The Dasatinib Dance Continues: Compulsorily Licensing and Public Non Commercial Use


The Dasatinib CL controversy continues to rage, with two government agencies locked in a clear tussle. While the Health Ministry is keen on activating the section 92 compulsory licensing (CL) route, the DIPP appears more cautious on this count.

In the meantime, the Union for Affordable Cancer Treatment (UACT) petitioned the USTR head, Michael Froman citing concerns that the US pressure on India and the announcement of an out-of-cycle review of India’s status has resulted in the Indian Government shelving the Dasatinib CL decision. Here are some extracts from the letter:

 “The BMS price for dasatinib in India is 6,627 rupees for a daily dose of 100 mg. This is roughly $108 per day, for a country with a per capita income of just $1,570 per year, and where most patients pay for cancer drugs out of pocket.  Companies seeking a compulsory license have offered to supply generic versions of dasatinib for $4 per day, and that price would likely fall if competition was permitted.

 The Indian Ministry of Health has requested that the Department of Industrial Policy and Promotion (DIPP) issue a compulsory license for dasatinib. The DIPP is reportedly opposing the compulsory license, motivated primarily by concerns that a compulsory license would create trade and foreign policy problems with the United States.

 The decision to put off judgement on issuing a compulsory license came during a period when the USTR officials have criticized the Indian government over two other disputes involving drug patents, including the US government criticism of the rejection of the Novartis evergreening patents on imatinib, and US government criticism of the Comptroller of Patent’s decision to grant a compulsory license on Bayer’s patents on sorafenib, a $65,000 per year drug for kidney and liver cancer.

 ….In our view, opposition to the granting of a compulsory license in India is a de facto endorsement of excessive pricing, a rejection of the goal of access to medicine for all, and a death sentence for leukemia patients.”

For more details around this controversy, see the KEI website, which hosts an excellent range of writings and data around issues of IP and public health. And UACT’s submission to the USTR on its out of cycle India review.

The Scope of Section 92

Section 92 is largely modeled on Article 31 of TRIPS and reads as below:

“If the Central Government is satisfied, in respect of any patent in force in circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use, that it is necessary that compulsory licenses should be granted at any time after the sealing thereof to work the invention, it may make a declaration to that effect, by notification in the Official Gazette, and thereupon the following provisions shall have effect, that is to say—

(i) the Controller shall, on application made at any time after the notification by any person interested, grant to the applicant a licence under the patent on such terms and conditions as he thinks fit;

(ii) in settling the terms and conditions of a licence granted under this section, the Controller shall endeavour to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.”

In a fresh appeal to DIPP the health ministry stated that a CL should be granted for Dasatinib under `public non-commercial use’ and that government schemes could help with the cost of producing Dasatinib. The drug cannot be procured in large quantities due its exorbitant price. The Health ministry opined that a compulsory license issued under section 92  ‘public non-commercial use’ will allow the Government agencies (Indian Railways, CGHS, Army Hospital) to source generic versions of Dasatinib at a fraction of the cost.

DIPP Questions

In the latest salvo, the DIPP has apparently asked a series of questions to the Health Ministry. SpicyIP managed to scoop this list from a confidential source, as below:

  • Whether Dasatinib is being used as first line of treatment for CML
  • What is the impact of Dasatinib on CML? Can it be considered as a cure for the disease?
  • Indicate the progression of patients who are prescribed Dasatinib. Compare it with impact of generic imatiniib mesylate
  • Information on allocation for procurement of cancer medicine such as dasatinib by the Govt doe supply to public hospitals free of cost.
  • Minutes of meeting held on 13/3/2014 indicate that 14 million people are diagnosed with cancer worldwide. clarification may be provided on this figure is for all cancers or occurrence of CML, as reflected in the health and family welfare letter which states that the information pertains exclusively to drug dasatinib.
  • The cost comparison btw Nilotinib and Dasatinib appears to be incorrect as it is based on market price of dasatinib and discounted price under patients assistance programme for Nilotinib. Clarification on exact costs (market price) may be provided.
  • The probability of occurrence of this type of cancer is 0.0001% and there has been no alarming trend in the incidence. Can such a situation be categorized as a national emergency or an extreme urgency? please provide rationale and detailed explanation
  • Information may be provided on the extent (no and total cost of the govt procurement of drug dasatinib for supply of CGHS, defence and railways for years 2011, 2012, 2013.
  • Indicate the policy of govt wrt to treatment of CML through the National Cancer control prog. The extent of purchases of drugs under this programme may also be indicated.

 The questions seem fairy logical and will no doubt ensure that as and when the license issues, India is on safe ground from the point of view of a potential TRIPS challenge.

The first set of questions remind one of the kind of calculus engaged in routinely by NICE (a UK agency that decides whether or not to procure new drugs for the public health scheme run by the NHS). Incidentally, NICE decided not to procure Dasatinib, since “Dasatinib… did not provide enough benefit to patients to justify their high cost and did not qualify for special consideration”,

National Emergency and Extreme Urgency

The questions pertaining to emergency and national urgency appear to suggest that the DIPP reads the terms rather strictly to refer to pandemics and the like which afflict a significant percentage of the country’s population. Readers may recall that when Thailand issued compulsory license for antiretroviral drugs citing national emergency, critics lambasted Thailand stating that “it’s hard to argue that Thailand has an AIDS epidemic, when its incidence is a little over 1% — and countries such as South Africa are well over 20%. The same goes for heart disease.”

The numerical metric forces one to ask: Can there be a numerical qualifier for national emergency or extreme urgency? Are 1% of a country’s population not sufficient enough, particularly in  a country such as India when 1% of India’s teeming 1.2 billion would convert to a 120 million people who need the drug?

The ambiguity associated with these terms and their potentially strict construction could be one of the reasons why the Health Ministry changed tack and decided to push for “public non-commercial” use. After all, this is a relatively less controversial option. However, given that this term has not been subject to legal interpretation as yet, its ambit is unclear. Might this term be interpreted in the context of a national emergency or extreme urgency type health crisis (doctrine of noscitur a sociis), or as an independent criterion altogether?

Public Non Commercial Use

In a report for the JPO, one of the authors of this piece had opined that public -non commercial use is of potentially wide ambit and simply requires at a bare minimum that the government does not make a profit on the use of the patent (rather the use has to be strictly “non commercial”). The report drew upon a Resource Book on TRIPS and Development by ICTSD-UNCTAD and noted:

“Apart from cases of ‘national emergency’ and ‘extreme urgency’, s 92 can be invoked to further a ‘public non commercial use’. This term has not been defined but presumably, any programme where the government….provides the drug at cost or for free would presumably amount to a public non- commercial use.”

As such, the use of the patent by the government for any public health scheme will be perfectly in order. Section 92 also clearly envisages the grant of the licensing authorization to a private third party, so long as the third party also uses in a “non commercial” manner and for a “public purpose”. Does this mean that the government can pay a third party out of its own pockets (presumably at a rate that constitutes sufficient incentive for the private player to so supply) and then distribute the drug free of cost or at cost through tis public health programme?

It would appear so. The bottom line is this: so long as the drug does not find its way to the open market, but is strictly limited to distribution within government public health networks, the said license under section 92 would be a perfectly legitimate one.

However the true ambit of section 92 and public non-commercial use will emerge only after it is tested in a court of law and/or a WTO dispute resolution panel.

All of this raises the issue: given the interpretative uncertainties associated with section 92, why aren’t our generic majors applying for compulsory licenses under section 84? For the section 84 route is one that does not depend on government discretion but can be invoked by generics as a matter of right, as explained below.

Whither Section 84?

Readers will recollect that sometime around March 2013, BDR pharma a generic drug maker applied for a CL for Dasatinib under Section 84. The Indian patent office however rejected the CL application stating that BDR had failed to make out a “prima facie” case for the grant of a CL. Subsequent to this development, the Health Ministry began triggering the section 92 route and ended up in a tussle with the DIPP, which insisted upon more rigorous data and facts before section 92 could be invoked.

The key difference between the section 84 and the section 92 route is that while section 84 caters to instances of patent abuse (where the patentee sells the drug at an excessive price or does not make reasonable quantities available to the public), section 92 does not require a specific abuse on the part of the patentee, but can be triggered more broadly on “public interest” grounds. For those interested, the JPO report mentioned above carries a more detailed discussion on this count.

Another key distinction between section 84 and 92 is that while section 84 is a legal entitlement in favour of competitors (who can trigger CL’s upon the establishment of certain grounds), section 92 rests largely on government discretion and depends solely on the whim of the government. One wonders none of our generic majors are interested in going the section 84 route for Dasatinib or for that matter, for any other drug?. It’s a pity that a strong CL entitlement in section 84 (quite unlike many other countries) remains unused despite more than 8 years of the Indian pharma patent regime coming into operation. Is the main barrier legal costs and uncertainty? After a thumping victory in favour of Natco, one expects that other generics would have more faith in triggering this process. As for costs, some of our generic majors routinely challenge patents in the US spending a fortune!

One also wonders why BDR did not take another shot at triggering this license. After all, its application was never rejected on merits. But merely on the ground that it had failed to demonstrate that it negotiated in good faith. All it could have done was to reinitiate the voluntary licensing process, live out the mandatory 6 month period and then reapply for the CL. Has it entered into a private deal with BMS? Or simply decided that this was not worth the trouble anymore? Only time will tell.

 This post was co-authored with Madhulika Vishwanathan

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