Posted 06 July 2015
By Michael Mezher
An Indian manufacturer has filed the third-ever compulsory license application in India for AstraZeneca's type II diabetes drug saxagliptin, SpicyIP reports.
Compulsory licensing is a legal provision that allows for the licensing of intellectual property rights without the rights holder's consent.
The power to grant these licenses is seen by some countries, especially low- and middle-income ones, as a powerful tool to ensure important drugs are available and accessible to their citizens. On the other hand, the innovative pharmaceutical industry sees compulsory licensing as a threat to intellectual property rights, and has campaigned to limit their use.
Despite complaints from industry, compulsory licenses are relatively rare. One study found only 24 instances of compulsory licenses being issued for 40 specific pharmaceutical patents between 1995 and 2011. In its history, India has issued only one compulsory license for a drug, Bayer's cancer drug Nexavar in 2012.
On an international level, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) establishes standards for issuing compulsory licenses for World Trade Organization (WTO) members. Outside of TRIPS, individual countries' national law must dictate the specific terms and requirements for compulsory licensing.
In India, compulsory licenses are covered in Chapter XVI of The Patents Act, which establishes the criteria for obtaining a compulsory license as well as the terms of such licenses and the powers of the government related to them.
Compulsory Licensing in India
On 25 June 2015, Lee Pharma filed an application to obtain a compulsory license for Patent No. IN 206543 covering saxagliptin. The patent in question was originally granted to Bristol-Myers Squibb (BMS) in 2007 before being transferred to AstraZeneca.
To obtain a compulsory license in India, a company must satisfy at least one of the grounds established in Section 84 of The Patents Act:
"84. Compulsory licences.—(1) At any time after the expiration of three years from the date of the grant of a patent, any person interested may make an application to the Controller for grant of compulsory licence on patent on any of the following grounds, namely:—
- that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or
- that the patented invention is not available to the public at a reasonably affordable price, or
- that the patented invention is not worked in the territory of India."
Additionally, the company must prove they have made reasonable efforts to voluntarily license the patent before a compulsory license can be issued.
Lee Pharma's Case
According to SpicyIP, it is likely Lee Pharma's efforts to voluntarily license saxagliptin will be enough to satisfy the requirement for reasonable effort in Section 84. The company claims it initiated voluntary licensing efforts with BMS in May 2014, but after several exchanges with BMS and its lawyers, Lee Pharma said it stopped receiving responses.
In its application, Lee Pharma makes the case that it should be granted a compulsory license to manufacture saxagliptin under all three grounds laid out in Section 84 of The Patents Act.
Lee Pharma alleges BMS and AstraZeneca do not import enough of the drug to meet demand in India, where they estimate some 60 million people have type II diabetes. The company also claims the drug is too expensive, costing around 45 rupees per pill, versus the 30 rupees per pill Lee Pharma would charge.
However, there are several possible points of contention to Lee Pharma's claims. First, saxagliptin is one of several dipeptidyl peptidase-4 inhibitors used to treat type II diabetes which are also available in India. Lee Pharma's cost and availability claims are obscured given that patients can already obtain an Indian-manufactured generic version of a similar drug, sitagliptin for slightly less than what Lee Pharma says it would sell saxagliptin for.
Because of the availability of other drugs for type II diabetes, and the relatively small difference in price being offered by Lee Pharma, it is likely the case for a compulsory license will hinge on availability or the specific need for saxagliptin versus alternative treatments.
SpicyIP, IP India (Select PDF dated 29-6-2015)