[Ip-health] LiveMint: India competition authorities review deals involving Roche, Merck, Novartis, CIPLA, Glenmark, and other companies

Jamie Love james.love at keionline.org
Mon Aug 4 04:07:33 PDT 2014


Sun, Aug 03 2014. 11 40 PM IST

CCI to scan drug patent settlements

Competition regulator may examine settlement details as these agreements
may restrict access of cheaper drugs to the sick

The mediation between Cipla and Roche was prompted by a decision of the
Delhi high court, which has been hearing the patent infringement case filed
by Roche after Cipla launched a cheaper copy of the former’s patented
cancer drug Tarceva (erlotinib) in the domestic market in 2008. Photo: Mint

Mumbai: The country’s competition regulator may examine details of patent
settlements being negotiated between foreign branded medicine companies and
local generic drug makers as these agreements may restrict the access of
cheaper drugs to the sick.

The cases which the Competition Commission of India (CCI) is likely to
review include the patent deal between Swiss drug maker F Hoffmann-La Roche
Ltd and Cipla Ltd on lung cancer drug erlotinib, and the one between
US-drug multinational Merck Sharp and Dohme Corp. (MSD) and India’s
Glenmark Pharmaceuticals Ltd on a new diabetes drug called sitagliptin.

The antitrust agency will also investigate the market impact of ex parte
injunctions secured by Swiss drug firm Novartis AG and MSD against a dozen
local drug makers, blocking them from launching copies of diabetes drugs
vildagliptin and sitagliptin, according to two people familiar with the
development who declined to be named.

CCI’s decision to review these settlements follows increased regulatory
scrutiny of patent settlements between brand owners and generic companies
in Western countries. Antitrust laws in those markets are stringent and
heavy penalties are being imposed on violators.

To prevent generic drug makers from getting regulatory approval for copies,
branded medicine companies often pay generic firms to keep their medicines
off the market. Drug companies can generate billions of dollars as long as
a drug is under patent protection. Sales of those products fall sharply as
soon as generic drug makers introduce copies of the drug. While the
settlements may benefit the drug companies involved, patients suffer as
access to cheaper medicine is restricted.

In the latest instance of punitive action against drug makers that had
entered such agreements, the antitrust arm of the European Commission in
July fined French drug maker Les Laboratories Servier and five generic
companies including the European subsidiaries of Lupin Ltd and Unichem
Laboratories Ltd a total of €425 million, alleging that a patent settlement
among them delayed the launch of a copy of hypertension drug perindopril.

There are more companies resorting to patent mediation in India now,
although the trend is new to the country, Mint reported on 29 July.

Patent settlements are not illegal. Courts can ask the parties involved to
reach a mutual settlement instead of getting stifled in a prolonged
judicial process.

The mediation between Cipla and Roche was actually prompted by a decision
of the Delhi high court, which has been hearing the patent infringement
case filed by Roche after Cipla launched a cheaper copy of the former’s
patented cancer drug Tarceva (erlotinib) in the domestic market in 2008.
The MSD-Glenmark talks to settle the patent infringement matter on diabetes
drugs Januvia and Janumet (sitagliptin brands of MSD) were initiated by the
US firm. Glenmark launched generic versions of these brands in India in

These companies have been fighting their respective patent infringement
cases in the Indian courts. An out-of-court settlement could give both
sides some respite from the prolonged judicial process involved in patent
litigation. It may also impair access to affordable medicines, say legal
and industry experts.

“They need to be examined on a case-to-case basis and the terms of the
settlement need to be made public. This is because the factors such as an
unusually high payout to the generic drug maker in question to stay away
from the market may tip the scales in favour of a funding of
anti-competitive behaviour,” said Shamnad Basheer, a patent law expert and
former intellectual property chair at the National University of Juridical
Sciences, Kolkata.

Such settlements should also be subject to competition law scrutiny, he

“The settlements between patent holders and generic companies generally
involves mutually beneficial terms leaving the market and the consumer at a
disadvantage,” said a partner with a patent law firm in Mumbai.

In this context, CCI’s intervention is important and should ensure that
patient access to critical drugs is not compromised, said this consultant,
who didn’t want to be identified.

The other critical issue involved in the patent settlements between the
companies is the continued lack of clarity on the validity of patents,
which were under dispute.

“Given that our patent jurisprudence is only developing now, it is critical
that courts adjudicate these cases and outline clear legal propositions on
patent validity and infringement,” said Basheer.

James Love.  Knowledge Ecology International
http://www.keionline.org, KEI DC tel: +1.202.332.2670, US Mobile:
+1.202.361.3040, Geneva Mobile: +41.76.413.6584,   twitter.com/jamie_love

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