gov/pubmed/21050423 and www.current-oncology.com/index.php/oncology/article/view/1024/858).

This data is merely highlighted as an illustration. However, the question remains whether, from a rational and objective standpoint, the government could be in a position to determine that the requirements of "national emergency" or "extreme urgency" were fulfilled for such anti-cancer drugs.

Of course, Section 92 leaves an option for the government to make the necessary notification even for public non-commercial use. Apart from granting this power, the provision fails to provide any further parameters according to which the discretion could be exercised. However, an important question of interpretation arises: whether the public non-commercial use requirement would have to be seen in the context of a national emergency or health crisis, or rather is an independent criterion. In addition, from the angle of public non-commercial use, a draft committee report on the pricing of patented drugs has been issued. How would Section 92 be interpreted in the event that the drugs in question are covered under the new policy, if and when it is implemented? Perhaps the current cases would serve as test cases in this respect – but only time will tell.

The case of intended compulsory licences for the three drugs mentioned above will therefore be interesting to follow and may force the courts to interpret several aspects of compulsory licensing.