The Use of Compulsory Licences in Pharmaceutical Industry An by kylemangan


									The Use of Compulsory Licences in
     Pharmaceutical Industry

       An Indian Perspective

                  T C James
  Department of Industrial Policy & Promotion

     What is Compulsory Licence (CL)?
A licence granted by the state, rather than by
the Patent owner, to use a patented invention
subject to certain terms and conditions.
             Where did it Origin
In the French Industrial Property Law of 1791
Later adopted by most countries.

Public good
Exploitation for improvement

Patent is a privilege granted by the State; therefore State
retains the right to limit that privilege for greater public
Patent is a monopoly right; CL is to ensure monopoly does
not lead to anti-competitive practices and exploitation of
general public
Draws from Article 27 (1) of Universal Declaration of
Human Rights: Everyone has the right freely to participate
in the cultural life of the community, to enjoy the arts and to
share in scientific advancement and its benefits.
 Paris Convention on Protection of
    Industrial Property and CL
Article 5 recognises the right of countries to
grant CL to prevent abuse of rights, e.g. failure
to work
CL should be non-exclusive and non
Application for CL to be entertained only 4
years after filing of application or 3 years after
                  TRIPS and CL
  Article 31 of TRIPS Agreement provides flexibilities to
  national governments to allow use of patent without
  authorisation of the right holder in certain circumstances
  such as
     National emergency
     Other public emergency
     Non-commercial public use.
• CL should be
     In individual cases
     Subject to payment of royalty
     Non-exclusive and non-assignable
     For limited scope and duration.
  Post-TRIPS Pharma Sector CLs
Country   Drug        Date of  Description
Zimbabwe All HIV      May 2002 Production and
         drugs                 import
Malaysia Didanosine   November Import for
         Zidovudine   2003     government use
Mozambiq Stavudine    April    Local
ue       Lamivudine   2004     production
Post-TRIPS Pharma Sector CLs…
Country     Drug          Date of   Description
Zambia      Stavudine     September Domestic production
            Lamivudine    2004
Indonesia   Nevirapine    October   Domestic production
            Lamivudine    2004      for government use
Thailand    Efavirenz     January   Government use
            Lopinavir     2007
Brazil      Efavirenz     May 2007 Government use
Post-TRIPS Pharma Sector CLs…
Country   Patented       Date of     Description
          invention      Issue
USA       Immunex        2002        •Manufacture, sale
          tumor necrosis             and export
          factor (TNF)
                                     •Granted by courts
          Rxdelivery     2005
          system for
          drug eluding
          stents (DES)
          Guiding        September
          catheters      2006
          devices for
 Post-TRIPS Pharma Sector CLs …
Country Drug                            Date of Description
Canada   Lisinopril                     May       Manufacture and
                                        2004      export to USA
Italy    Imipenem Cilistatina           June      To remedy
         (antibiotics)                  2005      anticompetitive
         Sumatriptan Succinate          Februar
         (migraine drug)                y 2006
         Finasteride (Prostate cancer   March
         and baldness drug)             2007
Post-TRIPS Pharma Sector CLs …
Country        Drug                Date of  Description
Taiwan         Tamiflu             Nov 2005 Domestic use

Guinea         HIV-AIDS            April     For import
               drugs               2005
Eritrea        HIV-AIDS            June 2005 For import

Source: Knowledge Ecology International Research Note 2 by James Packard
Love, 31 March 2007
   Use of CLs in Pharma sector:
        Some observations
Initiatives came from generic pharma companies or
Use of CLs by developed countries were generally as a
remedy to anti competitive practices
Developing countries used CLs to meet public health
needs mostly in the area of AIDS and HIV
Use by developing countries was mostly because of the
high price of branded drugs
Use of CL resulted in price reduction of the branded
drug in some instances;lead to negotiated prices in some
Many countries licensed imports only
Royalties were prescribed
   Doha Declaration on TRIPS and
        Public Health (2001)

Recognised right of national governments to
determine what is emergency
Allowed use of compulsory licences to meet
the requirements of countries without
adequate manufacturing capacity
Canada issued CL for TriAvir for export to
Rwanda in October 2007.
          Indian Patent Law: General
Patents are granted to encourage inventions and to ensure working of
patents in the country
Exploitation of patent right has to be in a manner conducive to social and
economic welfare and to a balance of rights and obligations
Patents are not to impede protection of public health and nutrition and
should act as instrument to promote public interest specially in sectors of
vital importance for socio-economic and technological development
Patentee is not to abuse the rights
Patentee is not to resort to restrictive trade practices
Patents are granted to make the benefit of the patented invention
available at reasonably affordable prices to the public [Section 83]
   Patent law envisages a balanced regime that secures
      rights for inventors and ensures public good.
  Compulsory Licence: Grounds

Non-satisfaction of the reasonable requirements of
the public
Non-availability to the public at a reasonably
affordable price
Non-working in the country [Section 84]
Nothing could be worse for the country than that
foreign patents should be protected in this
country, while the industry is carried on abroad -
Cripps, British Parliamentarian.
        Compulsory Licence:
Non-satisfaction of reasonable requirements
  Refusal to grant licence on reasonable terms
  Non-meeting demand for the product to an
  adequate extent or on reasonable terms
  Non-development of market for export
  Inadequate development of commercial activities
  in the country
        Compulsory Licence:
Application to be made 3 years after grant of
patent only
Any person can apply, but must clearly state
his interest
Examination of application and grant of CL
by the Patent Office
   Consideration of Application for

Controller of Patents will consider
  Nature of the invention
  Efforts made by patentee to work the patent
  Ability of applicant to work the invention to the
  public advantage
  Efforts made by applicant to get the licence.
     CL: Terms and Conditions

Licence is
  For specific period
  For predominantly Indian market
Reasonable royalty to be made
Product to be made available to the public at
reasonably affordable price
CL can be terminated on change of circumstances.
                        Special CLs

  On Government notifying
     Circumstances of national emergency
     Circumstances of extreme urgency
     A case of public non-commercial use
        Public health crisis relating to AIDS, HIV, TB, Malaria and other
• At any time after grant
• No need for prior negotiation with patentee [Section
         CL: Related Provisions

Revocation of patent on the ground of non-working
or the patented invention not being made available
to the public at reasonably affordable price [Section
Government acquisition of patent rights for public
purposes against payment of compensation [Section
Revocation of patent in security interests [Section
157 A]
    Doha para 6 CL for Export

Limited to pharmaceutical products
To address public health problems in a
country having insufficient or no
manufacturing capacity in the pharmaceutical
sector for the product concerned.
      Working of CL In India

Provision in the statute since 1911
Total 9 applications till 2005
No case in the pharmaceutical sector
CLs granted by Controller were either not
upheld or injuncted by the courts
2 applications for export of pharma products
under consideration.
 CL and Indian Pharma Industry

Product patent introduced for pharmaceutical
products in 2005; first pharma product patent
granted in March 2006 for Pegasys for treatment of
Hepatis C
3 years after grant only applications can be made
unless it is a notified national or public emergency
Conducive Conditions for Working of CL
  Strong manufacturing base
  Easy procedures
  CL and Indian Pharma Industry…

India has a strong pharmaceutical sector with $ 6.2
billion turnover and 5 million direct employment
Has enabling statutory provisions for grant of CLs
Existence of CL provisions may act as a public
interest safeguard
The existence of the provison for compusopry
licences in the statute book might have had the
effect of inducing patentees to voluntarily grant
licences on reasonable terms -- Justice
Rajagopala Ayyangar
           Impact of Use of CLs in
         Pharma Industry: Two Views
Systematic use of CLs   CLs are part of the IP system and
weakens the IP system   hence their use does not weaken
                        the system
CLs may impede access   CLs facilitate early entry of new
to new medicines        generic drugs
CLs may reduce          FDI is dependent on various
Foreign Direct          factors such as industrial licensing
Investment (FDI)        policy, law and order, general
                        economic scene and overall
                        protection of IPRs.
 Use of CLs in Pharma sector: A
  Policy Maker’s Perspective
Government is to safeguard the rights of all,
particularly of the vulnerable sections of society
Government is also to ensure fair play
Statutory provisions are facilitating instruments
They are to be used judiciously, keeping in view the
greater public good.
 To conclude…
 CL, Medicines and Constitution
“To pay the creator or inventor a price for their
efforts is one thing: but to allow the creator or
inventor to hold to ransom the economic well-
being of the nation and especially the poor is
another … to deny the world – especially the
poor segments of humanity, the benefits of
knowledge and technology, unless they pay the
bargained price does not go well with the
constitutional concern of India”
                       -- Chief Justice P N Bhagwati
           Thank you for your attention


To top