Compulsory licensing: India gave ‘private reassurance’, says US business council

In a review submitted to USTR, four US industry bodies have said that India has developed a “positive” approach over the compulsory licensing issue.

Written by Liz Mathew | New Delhi | Published:March 8, 2016 2:36 am

The US-India Business Council (USIBC) has, in a report to the United States Trade Representative (USTR), said that the government has “privately reassured” them it would not use compulsory licences (CLs) for commercial purposes — indicating that India’s patent office will take a more restrained approach in handing out licences to domestic players to produce cheaper versions of patented drugs.

In their submissions to United States Trade Representative (USTR) for the 2016 Special 301 Review, at least four industry bodies, the US Chamber of Commerce, Pharmaceutical Research and Manufacturers of America (PhRMA), USIBC and Alliance for Fair Trade with India (AFTI) — have said that the Indian government has developed a “positive” approach over the compulsory licensing issue. At least two submissions say that the Controller General of Patents, Designs and Trademarks has rejected at least two applications for CLs applied last year. Disallowing licenses means the Indian companies will not be able to manufacture and sell generic versions of the drugs whose patent is with the American firms.

The USIBC, a business advocacy group representing more than 350 top global companies investing in India, in its submission given on February 5 says that they were “encouraged by the way things are trending” in the developments related to the Intellectual Property Rights (IPR) policy in the last 12 months in India. “USIBC also took notice that the government of India has denied several CL applications, providing investor certainty and predictability that their patents will be upheld in India,” the submission says.

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When contacted, USIBC President Mukesh Aghi told The Indian Express, “It is true the government has reassured Industry verbally in meetings that they will not use CLs. However, industry is concerned that a verbal assurance could be easily undermined if personnel or government officials change swiftly. Investor sentiment would be more confident if the government provided a written declaration, saying they have officially disbanded the interagency compulsory license committee and that CL will not be used except under situations of public health emergencies.”

“The Government of India has privately reassured that it would not use CLs for commercial purposes. USIBC would be further encouraged if the government of India made a public commitment to forego using compulsory licensing for commercial purposes and in public emergencies only, which would greatly enhance legal certainty for innovative industries,” it adds.

Similarly, AFTI’s submission says: “AFTI and its members have, however, been heartened by two recent decisions by the Controller General to reject applications for CLs applied for in the last year, one for AstraZeneca’s patented anti-diabetic drug Onglyza, the other for Bristol-Myers Squibb’s cancer drug Sprycel.

With CL, Natco, a Hyderabad-based Indian company had proposed manufacturing and selling of cancer drug sorafenib tosylate at Rs 8,800 per patient per month, almost 100 per cent less than Bayer’s Nexavar. In December 2014, the Supreme Court rejected Bayer’s appeal of a Juy 2014 Bombay High Court decision refusing to revoke a CL issued to Natco. On Monday, Malayala Manorama, quoting the US industry groups’, reported that the Central government is trying through back doors to revoke the compulsory licensing. The government has been maintaining that it would not agree to revoking compulsory licensing to ensure that the prices of life saving medicines are regulated. Commerce minister Nirmala Sitharaman was not available for comments and commerce secretary Rita Teaotia did not return the calls. An email has been sent to USIBC spokesperson for comments.

In its views, PhRMA says: “Indian government appears to have taken a more measured and cautious approach in responding to recent CL cases, including the denial of two CLs this year. We are encouraged by this trend.” However, it adds, “the grounds for issuing a CL under the provisions are broad, vague and appear to include criteria that are not related to legitimate health emergencies. The Ministry of Health continues to make recommendations to impose CLs on certain anti-cancer medicines under the special provisions of Section 92 of India’s Patents Act, which would make it even more difficult for patent owners to defend their patents.”

“While the government of India has privately reassured that it would not use CLs for commercial purposes, a public commitment to forego using compulsory licensing for commercial purposes would enhance legal certainty for innovative industries,” says US Chamber of Commerce’s submission.