Another important aspect of the Indian Patent Act, which up until recently did not get as much attention, relates to a compulsory licensing provision. The Act allows for grant of a compulsory license three years after the grant of a patent where (1) reasonable requirements of the public have not been met, (2) the invention is not publicly available at a reasonably affordable price, and (3) the invention was not worked on in India.
A few months ago, the Indian Patent Office granted a compulsory license to an Indian pharmaceutical company for Bayer’s anticancer drug Nexavar on the grounds that the drug was not meeting the reasonable requirements of the public, was not reasonably affordable, and was not locally manufactured.
The fate of Nexavar in India raises several concerns for innovative pharmaceutical companies regarding the availability, pricing, and manufacturing of patented drugs in India. It is particularly crucial to have a strategy on “working” the invention in India, for instance, by manufacturing in India, collaborating with an Indian company, or taking advantage of India’s investment treaties, as applicable.
Any pharmaceutical company considering operations in India should consider that India does not offer data exclusivity for pharmaceuticals. In other words, a generic manufacturer can rely on the technical data generated by an innovative company because, in India, that data does not enjoy a period of exclusivity. Typically, a generic manufacturer relies on the innovator’s data with a showing of bio-equivalency between the generic and the innovative drug.
In the presence of data exclusivity, an innovator can prevent others from relying on its clinical data. As a result, a period of data exclusivity can provide patent-like protection to prevent generic manufacturers from relying on the clinical data generated by the innovator. But India does not offer such data exclusivity protection. Thus, a pharmaceutical company setting up operations in India would need to consider the possibility of not having exclusivity for data that it generates in India.