Verdict against Cipla: what this means for patents and patientsSAJJAD HUSSAIN/ AFP

The judgment

  • Roche alleged that Cipla’s cheaper lung cancer drug infringed upon its patent

The consequences

  • This verdict can be a precedent future patent cases
  • It works to the advantage of big pharmaceutical companies which invest in research

More in the story

  • Will drugs become more expensive?
  • How will it impact the IP regime in India?

For the second time in a row, the Delhi High Court has upheld a patent of a Swiss multinational pharmaceutical company. This may act as a precedent for future rulings on drug patents and have strong implications for various regional pharmaceutical companies.

The Delhi High court on Friday (27 November) upheld Roche’s claim on a patent for a lung cancer drug that goes by the chemical name ‘erlotinib hydrochloride,’ and marketed as Tarceva. Roche had alleged that India based pharmaceutical company Cipla infringed upon the patent by the sale of it’s own version of the drug called Erlocib.

A dosage of Roche’s Tarceva costs about Rs 4,800 while Cipla’s Erlocib costs about Rs 1,600. But patients need not worry since Roche’s patent will expire as early as March 2016.

Read- Bitter pill: why has Delhi HC made drugs costlier for diabetics?

But according to legal experts, the judgment will have a bearing on 10 similar cases filed by Roche against other local drug makers in various courts among various others.

Roche has filed case against Hyderabad-based cancer specialty drugmaker Natco Pharma , Dr Reddy’s Laboratories Ltd and Mumbai-based Glenmark Pharmaceuticals Ltd for the same drug.

In 2009, Justice Manmohan Singh of the Delhi High Court had stated that Cipla did not infringe upon the patent since Cipla’s version of the drug ‘was a variant of the basic compound’ and not the same compound as patented by Roche.

Roche then appealed to a division bench that upheld the patent on Friday and set aside the 2009 verdict.

Patents spur innovation

The judgment is a positive sign for multinational pharma companies that spend extensively on research. Patents are usually a way to get returns for investment on research, as IP lawyers and Pharmaceutical companies argue time and again.

But India’s patent law has a caveat in case the newly discovered product or drug is just a new form or similar to an already discovered drug. The caveat is Seciton 3(d) of the patents act..

Section 3(d) of the Patent Act, states that “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy” cannot be a valid reason to patent a drug.

A dosage of Roche’s Tarceva costs about Rs 4,800 while Cipla’s Erlocib costs about Rs 1,600

Cipla had earlier argued that Roche’s patent did not hold ground as ‘erlotinib hydrochloride’ was a derivate of a another compound that has already been used for cancer treatment.

Now, while this was the basis of Cipla’s argument in court, the judge dismissed it stating, “We understand Section 3(d) as a positive provision that in fact recognises incremental innovation while cautioning that the incremental steps may sometimes be so little that the resultant product is no different from the original. The inherent assumption in this is that infringement of the resultant product would therefore be an infringement of the original.”

In short, Cipla has no basis to argue on the basis of this particular section.

“The judgment is a also a positive sign that India’s IP laws take patents seriously.” says DG Shah, Secretary General, Indian Pharmaceutical Alliance, a lobby group of various pharmaceutical companies.

What this means for patients

Patients who suffer from lung or pancreatic cancer, for whom the drug is necessary, need not worry about increase in prices. However, this might be a precedent for future rulings that may not be in their favour.

The court did not take the price of the drug into consideration and lawyers argued that the price is not substantial enough to revoke a patent.

cancer cipla patent embed

So while in this case Cipla avoided an injunction, which means it can continue selling its drug, as Roche’s patent expires in March 2016, the case will impact Roche’s other lawsuits against local drug makers such as Natco and Glenmark.

Earlier this month, the Delhi High Court upheld the patent of American based Merck Co.’s patent for a drug for diabetes. This meant that a cheaper alternative by Glenmark will not longer be available.

If such judgments are the norm, there will definitely be a visible increase in the price of life-saving drugs, with generic versions slowly disappearing.

A positive signal India’s IP Regime:

Leaving drug prices aside, the judiciary’s decision to uphold the country’s IP regime has one positive impact.

In a World Trade Organisation (WTO) draft-ministerial decision released on 23 November, on “non-violation disputes in the area of intellectual property,”.a WTO panel has decided to shield’s India’s IP regime.

The verdict is a positive sign for multinational pharma companies that spend extensively on research

The council agreed to extend a India’s moratorium on “bringing non-violation complaints to the WTO’s dispute settlement system to 2017”.

What this basically means is that India has the right to issue compulsory licenses, a provision the government can use to ensure mass manufacture of medicines, overruling patents in case of public health emergencies, and uphold its other patent acts, without interference from any WTO member,

So, in case of a public emergency, such as a lack of a life-saving drug, India can withdraw a patent of any pharmaceutical company and mass produce cheaper drugs.

According to Abhijit Das, Head, Center for WTO Studies, this is reassurance that the country’s law will not be challenged.