Guest Post: Examining the recently announced Compulsory Licenses on anticancer drugs

In light of the recent decision to issue compulsory licenses for three anti-cancer drugs, Madhulika Vishwanathan brings us her third submission for our SpicyIP Fellowship application. After looking into the possible legal provisions that could have been used in pursuing this decision, she examines how generics may follow up on this decision by noting the differences in approach that they will have to take regarding small molecule drugs and biologics. (Note: Much of the first half includes quoted provisions, so the post is longer than usual)

Examining the Recently Announced Compulsory Licenses on Anticancer Drugs

Recently there was a well written post in Spicy IP regarding Government of India’s proposed decision to issue compulsory licensing for three anticancer drugs viz. Herceptin, Ixabepilone, and Dasatinib. I would like to further explore the decision by attempting to answer two questions: 

1. Which legal provision could have been explored for grant of compulsory license under the current circumstances? (Editor's note for the readers: A different interpretation has been put forth here regarding Section 92 as compared to the one put forth in our earlier post) 

2. What are the possible ramifications of the decision to issue compulsory license?

1. Which legal provision could have been explored for grant of compulsory license under the current circumstances?

To quickly review the situation: Sections 84, 91, 92, and 92A enumerate the various circumstances under which compulsory licenses may be granted. 

Compulsory licensing under Section 84 requires that after the expiration of three years from the date of the grant of a patent, an interested party should make an application to the Controller provided that any one of the following grounds are met i.e. (a) reasonable requirements of the public have not been satisfied (b) drug was not "reasonably affordable" to the public (c) patented invention was not worked in the territory of India.

It seems highly unlikely that an application for compulsory license has already been made by a generic manufacturer, so most probably the government has explored the option of compulsory licensing under Section 92. Under Section 92, the Controller can issue a compulsory licensing on application only after the Central Government issues a special notification.

Section 92(1) reads as “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…” 

While the current circumstances cannot be classified “national emergency” or “extreme urgency”, public non-commercial use is a term with broad scope and compulsory licensing of anti-cancer drugs could be covered within this category. 

Section 92(2) reads as “The provisions of sections 83, 87, 88, 89 and 90 shall apply in relation to the grant of licences under this section as they apply in relation to the grant of licences under section 84.” As per section 92(2), in case of compulsory licensing under Section 92, a lengthy procedure is required to be followed which involves notifying the patentee followed by complete opposition proceedings.

However, Section 92(3) states that in the circumstances of National Emergency or Extreme urgency or public non-commercial use including public health crises, relating to Acquired Immuno Deficiency Syndrome (AIDS), Human Immuno deficiency virus, tuberculosis, malaria or other epidemics, to avoid any delay in the procedure, provisions under section 87 will not apply. Since the statute mentions specific diseases and epidemics, I am not sure whether “Cancer” could be construed as being within the ambit of these diseases mentioned under section 92(3). Hence I believe that if compulsory licensing is granted for these three drugs, usual procedures of opposition for compulsory licenses will be followed and expedited approval as specified in Section 92(3) will not be applicable in this scenario.

Alternatively, the government could also exercise its power vested with it under Section 100 (Power of Central Government to use inventions for purposes of Government). (Relevant provisions provided in coloured text below. Discussion continues after provisions)

Section 100(1) reads as “Notwithstanding anything contained in this Act, at any time after an application for a patent has been filed at the patent office or a patent has been granted, the Central Government and any person authorized in writing by it, may use the invention for the purposes of Government in accordance with the provisions of this Chapter”

Section 100(6) reads as “The rights to make, use, exercise and vend an invention for the purposes of Government under sub-section (1) shall include the right to sell on non-commercial basis, the goods have been made in exercise of that right, and a purchaser of goods so sold, and a person claiming through him, shall have the power to deal with the goods as if the Central Government or the person authorized under sub-section (1) were the patentee of the invention”

Section 99 defines use of invention for purpose of Government and reads as “For the purposes of this Chapter, an invention is said to be used for the purposes of Government if it is made, used, exercised or vended for the purposes of the Central Government, a State Government or a Government undertaking.”

Government use is as provided under Section 100 and can be invoked any time after the application for a patent has been filed, thus making it wider in scope than compulsory licensing under section 92. However, the license granted under Section 100 would only enable sale of the generic version of the drug through government channels distribution (i.e. through government hospitals at a certain reasonable price). In contrast, compulsory license under Section 92 would enable retail sale of the product.

2. What are the possible ramifications of this decision?

Out of the three anti-cancer drugs for which the government has started the process for issuing compulsory licensing, two are small molecule drugs (Ixabepilone, Dasatinib) and one is a biologic (Herceptin/Trastuzumab) ─ specifically a monoclonal antibody. 

The generic version of a small molecule drug can be demonstrated to be chemically and structurally identical to the innovator drug by using sophisticated analytical techniques. 

However, the threshold for regulatory approval for biosimilars is higher than conventional small molecule drugs and requires much more than demonstrating pharmacokinetic bioequivalence. Biologics are structurally more complex as compared to small molecule drugs and are extracted from cell culture. Even if the two cells are of the same type, conditions in the cell vary depending on various factors; such variations will have a profound impact on the structure of the resulting biologic. Thus it is extremely difficult for a biosimilar to have the same degree of reproducibility as is afforded by a conventional small molecule drugs. Also the immunogenicity of recombinant therapeutic proteins is an important safety concern. Furthermore, because biologics are formulated as injectables as opposed to tablets/capsules a small mistake could have severe repercussions. 

A case in point is when a small manufacturing change in production of Eprex (epoetin alfa produced by Johnson and Johnson) caused pure red cell aplasia and resulted in multiple fatalities. Eprex is used in the treatment of patients with anemia resulting from chronic kidney disease; these patients are unable to produce sufficient endogenous erythropoietin. A change in the formulation of Eprex caused a number of patients to develop neutralizing antibodies not only to the biologic but also to the native erythropoietin. Some studies suggest that organic compounds that leached from uncoated rubber stoppers in prefilled syringes contributed to the immunogenicity. 

Will David and Goliath team up?

The biosimilar industry is still in a nascent stage and most of the countries only recently developed guidelines for approval of biosimilars. The recently issued Indian guidelines for biosimilars stipulate rigorous testing regime in order to ensure safety and efficacy. In light of all this the onus of providing affordable healthcare without compromising on patient safety increases. Also with majority of the pharmaceutical companies in strategic alliances with MNC’s, it would be extremely interesting to see who takes up the challenge of manufacturing these drugs. Nature of the invention like complexity of the technology involved plays an important role in the effective utilization of compulsory licensing. Only time will tell, whether generic manufacturers are capable of and willing to produce and distribute generic versions of the Herceptin within an appropriate time frame.

From a small step to a giant leap, India’s first patent compulsory licensing order has indeed paved the way for issuance of compulsory licenses against other such expensive drugs.