Drug Regulation Patent

Why is the DCGI trying to implement a ‘patent-registeration’ linkage system in India?


The Drug Controller General of India – Dr. Surinder Singh – has made a public statement that he intends to link up regulatory approval for drugs to the patenting system i.e. he has gone on to record to state that the DCGI will not grant regulatory approval for generic drugs if in case the innovator drug still has a valid patent covering it. Such a move would severely delay the entry of generics into the market. (The Mint, the Business Standard & the Economic Times have all carried excellent reports on this topic. In fact ET’s Khomba Singh was the first to break this important story.)
The DCGI said: “The decision was taken at my level as we need to reassure the industry that patents are honoured in India. I have asked drug companies to provide the details of the patents granted for their new medicines. Whenever a second application seeking marketing approval for the same medicine comes, we will pass on the details to the patent office for an expert opinion.”

So who’s the DCGI been talking to?

Readers may remember that Kruttika had recently blogged on a recent effort by the OPPI (an organization of ‘research based international and large pharmaceutical companies’ in India) to ensure that the DCGI linked up with the Patent Office before granting marketing and regulatory approval for generic drugs. This was obviously a move to prevent and pre-empt any repeat attempt of Cipla’s audacious (and successful) move to blatantly infringe Roche’s patent and then wait to be sued. In the Roche-Cipla case although Cipla did not have a valid patent it did have regulatory approval from the DCGI to market its drug.
The DCGI seems to have responded swiftly to OPPI’s suggestion to incorporate such a policy without thinking through the implications of his actions.

What exactly is this proposal about and does any other country follow it?

What the DCGI is proposing is actually called the ‘Patent-Registration Linkage’ system. This provision is a regular feature in Free Trade Agreements that the USA signs with several countries such as Australia and other developing countries such as Chile. Its been a pet project for Big Pharma for quite some time. This ‘linkage system’ requires that the generic manufacturer proves to the drug regulator that the drug for which he seeks approval is not covered by a valid patent. The aim is to create a second tier of protection against possible patent infringement and prevent a Cipla like ambush.
In fact in 2006 PhRMA in its submission to the US Government made a request to invoke special 301 measures against Chile since it had failed to implement the ‘Patent-Registration Linkage’ System. (Please click here for a more detailed report). (For an extremely detailed CPTech note click here)

Does the U.S.A have such a law?

No, the USA does not have this exact law. However it has a similar provision of law, which has been drawn up in a completely different historical context. In the 80’s when America was aiming to increase competition amongst generic drug manufacturers it passed the Drug Price Competition and Patent Term Restoration Act, (also known as the Hatch-Waxman Act) which amended the Federal Drugs and Cosmetic Act. The Hatch Waxman Act made two significant concessions in favour of generic companies. Firstly it waived the need for generic companies to conduct their own clinical trials for a generic drug as long as they could prove that their generic drug was ‘bio-equivalent’ to the original patented drug which had already gotten market approval from the FDA. Secondly it allowed for the Bolar exception.
The important caveat however was that generics could launch their drug only 5 years after the original drug because of the strict data-exclusivity clause in America i.e. the generic drug manufacturer could not use the original clinical data generated by the patent holding company to gain market approval for a period of 5 years. Clinical trials are an extremely expensive process and it is unlikely that any generic manufacturer could afford to hold its own clinical trials and still sell the drug at an affordable price.
So there you have it, the reason for the FDA linking up to patents was because America had a data exclusivity law. Therefore the FDA had to ensure that the generic drug in question was not using the clinical information generated by the patent owning company within a period of 5 years and thus it had to delve into whether or not they had gotten a patent. (Please click here for a detailed note on the Hatch Waxman Act)
India on the other hand does not have any data-exclusivity laws. The Satwant Reddy Report on data exclusivity clearly recommended against such a move since it was not required by TRIPs. As recently as February Yasha had blogged on a report which stated that the Govt. did not want to extend data exclusivity to even Traditional Knowledge. So why in God’s name are we trying to push for this ridiculous provision? (Shamnad, Sarah Hiddleston (of the Hindu), the Express & Mr. Anand Grover have written excellent articles on data exclusivity, 2 years ago when the Govt. was considering such a move)

Does the EU have such a law?

Big pharma did try to introduce such a provision in the EU but met with stiff opposition. The European Generic medicines Association in a 2006 press release stated that: It is important to stress that patent linkage is contrary to EU regulatory law and undermines the recently introduced Bolar provision which seeks to encourage quick access to the post patent market for EU generic medicines. Moreover, linking generics approval to patent status would push medicines authorities into the domains of patents, a far cry from their true role in scientifically assessing the quality, safety and efficacy of pharmaceutical products. Medicines agencies in the EU are already under unprecedented pressure on resources as a result of the new EU Pharmaceutical Legislation. This sort of added pressure is simply unacceptable. The proponents of patent linkage are purposefully confusing this issue with practices in the United States, practices which have no application to the EU regulatory system.

So what exactly is the link between the Drug and Cosmetics Act & the Patents Act?

There is no link so far. As D.G. Shah and many others have commented, the move to link marketing approval to the patenting system is without any legal basis what so ever. The Drugs and Cosmetic Act which is administered by the DCGI and the Patents Act which is administered by the Controller General of Patents are two different legislations. The DCGI has no power to link up the Drug & Cosmetic Act with the Patents Act without a legislative mandate for the same. Apparently an official from the DCGI has stated that they can do so with a mere change in the rules to the Drugs and Cosmetics Act.
The DCGI will change the rules and then the rules will promptly be challenged, a lot of lawyers will become rich and then the rules will be held void by a court of law for a simple reason – lack of competence because such a proposal is undoubtedly a question of policy which only the Parliament can decide and not the DCGI which is a mere statutory authority.
This is settled law – the Supreme Court back in the 50’s case of In Re Delhi Laws had held that an ‘essential legislative function’ cannot be delegated to statutory authorities and policy-making is essentially a legislative function, which is beyond the competence of a statutory authority such as the DCGI. If anybody can do this it is the Parliament or alternatively the President through an Ordinance.
PharmaBiz in an article today mentions that the DCGI is in fact moving towards releasing guidelines to implement this policy.

What’s going to happen if the Parliament actually implements such a law?
Complete and utter chaos! The DCGI and the Indian Patent Office are having a hard enough time co-ordinating their own offices. Sai had recently blogged on the abysmal state of affairs at the DCGI. They are not even in a position to effectively carry out their own work of drug regulation, forget dabbling in the finer nuances of patent law. The Patent Office is in no better a position since it is so strapped for resources that it cannot even co-ordinate its four offices properly leading to debacles like the HUL-EUF case. They don’t even have a computerized database on patents granted! To expect these two institutions to co-ordinate with each other is a recipe for disaster. The sheer institutional inertia will lead to extreme delays in co-ordination leading to even further delays in the release of cheap generic drugs into the market, leading to increased prices of drugs which in turn will lead to several people dying and the country suffering from a massive public health crisis. 🙂 Okay it may not be that bad but I hope you get the point.
The present state of affairs serves the purpose: The Patent Office grants patents, the DCGI grants marketing approval & the judiciary decides who’s right and who’s wrong. In short we have a perfectly balanced system, given the circumstances and we shouldn’t needlessly try to complicate matters for ourselves. At the most the DCGI should attempt to replicate the ‘Orange Book’ only to the extent of fulfilling the information deficit i.e. so that information on innovator drugs and their generic versions is easily available.
I know that brevity is the wit of the soul etc. etc. so I will end with my apologies for this extremely long post.

Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

9 comments.

  1. AvatarAnonymous

    I believe that there is indeed a linkage already in the Drugs and Cosmetics Act for patent purposes and approval from DCGI.

    Please refer to form 44 of Drugs and Cos. Act [relating to approval for new drugs].

    Finally, The DCGI has now said that it would give marketing approvals to the drugs that have only process patents in the country while denying permission to the low cost Indian versions of product-patented drugs. …

    [refer pharmabiz article]

    Reply
  2. AvatarPrashant Reddy

    Dear Anonymous,

    It would be great if you could pin-point the link in form 44. Does it merely ask for patent information or is it something broader?

    Prashant

    Reply
  3. AvatarAnonymous

    Dear Prashant,

    It ‘merely’ asks for the patent information.
    But for that matter there is no bar on the DCGI to grant/ stop approval.

    So, I believe, in theory should a generic applicant apply with relevant information contained in his F.44, it would be up to DCGI to stop approval.

    Look at it from another perspective, there is nothing that does not grant him the authority to withhold approval as well!

    Reply
  4. AvatarPrashant Reddy

    Dear Anonymous,

    Thank you for the update on Form 44 i.e. it asks for patent information but does not require the DCGI to bar approval on the basis of the patent information.

    On your second point of looking at it from another perspective I must disagree with you: If in case a statutory authority is with holding approval for a certain product it is necessary for the authority to give reasons for doing so. He cannot arbitrarily deny approval. When he is granting such approval he will have to do so on the basis of the statute or the rules. As of now I think we can both agree that the statute does not provide the DCGI powers to deny approval on the basis of patent information. The point where both of us may agree to disagree on is the power of the DCGI to formulate rules to such an effecy. In my view this would be excessive delegation of powers (something already discussed in my post). I would like to know your views though: do you think the DCGI has the powers to formulate such rules and effect a major policy change in drug regulation?

    Prashant

    Reply
  5. AvatarAnonymous

    Prashant,

    From what I have seen of DCGI and heard about its workings [don’t question me further]… any thing is possible at DCGI Office.

    They might as well formulate rules that will hold approvals for product patent based applications….

    This is what the Pharmabiz report also mentioned.

    So, yes… without commenting on the powers, any thing is possible and be sure, one way or the other, both Innovator and generic companies are already oiling the machines and keeping their ammunition [of all forms] READY.

    Reply
  6. AvatarPrashant Reddy

    You sound like you’ve got yourself a seat at the frontlines of this battle which is definitely going to turn ugly. Please do pass on the spicy bits to us on the blog as and when is appropriate for you. 🙂

    Reply

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