The High Court, ruling with Cipla, said that unpatented generic drugs could not be equated with spurious drugs. “A declaration by the drug agency entrusted with the task of deciding applications seeking marketing approval that someone not holding a patent is attempting to get clearance for a ’spurious drug’ would be pre-emptive, and would negate the provisions requiring that enforcers should follow certain mandatory procedures, and prosecute potential offenders. Such a declaration would be startlingly preclusive, even drastic, whether given by the Drug Controller, or this court.”
High Court Judge Ravindra Bhat also rejected Bayer’s attempt at “patent linkage,” relying on the absence of patent linkage, which is the denial of marketing approval for patent reasons, in Indian law and said the company’s complaint was “an attempt to ‘tweak’ public policies through court mandated regimes.”
Bhat ordered Bayer to pay approximately Rs675,000 (US$14,000) to Cipla and the Union of India as a way of deterring future wealthy litigants from “vexations or luxury litigation.”
In a press release, the international medical and humanitarian aid organisation Médicins Sans Frontières called the Court’s decision “very important because it has stopped Bayer’s attempt to introduce a new barrier to generic competition, the only proven means of reducing the prices of medicines to make them affordable to those in need.”
The organization said that linking a drug’s registration to its patent status would have had an especially harmful effect in relation to compulsory licenses. “Even if India were to issue a compulsory license to overcome a patent barrier for a life-saving medicine, this provision could block the marketing approval of the drug rendering the compulsory license useless,” the press release said.
At the same time, a report in India’s Economic Times spoke of concern that ambiguity in the amended Drugs and Cosmetics Act over the terms ‘adulterated’ and ‘spurious’ could negatively impact Indian generic drug manufacturers. The amendments came into force on August 10.
According to media reports, the law now provides for harsher punishment for companies charged with manufacturing ‘adulterated’ or ‘spurious’ drugs.
Shamnad Basheer, professor of intellectual property law at the National University of Juridical Sciences (NUJS) in Kolkata, told the Economic Times that the law remains ambiguous. “Although the increase in penalties for dealing in spurious drugs may be welcome, the fact that the definition of ‘spurious’ remains substantially the same is a grave cause for concern. This definition could be interpreted to even catch within its fold legitimately-authorised generics of good quality and this is problematic.”
An unidentified CEO of a generic drugs company told the newspaper that the ambiguity could pose problems for his industry. “With the lack of clarity on the definition of adulterated and spurious, large companies are more likely to use this as a way to block generic companies from challenging their patents and manufacturing generics,” he said. “This could harm the generic industry as a whole and if it is not sorted out soon, we will see more lawsuits against Indian companies on such grounds.”
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