For the longest time, Cipla ranked as our leading poster child for the debate on patents and access to affordable medicines. It took on the multinational drug majors at the drop of a hat and was credited with slashing prices of HIV medications to a small fraction of their prevalent rates. Yusuf Hamied, Cipla’s maverick leader, tellingly notes in a recent interview that:
“We had taken the lead to provide affordable medicine for AIDS and I think the time has now come — 10 years later — when we do a similar thing for cancer. I’ve done more humanitarian work than Gates and Buffett put together.”
The tables began turning early this year, when another Indian generic company, Natco filed India’s first post TRIPS compulsory licensing application seeking to slash the patented prices of Bayers’ patented anti cancer drug, Nexavar. In the wake of the compulsory licensing decision, Natco catapulted to prominence as our national hero; a bold pharmaceutical company that refused to cave in to international pressure or to bed foreign partners, but insisted on pioneering the delivery of cheaper and more affordable drugs through a new “compulsory licensing” route. All good so far, particularly on the perception front.
It now turns out that Natco may have committed a fatal legal blunder. Three years ago, it was taken to court by leading US drug major, BMS (Bristol-Myers Squibb) who alleged that Natco had plans to make and sell generic versions of Dasatinib, an anti cancer drug sold by BMS under the brand name “Sprycel”. BMS, which had been selling Dasatinib in India since 2006, specifically alleged that Natco had filed applications to market the drug with the DCGI. Natco’s response to the court was: No, we have no intention of making or selling this drug!
I extract verbatim from its written statement (para 29) to the court: “It is denied that the Defendants intend to launch a generic version of Dasatinib under the name Dasanat.”
In June 2012 however, Natco flooded with the market with Dasanat, prompting BMS to file another application pressing for an injunction before the Delhi High Court. BMS succeeded and the court noted in pertinent part that: “The Defandant shall be bound by their statement taken by them in their written statement, particularly in paras 26, 27 and 29.”
(ps: para 29 of the Natco’s written statement effectively states that it has no intention of launching a generic version of Dasatinib).
A further injunction was granted on 22nd June 2012 with the court restraining Natco from “manufacturing and selling the product which infringes the plaintiffs patent in any manner”. Despite these two orders, Natco continued to sell Dasanat, prompting BMS to file a contempt petition before the court. Natco is yet to file its response to the contempt petition, which is slated to come before the court tomorrow. Foolhardy seems a mild term for such a reckless legal strategy!
The “patent” angle was dealt with only perfunctorily by most reports on this drug tussle, which appear to have focussed more on Natco gaining permission to market a generic version of Dasatinib from the Uttarakhand state authorities. Coming close on the heels of a Parliamentary committee report that severely indicted our government for making a mockery of the drug regulatory regime, these news items naturally raised issues of forum shopping and routine exploitation of regulatory loopholes by drug companies. However, for anyone with a basic understanding of India’s “federal” drug regulatory regime (where regulatory superintendence is shared by both the Centre and the State), what Natco did on the regulatory front was perfectly legal.
Our law permits pharma companies to shop around for the weakest state regulator and procure permission. And Natco may have picked Uttarakhand (“Land of the God’s”) for a variety of reasons, including its proximity to the spectacular Himalayas, a lush green landscape (resplendent with grass and all that) and a spiritually electrifying air that lured many a seeker in the past, including the Beatles, Bob Dylan, Cat Stevens, Timothy Leary, Allen Ginsberg and Robert Thurman, a leading Buddhist scholar in his own right, but more popular for having sired a lethal weapon that killed Bill, Uma Karuna Thurman.
Our law clearly states that if a company wishes to manufacture a drug in any state, it must gain state regulatory permission from that state and cannot rely on DCGI (the central regulator) permission alone. So nothing really out of the ordinary for Natco to have secured this approval from Uttarakhand’s drug regulatory authority.
However, the tricky issue here is one of “patents”, given that the relevant drug (Dasatinib) is under patent (Patent Number 203937 dated April 12, 2010) and an infringement suit against Natco is pending before the Delhi High court. A suit in which Natco explicitly stated that it had no intention of marketing a generic version of Dasatinib. And a suit in which two interim orders were passed, effectively prohibiting Natco from marketing any copy of Dasatinib.
Natco challenged the validity of BMS’ patent before the court well on several grounds including the fact that the patent is allegedly obvious, violates section 3(d), is insufficiently described, has no utility and that the patentee suppressed vital patent information from the Indian patent office, rendering the patent susceptible to revocation under section 8. I have not studied the case in detail to assess whether or not Natco is likely to succeed on this count.
However, the merits of the case notwithstanding, Natco appears to have taken a strong beating on the perception front. It was imprudent of Natco to have averred in court that it had no intention of launching a generic version of BMS’ patented drug. Given its subsequent conduct in flooding the market with Dasanat, this effectively amounts to perjury, a serious offence. It might have simply stated in its reply to BMS that the patent was invalid (which it did in its written statement to the court) and/or that its product does not infringe the patent.
Even more imprudent was Natco’s insistence on continuing sales, despite the injunction. As with many of us, courts and judges come blessed with egos and don’t take too kindly to contempt. Highly unfortunate that a company that played a terrific hand a couple of months ago and won international acclaim by pioneering the use of compulsory licensing is now at the receiving end; with the court likely to perceive it as a contemptuous corporation that took it for a ride. As many litigating lawyers will readily attest: “Aaja meri gaadi mein bait jha” is not a particularly popular line with our judges.
ps: For those interested in tracking this patent infringement suit (Suit No: CS (OS) 2279 of 2009), details are available on the Delhi High Court website, though the latest orders are yet to be uploaded.
pps: image from here.