List of local manufacturers under PPO in no way related to use of govt authorisation under Patent Act: DoP

New Delhi, June 1, 2022:

With its list of local suppliers of 209 medicines for public procurement agencies invoked unexpected patent litigations, the Department of Pharmaceuticals (DoP) has informed the Delhi High Court that its effort was merely to collate the details of local manufacturers and it should not be treated as directions by the Government to produce these drugs by infringing patent laws.

Drug major Novartis AG has dragged the DoP, along with two pharmaceutical manufacturers - MSN Laboratories and Centurion Remedies Pvt Ltd - alleging that the government’s efforts to list local manufacturers for some of the products in the list may infringe its patent rights.

The DoP in its affidavit on May 23, has said that the defendant companies always knew the intention of the Department’s public notice dated February 28, was to collate the details of local manufacturers of the drugs, as requested by the Central Procurement Agencies, but, un-necessarily brought in the issue of use of Government Authorisation under the Indian Patent Act, which is no way related to the guidelines issued under Public Procurement Order (PPO).

Regarding the patents relevant to the case, it clarified that the public notice nowhere directs or compels anyone to infringe upon the rights of the patent holders.

Section 100 of the Patents Act, 1970 elaborates on the power of Central Government to use inventions for purposes of Government, whether by itself or through any person authorised in writing by it, which may be made free of any royalty or other remuneration to the patentee.

“Further, it is also clarified that the authorisation under Section 100 of the Patents Act, referred by the plaintiff (Novartis) as well as the defendant (MSN Laboratories and Ceturion Remedies in separate cases) in the order has no relationship with the public notice issued by the Department since the said provision under the Patents Act, 1970 has altogether a separate mandate and process under the administrative powers of the Department of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry and the Department has no authority over the same,” it said.

“The defendant has misinterpreted the public notice as if DoP is going to procure the drugs by issuing any authorisation which is altogether a different power vested with the DPIIT and issued sparingly under any public health emergency,” it said.

Taking note of the submission, the Court removed the Department from the array of parties in these litigations.

The DoP, in its affidavit clarifying the position, informed the High Court that for various reasons including for enhancing supply of local manufactured products and for self-sufficiency proposes in the case of medicines, drug and medical devices, certain guidelines were issued by the Government classifying local suppliers based on local value addition or local content as Class I local supplier having local content of more than 80 per cent, Class II local supplier having local content of 50-80 per cent, and non-local supplier having local content less than 50 per cent.

Following this, various procuring agencies including the Ministry of Railways had requested for relaxation of the same due to non-availability of local producers. At that stage, a need was felt for ascertaining local manufacturers in respect of various drugs. It was in this background that a list of 209 drugs were published on the website of DoP, through a public notice dated February 28, 2022, seeking details of the local manufacturers available for these drugs.

Centurion Remedies and MSN Laboratories responded to this notice giving details of its manufacturing capabilities in respect of 44 drugs.

Novartis approached the DoP and later filed petition in the Delhi High Court seeking permanent injunction restraining Centurion Remedies from infringing its patent for Sacubitril+Valsartan composition which has patent expiring in January 16, 2023 and eltrombopag olamine or Revolade, which has patent expiring on May 21, 2023. Centurion has undertaken not to use or sell or import or manufacture or cause to use or sell or import manufacture the drugs, till the expiry of the patent.

Justice Prathiba M Singh, hearing the petitions, in an order on May 26, directed Centurion Remedies not to undertake or cause commercial manufacture, sale, use, export or import of any pharma preparations consisting of these two drugs, till the expiration of the suit patent.

Novartis’ petition against MSN Laboratories is on the patent rights on Pyrrolopyramidine compounds (Ribociclib), which has patent till May 24, 2027 and on Inhibitors of Tyrosine Kinases which has patent valid till July 4, 2023.

MSN Laboratories has raised arguments against Novartis’ suit on pyrrolopyramidine compounds, on which the Judge has asked to submit a written statement from the Indian firm. Noting that MSN has not received a manufacturing license for the product yet, the Court directed that even if a manufacturing license is issued in respect of Ribociclib, before taking any further steps for the commercial manufacture of any products in this respect, the company shall move an application before the court.

Regarding the Inhibitors of Tyrosine Kinases, MSN Lab has said that it has received commercial manufacturing license in August, 2019, but it has no intention to manufacture and sell the drug Nilotinib at this stage. Justice Singh directed that if the company takes a decision to undertake commercial production or sale of pharma preparations of Nilotinib, it shall give advance intimation to Novartis of at least four weeks. Pharmabiz