[Ip-health] Spicy IP: The Dasatinib Dance Continues: Compulsorily Licensing and Public Non Commercial Use

Elizabeth Rajasingh elizabeth.rajasingh at keionline.org
Tue Nov 11 06:38:29 PST 2014


The Dasatinib Dance Continues: Compulsorily Licensing and Public Non
Commercial Use
by Shamnad Basheer November 11, 2014

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
<http://www.nice.org.uk/guidance/ta241> 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

“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.

Elizabeth Rajasingh
Perls Fellow, Knowledge Ecology International
1621 Connecticut Ave. NW, Suite 500
Washington, DC 20009
*elizabeth.rajasingh at keionline.org <elizabeth.rajasingh at keionline.org>*
 | 1-202-332-2670

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