India Patent Office to Make Key Decision on Export of Roche, Pfizer Cancer Drugs

NEW DELHI - India's patent office will hold hearings Feb. 28 and 29 to decide whether India's Natco Pharmaceuticals should be awarded the country's first compulsory license to make and export to Nepal generic cancer drugs patented locally by Roche and Pfizer.

"This is the first case in India. A compulsory license will allow companies like ours to manufacture and export drugs to least developing companies," Natco's company secretary M. Adinarayana told PharmAsia News.

Pfizer's Sutent (sunitinib) and Roche's lung cancer drug Tarceva (erlotinib), which was granted a patent in India in 2007, are at the center of a dispute over rules about when to allow generic manufacturing.

But Tapan Ray, director general of the Organisation of Pharmaceutical Producers of India, a scientific and professional association representing international and large drug companies, said the pleas for a compulsory licenses need to be viewed in perspective.

"Without commenting on the specifics of the application by Natco our general view is that granting cumpulsory licenses should be very specific. It should be used only in cases of emergency and should not give commercial advantage," Ray said in a phone interview from Mumbai.

Tarceva's patent was granted after India's new patent law passed in 2005 that brought the country in line with World Trade Organization guidelines on intellectual property rights.

The case tests a framework of national laws and trade agreements put into place in the past few years that sought to allow developing access to cheaper generic versions of brand drugs in cases of extreme urgency while offering patent holders greater protection.

A Mumbai-based lawyer handling intellectual property rights cases for drug firms, who declined to be named, said the problem is that if such licenses are granted, companies may stall negotiations on broader agreements for manufacturing generics.

"The trend since the Indian Patents Act was passed has been to seek agreements on generic manufacture of drugs that are close to patent expiry or where there is a need to sell generics at lower cost," the lawyer said.

He noted that compulsory licensing requires a royalty payment to the patent holder and India has not set a rate so that any move to grant such a license would likely involve complex litigation.

However, even if Natco is granted the compulsory license for Nepal, the case may set a precedent for domestic use because the Indian Patents Act gives such permission only after three years from the date when the patent is granted, which in the case of Tarceva is 2010, the lawyer said.

The three-year clause does not apply to permission needed to export to a poor country.

"It is an interesting case because there are solid arguments for selling cheaper drugs to Nepal, which is a poor country. But it also could be used by some companies to gear up generic manufacturing operations locally ahead of patent expiry."

An Indian Patent Office official, who declined to be named, said the hearing had started on the Roche case Feb. 28 and the Pfizer case would be held Feb. 29. He said he expected representatives from Roche and Pfizer to attend the hearings. Pfizer did not immediately respond to an email seeking comment while Roche said it could not elaborate on the case.

"Roche cannot provide public commentary on Natco's application for a compulsory license as we are currently undergoing legal proceedings against Natco," Lester Davis, a Roche spokesman said in an email. Pfizer did not immediately respond to an email request for comment.

Natco has stopped sales of a previously made generic version of Tarceva for sale in India since the patent to Roche was granted in 2007. But another firm, Mumbai-based Cipla started making a generic version of Tarceva a few months ago and Roche has filed a court case to halt the company from further domestic sales.

One tablet of Tarceva costs about 4,800 rupees ($120) in India, where tens of thousands of people need the medicine. Cipla's generic is available for nearly one-third the cost.

Tarceva Smacks Of Gleevec Case

Patent lawyers say the developments around Tarceva have similarities with Novartis' Gleevec (imatinib mesylate) case. An Indian high court upheld in 2007 the country's patent laws, which were challenged by Novartis in the case of its best-selling cancer drug, Gleevec (Also see "Insider Analysis: The Glivec Patent Saga – Effectuating “Efficacious” Patent Norms In India" - Scrip, 22 Oct, 2007.).

The ruling meant that domestic firms, which derive most of their revenues from generics, could continue to produce generic versions of Gleevec (marketed as Glivec in India). Generic versions of the drug in India cost about one-tenth what Novartis charges for the drug, which is roughly 105,000 rupees ($2,600). However, Novartis is still challenging Indian patent laws.

India provides the majority of cheap generic drugs to developing countries, a status earned by earlier laws that allowed firms to slightly tweak a patented drug and make a "new molecule" for sale domestically and for export to many countries without cancer drugs widely available for less than in developed countries.

"If compulsory licensing is not resorted to, 98 percent of India's population will not be able to afford any of the patented drugs," said Y.K. Sapru, president of the non-profit Cancer Patients Aid Association.

That status has also made the Natco case important to advocates of finding ways to make cheaper drugs available to other poor countries.

"India is the only source for generic drugs for developing countries. It has the capacity to manufacture and has many generic producers," Leena Menghaney, a New Delhi-based drug access campaigner for Doctors Without Borders told PharmAsia News.

The Indian government has not laid down rules on how much royalty a firm should pay a patent holder to make patented medicines, according to Menghaney, who added that the absence of such a guideline could delay a decision as patent owners would seek high royalties to protect their interests.

Natco reportedly offered a five percent royalty payment to Roche to make a generic version of Tarceva.

"This case will test how the legal mechanism works," said Menghaney.

An Indian Patent Office official, who declined to be named as he is not authorized to talk to the press, said he expected representatives from Roche and Pfizer would attend the hearings.

The Pharmaceutical Research and Manufacturers Association recently characterized India's IP protection as "inadequate" and "deteriorating" in a letter to the Office of the U.S. Trade Representative. The trade group said India's "inaction" to implement provisions required by TRIPS remains a major concern (Also see "IP Protection Concerns Grow In India, PhRMA Says" - Scrip, 6 Jan, 2008.).

- Ed Lane ([email protected])