Thursday, January 17, 2008

What triggered Natco to seek compulsory license?

In an unprecedented move, Hyderabad-based generic company Natco has made an application for compulsory license with respect to Indian Patent No. 196774 (the ‘774 patent) issued to Pfizer for anticancer drug Erlotinib Hydrochloride, globally marketed as Tarceva by Genentech (in US) and Roche (outside US). Although this is probably the first instance of compulsory license in India, but what is important to note that Natco is seeking compulsory license to export 30,000 tablets of Tarceva to Nepal, not for domestic market. It is also reported that Natco has offered five percent royalty to Roche. As far as compulsory license provisions are concerned, Natco seems to have triggered section 92A of the Patents Act, 1970 seeking compulsory license to manufacture and export patented Tarceva to Nepal, which if granted by the Indian Patent Office will likely make India officially second country after Canada to grant compulsory license to export generic drug under “Paragraph 6 System” as decided in August 2003 by the WTO General Council to implement paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health. In October 2007, Canada notified TRIPS Council that it has issued a compulsory license to Apotex to export generic version of patented triple combination AIDS therapy drug, TriAvir to Rwanda following notification to import made by Rwanda in July 2007. Under section 92A, Natco can possibly trigger compulsory license if Nepal has -

  1. issued compulsory license for Tarceva, or
  2. officially notified/allowed importation of patented Tarceva from India.

The first condition seems to be unlikely reason what may have triggered Natco to seek compulsory license as Nepal is having a status of least-developed country under the WTO, and still have eight more years to bring provision for granting patents for drug products, which in fact exclude any possibility of Tarceva having patent protection in Nepal at least till 2016, and also excluding the possibility of compulsory license issued by Nepal for Tarceva. The second condition can only be triggered following a notification to import by Nepal to TRIPS council, similar to Rwanda.

According to Decision of the General Council over implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, the obligations of an exporting Member under Article 31(f) of the TRIPS Agreement shall be waived with respect to the grant of a compulsory license to the extent necessary for the purposes of production of a pharmaceutical product(s) and its export to an eligible importing Member(s) in accordance with the terms set below –

(a) the eligible importing Member(s) has made a notification to the Council for TRIPS, that:

(i) specifics the names and expected quantities of the product(s) needed;

(ii) confirms that the eligible importing Member in question other than a least developed country Member, has established that it has insufficient or no manufacturing capacities in the pharmaceutical sector for the product(s) in question in one of the ways set out in the Annex to this Decision; and

(iii) confirms that, where a pharmaceutical product is patented in its territory, it has granted or intends to grant a compulsory license in accordance with Article 31 of the TRIPS Agreement and the provisions of this Decision;

(b) the compulsory license issued by the exporting Member under this Decision shall contain the following conditions:

(i) only the amount necessary to meet the needs of the eligible importing Member(s) may be manufactured under the licence and the entirety of this production shall be exported to the Member(s) which has notified its needs to the Council for TRIPS;

(ii) products produced under the licence shall be clearly identified as being produced under the system set out in this Decision through specific labelling or marking. Suppliers should distinguish such products through special packaging and/or special colouring/shaping of the products themselves, provided that such distinction is feasible and does not have a significant impact on price; and

(iii) before shipment begins, the licensee shall post on a website the following information:

- the quantities being supplied to each destination as referred to in indent (i) above; and

- the distinguishing features of the product(s) referred to in indent (ii) above

(c) the exporting Member shall notify the Council for TRIPS of the grant of the licence, including the conditions attached to it. The information provided shall include the name and address of the licensee, the product(s) for which the licence has been granted, the quantity(ies) for which it has been granted, the country(ies) to which the product(s) is (are) to be supplied and the duration of the licence. The notification shall also indicate the address of the website referred to in subparagraph (b)(iii) above.

It would be interesting to know how Indian Patent Office is going to take this forward, and under what provision the compulsory license will be granted to Natco (if granted). It would also be interesting to know whether Nepal has made any notification to TRIPS Council for importation of Tarceva from India (or any other country). Till date, the official website of WTO does not show any notification by Nepal for importation of patented Tarceva from India.

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