CSU Business Law Entrepreneur Saxagliptin Case Study

Saxagliptin1. What is the difference between a “product patent” and a “process patent”?
How will developing countries be affected if they adopt a product patent
regime?
2. What is a compulsory license and what is the economic rationale behind
compulsory licensing? On what grounds has Lee Pharma applied for a
compulsory license for Saxagliptin? Is Lee Pharma justified in applying for a
compulsory license for Saxagliptin?
3. Should the Indian Patent Office grant a compulsory license to Lee Pharma?
Use an economic rationale to justify your stand.
4. What strategic changes should multinational pharmaceutical companies
make to their business processes in order to avoid or deal with the issue of
compulsory licenses for their patented drugs in developing countries?
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W16536
COMPULSORY LICENCE FOR SAXAGLIPTIN: PROTECTION VERSUS
COMPETITION1
Veena Keshav Pailwar wrote this case solely to provide material for class discussion. The author does not intend to illustrate either
effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying
information to protect confidentiality.
This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.
Copyright © 2016, Richard Ivey School of Business Foundation
Version: 2016-08-31
On June 25, 2015, Lee Pharma Limited filed an application with the Indian Patent Office for a grant of a
compulsory licence for the manufacturing of Saxagliptin, an already patented drug covered under patent
No. 206543. Lee Pharma based its request on the grounds that the patented invention had not been made
available to the public at a reasonably affordable price (see Exhibit 1).2 Lee Pharma’s was the third such
application for a compulsory licence received by the Indian Patent Office since the country had amended
its Patents Act in 20053 to meet the compliance requirement of the multilateral Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS)4 established by the World Trade Organization
(WTO). The granting of a compulsory licence was expected to make the drug more affordable for the
general public, but it would have the corresponding effect of undermining the interests of the patentee, a
multinational company that originated from the developed world. If the developed world imposed
sanctions against India in retaliation for such a protectionist measure—which the compulsory licence
certainly was—the flow of trade and foreign capital into the country would be adversely affected.
What should the patent office do? Should it strictly enforce the patent regime, which would encourage
higher foreign capital inflows in research and development (R&D) in the Indian pharmaceutical industry
and promote inventions and innovations in the country? Or should it grant the compulsory licence,
thereby attaching higher weight to the welfare of India’s general public?
SAXAGLIPTIN: ORIGIN AND DEVELOPMENT
Saxagliptin was a dipeptidyl peptidase-4 inhibitor used for lowering blood sugar levels in type 2
diabetes,5 a condition of high blood-sugar levels in the human body that occurred when the body did not
produce or use enough insulin in the pancreas. Other comparable drugs (e.g., Sitagliptin, Vildagliptin, and
Linagliptin) were available in the Indian market and could be used for controlling blood sugar levels by
inducing higher production of insulin in patients suffering from diabetes. Generic alternatives for
Sitagliptin and Vildagliptin were also available in the Indian market.
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Bristol-Myers Squibb (BMS), a multinational company founded in the United States in 1858,6 developed
the molecule that was used in Saxagliptin.7 BMS received the patent for Saxagliptin in India in 2007.8
AstraZeneca (AZ), another global company, founded in Sweden, joined with BMS in 20079 to further
develop the drug and commercialize its uses. During the co-development period, AZ bore the entire
development cost. After the development period, both companies bore the additional cost incurred in the
process of commercializing the product. Subsequently, in 2014, as part of a broader diabetes market
strategy, AZ acquired BMS’s entire diabetes business, which gave AZ complete ownership of all the
intellectual property rights of BMS’s diabetes drugs, including Saxagliptin.10
Saxagliptin was marketed in stand-alone form under the brand name Onglyza and in combination with
another active ingredient for enhanced diabetes management. Saxagliptin, in its stand-alone form, was
available in the market at around ₹41 to ₹45 (US$0.83 to $0.91)11 per tablet.12 Other comparable leptin
drugs were also available in the market in the same price range, and generic alternatives for these leptin
drugs were available in the market at a much lower rate. For example, Glenmark Pharmaceuticals sold
Zita, a generic version of Sitagliptin, for around ₹28 ($0.57) per 100-milligram tablet.13
LEE PHARMA AND ITS REQUEST FOR A COMPULSORY LICENCE
Lee Pharma Limited was established in 1998 in Hyderabad, India.14 It was a manufacturer, exporter, and
importer of drugs and pharmaceutical formulations, such as anti-hypertensives, anti-fungals, antidepressants, anti-obesity treatments, bulk drug intermediates, active pharmaceutical ingredients, pellets,
and granules. Apart from India, Lee Pharma marketed pharmaceuticals to other countries, such as the
United States, Canada, Mexico, Brazil, Colombia, Uruguay, Argentina, Poland, Spain, Switzerland,
Germany, Ukraine, Sweden, Croatia, Turkey, Israel, Dubai, Pakistan, China, Thailand, Hong Kong, Taiwan,
and Korea.15 Despite its global marketing reach, the company was relatively lesser known in India.
In June 2015, Lee Pharma filed an application for a compulsory licence with the Controller of Patents for
manufacturing Saxagliptin.16 In its application, Lee Pharma presented several charges against AZ’s
business functioning and practices in India, including the following: (1) AZ/BMS was not able to
manufacture the drug in India, even eight years after receiving a grant of the patent. The patentee
imported the drug to India from Ireland and the United States. (2) Even the imported quantity could
satisfy only 0.23 per cent of the total market demand in India, which consisted of around 60 million type
2 diabetics. The actual quantity that could be sold in India was much lower because the drug was exported
in large quantities from India to the United Kingdom, Slovenia, Canada, Mauritius, and the United States.
(3) The drug was imported at a cost of less than a rupee per tablet but sold at around ₹41 to ₹45 ($0.83 to
$0.91) per tablet on the domestic market, where 30 per cent of the population lived below the poverty line
with earnings of less than ₹32 ($0.65) per day in rural areas and less than ₹47 ($0.95) per day in urban
areas. Lee Pharma, on the other hand, had the capacity to manufacture a million tablets a day and was
capable of making Saxagliptin available to the general public at around ₹30 ($0.61) per tablet.17
WORLD TRADE ORGANIZATION: AGREEMENT ON TRADE-RELATED INTELLECTUAL PROPERTY
RIGHTS AND COMPULSORY LICENSING
As a multilateral organization with 162 member countries,18 the WTO was established in January 1995 to
ensure the free flow of goods and services among nations. The organization created a smooth, predictable,
and conducive trade environment by eliminating or moderating tariff and non-tariff barriers.19 The WTO
was a very powerful body due to the fact that the rules set by this platform could be enforced through
sanctions (i.e., imposing a penalty on nations that disobeyed the agreed-upon norms or rules).20
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Knowledge, innovations, and other intellectual creations and contributions were shaping the prospects of
growth and the quality of human life around the world and thus had become important items of trade.
Lack of protection of intellectual property was considered an important non-tariff barrier because it
impeded the free flow of goods and services and investment across the borders of nations.
The WTO recognized the importance of protecting intellectual property in rewarding and promoting the
disclosure, trade, and diffusion of new knowledge and creativity and in overall global development. The
organization therefore devised and designed rules and norms that would protect the various forms of
intellectual property. These rules were referred to as the Trade Related Intellectual Property Rights
(TRIPS),21 and they put in place certain minimum standards for protecting many forms of intellectual
property, including copyrights, trademarks, geographical indications, industrial designs, patents, layout
designs of integrated circuits, and undisclosed information.22 All WTO members were expected to adhere
to these minimum standards. The rules also outlined the domestic procedures and remedies for the
enforcement of intellectual property rights in the territories of the member countries. Disputes among the
member countries over the enforcement of the TRIPS agreement were reviewed by the dispute-settlement
body of the WTO.23
The member countries, however, differed in their socio-economic status, political and administrative
setup, and technological base, which made it difficult for the WTO to ensure that the TRIPS agreement
was uniformly implemented across all countries. To account for these differences and to facilitate the
process of implementation, the WTO accorded special and differential treatment to developing and leastdeveloped countries. It expected compliance from the developed countries by January 1, 1996, whereas
developing and transition economies were allocated an additional four years to achieve compliance.
Furthermore, a special transition period of 10 years was granted to those developing countries that had no
product patent provision in a given area of technology at the time when the TRIPS agreement came into
force (i.e., January 1, 1995). The least-developed countries (LDCs) were given until 2006 to enact TRIPS.
The time frame for compliance with TRIPS was further extended until 2016 for LDCs in the case of
pharmaceutical products.24 The TRIPS agreement also offered flexibility to all member countries in
interpreting its various articles. These extended agreements allowed the governments of developing
countries to grant compulsory licences or allow parallel importing for pharmaceutical products in order to
tackle national emergencies and public health crises.25
Pharmaceutical products, specifically, were protected by patents. The TRIPS agreement required the
member countries to make patents available for any process or product inventions, irrespective of the
place of invention and place of manufacturing. However, this basic rule of patentability was subject to
three exceptions: (1) inventions that went against public morality, which included inventions dangerous to
human, animal, or plant life or detrimental to the environment; (2) medical methods used for the treatment
of humans or animals; and (3) plants and animals (other than microorganisms and biological processes)
used for reproduction.26
INDIAN PHARMACEUTICAL INDUSTRY: PERFORMANCE, PRICING POLICY, AND PATENT
REGIME
Performance
In the fiscal year ending March 2015, the Indian pharmaceutical industry recorded revenues of over $30
billion.27 Accounting for around 10 per cent of global production volume and 1.5 per cent of global
production value, the Indian Pharma Market (IPM) was among the world’s top three pharmaceutical
markets in terms of volume and 14th largest in terms of value.28 It was projected to grow to $55 billion by
2020 due to India’s rising population; improved affordability, accessibility, and acceptability of modern
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medicines; and new therapies.29 Generic drugs dominated the IPM, possessing a 70 per cent market share
in terms of revenue. Over-the-counter medicines contributed 21 per cent to the total revenue, and the
remaining 9 per cent came from patented drugs.30 India was also among the top six global pharmaceutical
producers in the world.31 Due to the low cost of production (see Exhibit 2), India was also a leading
exporter of pharmaceuticals (see Exhibit 3) and the largest exporter of generic drugs globally,32 exporting
medicines to more than 200 countries.33
Indian medicines had a dominant presence in the U.S. pharmaceutical market. Generic drugs accounted
for more than 80 per cent of prescriptions written in the United States, and of these, over 40 per cent of
prescriptions were manufactured in more than 200 U.S. Food and Drug Administration (USFDA)approved drug-manufacturing facilities located in India.34 However, in the past few years, the USFDA
and the United Kingdom’s Medicines and Healthcare Products Regulatory Agency had raised some
doubts about the quality of medicines manufactured in India.35
The IPM was a highly fragmented market, with around 24,000 registered companies, of which 330
operated in the organized sector. 36 The top 10 companies accounted for more than 40 per cent of the
market share in India (see Exhibit 4).37
Pricing Policy
The National Pharmaceutical Pricing Authority (NPPA) in India regulated the prices of all essential
medicines, with the objective of making the essential medicine available at an affordable cost and with
assured quality. The essential medicines were those that took care of the health needs of the general
public, the names of which appeared on the National List of Essential Medicines (NLEM). There were
348 medicines on the NLEM in 2011.38
The NLEM covered just 17 per cent of the total pharmaceutical market in India and did not contain
several diabetes drugs (including Sitagliptin, Vildagliptin, and Saxagliptin), as well as certain drugs used
in the treatment of tuberculosis, human immunodeficiency virus (HIV), and cancer.39 The ceiling prices of
the medicines listed on the NLEM were fixed as a simple average price of all the branded or generic
versions of such medicines that had a market share of more than or equal to 1 per cent of the total
domestic market revenues for that medicine.40 Additionally, the manufacturers of medicines that were not
under price control were allowed to increase the maximum retail price of those medicines only up to 10
per cent annually.41
Patent Regime: Process Patent to Product Patent
The Indian Patents Act of 1970 governed the patent system in the country.42 Prior to a 2005 amendment,
the act granted “process patents” that allowed manufacturers to patent their manufacturing method for a
given product.43 The other manufacturers could not produce the product using the patented process,
although they could produce it using a different process of their own design. In the context of food and
medicine, a process patent implied that the patent could be granted only for the process of manufacturing
the substance rather than for the substance itself. This process patenting system, which was unlike the
product patenting system adopted by Western countries, allowed manufacturers to patent the same
product by inventing another innovative process.
The pharmaceutical industry in India thrived under the process patent regime, as many drug
manufacturers in India copied the drugs patented in other countries by inventing new processes of
producing the same product. The competition among drug manufacturers drove down the medicines’
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prices, thus benefiting the consumers. The low prices of the drugs not only benefitted Indian consumers
but also helped Indian drug manufacturers to carve out a place for themselves in the international market,
especially in poor countries.
Many international aid organizations also used Indian generic medicines to support poor countries
affected by health exigencies,44 but the process patent regime discouraged the domestic manufacturers
from investing enough in R&D and discovering altogether new products. The process patent regime also
resulted in the “ever-greening” of pharmaceutical patents, whereby patent owners tried to extend the life
of their patented products by inventing a slightly different process and acquiring another patent for what
was basically the same product.45 The system also went against multinational companies that had spent
several million dollars to develop new products, and it deterred them from investing in Indian companies,
especially in R&D.
Although the Indian pharmaceutical industry was thriving under the process patent regime, in order to
comply with the WTO’s TRIPS agreement, India was forced to amend its Patents Act. To enable the
country to move from process patents to product patents, in 2005, the country amended its Patents Act of
1970.46 The amendments to the act recognized patented original drugs as products, irrespective of the
process used for manufacturing the same, and prevented domestic pharmaceutical companies from copying
new drugs developed in other countries by designing new processes for manufacturing these products.
The 2005 amendments to the Indian Patents Act received mixed responses from the industry and media.
On one hand, Indian technology and innovative companies welcomed the move to a new regime,
expecting that the new, stronger level of patent protection would encourage many multinational
companies to tap into India’s relatively inexpensive workforce for product design, medicine development,
and clinical testing and also to invest large amounts in R&D in the domestic market, which would help
India become more competitive in the global market.47 On the other hand, the stronger patent protection
also sparked the debate that the new patent regime would create tough competition among domestic
pharmaceutical companies. Since inventing a new product was more expensive than inventing a new
process for producing an existing patented product, the general public feared that the new patent regime
would drive up the cost of medicines and make them unaffordable to the masses. Further, critics feared
that the new patent regime would dry up the supply of generic drugs in the international market, thereby
affecting the interests of poor countries. The proponents of the product patent regime set aside these fears
by indicating that the generic drugs that were already patented under India’s process patent regime could
be sold on the payment of licence fees to the original patent holder.48 To mitigate the public’s
apprehensions and fears, the proponents also referred to the provision on compulsory licensing in the
WTO TRIPS agreement.49
COMPULSORY LICENSING IN INDIA
The WTO included a provision for compulsory licensing in its TRIPS agreement to safeguard the interest of
the general public in developing and least-developed countries.50 This provision enabled the governments
of these countries to grant a licence to domestic manufacturers to produce a patented drug without seeking
the patent holder’s consent. Instead, domestic manufacturers in these countries were required to make
appropriate compensation to the patent holder, as decided by the government or through negotiations with
the patent holder.
Under the following contentious situations, a generic drug manufacturer in India could apply for a
compulsory licence any time after the expiration of three years from the date of grant of the patent (a
condition that was not required under the TRIPS agreement) and upon payment of a reasonable royalty:
(1) the patent-holding company was not able to make the patented invention available to the public; (2)
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the patented invention was not made available at a reasonable price; (3) there was a lack of working of the
patented product within the territory of India.51
The Indian Patents Act envisioned that the companies seeking a grant of a compulsory licence would
consider doing so only as a last resort. Prior to seeking such a licence, the companies were expected to
attempt to obtain a voluntary licence from the patentee. Once these attempts failed over a six-month
period from the date of the initial request, the company could request patent-office intervention for a grant
of a compulsory licence.52
Natco Pharma Limited (Natco), a generic drug manufacturer based in Hyderabad, received the first
compulsory licence in India in 2012 to produce and market Nexavar, a patented drug of a major
multinational pharmaceutical company, Bayer Corporation (Bayer).53 Nexavar was used to treat liver
cancer, thyroid cancer, and kidney cancer, and thus was considered a life-saving drug. Bayer had obtained
a patent in India for Nexavar in 2008.54 At that time, Bayer was selling a pack of 120 tablets at a rate of
₹280,000 ($5,687.59), which was a very high price by Indian standards. Bayer could make the drug
available to just above 2 per cent of the total number of kidney- and liver-cancer patients by importing the
drug rather than by manufacturing it locally. The compulsory licence was granted to Natco, as Bayer had
not made the drug available on a large scale or at an affordable price within the stipulated period.
However, the compulsory licence was granted to Natco on the condition that the company would pay a 6
per cent royalty to Bayer from the sales of the generic drug Nexavar.55 Subsequently, on Bayer’s appeal,
the royalty rate was modified to 7 per cent.56 Further, Natco was directed to sell the drug at the rate of
₹8,800 ($170) for a pack of 120 tablets.57
The decision to grant a compulsory licence to Natco spurred some controversy and speculation in India as
well as abroad. Legal specialists and analysts viewed the decision as setting a tone for future cases. They
expected that in a country where almost 90 per cent of all pharmaceutical patents were imported, the
decision to grant a compulsory licence to Natco would spur applications for grants of compulsory licences
by local manufacturers for other essential patented drugs that were excessively priced by the patentee
companies.58 The analysts also speculated that India’s exercising of the compulsory licensing provision
would prompt other countries, especially developing and underdeveloped countries, to resort to the
compulsory licensing provision as well, with a view to bringing down the cost of essential drugs in their
countries and pursuing a wider welfare perspective. Analysts also contemplated that the exercise of the
compulsory licensing provision in developing countries would force multinational pharmaceutical
companies to adopt a differential pricing scheme for essential drugs, charging significantly lower prices in
developing countries for these drugs.59
The compulsory licence decision disappointed the multinational pharmaceutical companies. Showing
discontent for the use of the compulsory licensing provision, Bayer chief executive officer Marijn
Dekkers labelled the compulsory licence as “essentially theft.” Hinting at the company’s profit
maximization objective, he said, “We did not develop this product for the Indian market. We developed
this product for Western patients who can afford [it].”60
Certain large multinational corporations overtly articulated their disapproval with India’s compulsory
licence process. For example, Pfizer’s chief intellectual property counsel, Roy R. Waldron, declared that,
in spite of being a member of the WTO, India had “failed to interpret and apply its IP (intellectual
property) laws in a manner consistent with recognized global standards.”61 Ranjit Shahani, president of
the Organization of Pharmaceutical Producers of India (OPPI), expressed his disappointment with the
grant of a compulsory licence, saying:
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OPPI is disappointed with the decision to issue a compulsory licence. We believe compulsory
licences should be used only in exceptional circumstances, such as in times of a national health
crisis. If used arbitrarily, compulsory licences will serve to undermine the innovative
pharmaceutical industry and will be to the long-term detriment of the patient.62
As expected, in the period subsequent to the grant of a compulsory licence to Natco for Nexavar, certain
other generic drug manufacturers in India applied for a grant of a compulsory licence at the patent office
in Mumbai. The second application came from BDR Pharmaceuticals, but the patent office rejected
BDR’s application for a compulsory licence for manufacturing BMS’s anticancer drug Dasatinib, citing
that BDR failed to establish a prima facie case for receiving a compulsory license.63 Lee Pharma Limited
was the third applicant for a compulsory licence.
WHAT SHOULD BE CONSIDERED MOST IMPORTANT: INNOVATIONS OR SOCIAL WELFARE?
The late American pharmaceutical-manufacturing executive George Merck once stated, “We try never to
forget that medicine is for the people. It is not for the profits.”64 In keeping with that ideal, the patent
controller’s grant of a compulsory licence to Lee Pharma for Saxagliptin would certainly address the
public welfare concern in India, and it would also break the monopoly of multinational giants and spur
competition within the domestic market. Frequent use of compulsory licences, however, would surely
result in retaliation by the developed world.
Alternatively, a rejection of Lee Pharma’s compulsory licence application would show the world that
India placed supreme importance in the intellectual property laws laid out by the WTO and that India was
willing to provide sufficient protection to the rights of innovators.
Given that India was on the United States’ priority watch list for patent law,65 the patent office faced a
dilemma with regard to granting compulsory licences. How should the patent controllers proceed? Should
they reject Lee Pharma’s compulsory licence request, thereby emphasizing international relations and
compliance with multilateral agreements, inventions, and innovations; or should they grant the request
and, in doing so, provide vital support for human life?
Veena Keshav Pailwar is a professor of economics at the Institute of Management Technology, Nagpur, India
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EXHIBIT 1: GLOSSARY OF KEY TERMS
Term
Branded
Drug
Bulk Drug
Formulation
Generic
Drug
Over-theCounter
Medicine
Parallel
Import
Patented
Drug
Meaning
A branded drug is the drug available in the market
by the name that is assigned to it by the
manufacturer.
A bulk drug, also known as an “active
pharmaceutical ingredient,” is the chemical
molecule that determines the claimed therapeutic
effect of a given medicine. In the absence of a
bulk drug, the drug is not considered to be a
medicine.
A formulation is the medicine we buy in the
market in the form of a tablet, capsule, syrup, etc.
A formulation consists of active pharmaceutical
ingredients as well as inactive ingredients.
A generic drug is a drug that is marketed by its
internationally approved name rather than by its
proprietary or brand name. These drugs are
manufactured without a licence from the patentee
and are marketed after the expiry date of the
patent. Generic drugs are usually equally as
effective as their branded counterparts; they are
also cheaper.
An over-the-counter medicine is one that can be
purchased without a prescription from a doctor.
A parallel import is an import of a patented drug
from a foreign country, even when the country
has sufficient availability of the drug within the
domestic market. Such imports create a problem
for the patent-holding company when it tries to
pursue a price-discrimination strategy by charging
a lower price in the foreign market and a higher
price in the domestic market.
A patented drug is a drug for which a patent has
been obtained from the government.
Source: Author’s own construct based on “Formulations and Bulk Drugs: Get the Basics Right,” The Economics Times,
December
30,
2002,
accessed
April
24,
2016,
http://articles.economictimes.indiatimes.com/2002-1230/news/27336226_1_bulk-drug-formulations-drug-manufacturers; “Generic Drugs: Trade, Foreign Policy, Diplomacy and
Health,” World Health Organization, accessed April 24, 2016, www.who.int/trade/glossary/story034/en; “Frequently Asked
Questions,” Patented Medicine Price Review Board, Government of Canada, accessed April 25, 2016, www.pmprbcepmb.gc.ca/about-us/frequently-asked-questions#1393.
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EXHIBIT 2: PRICE OF SORAFENIB (NEXAVAR) BY COUNTRY
Country
Date of
Quote
Australia
Belgium
Canada
Czech
Republic
Denmark
India (Bayer)
India (CIPLA)
Norway
Slovakia
Spain
Sweden
South Africa
United States
United
Kingdom
Feb. 10, 2012
Feb. 13, 2012
Feb. 15, 2012
Feb. 13, 2012
Price of
One Tab in
U.S.
Dollars
57.60
44.75
63.53
44.48
Feb. 13, 2012
Feb. 11, 2012
Feb. 11, 2012
Feb. 13, 2012
Feb. 13, 2012
Feb. 10, 2012
Feb. 10, 2012
Feb. 28, 2012
Feb. 10, 2012
Feb. 13, 2012
55.93
46.97
4.68
61.05
45.45
42.59
47.32
40.06
84.07
42.00
Source: Compiled from “Sorafenib (Nexavar),” Knowledge Ecology International, February 10, 2012, accessed April 25, 2016,
https://docs.google.com/spreadsheets/u/1/d/1fGQoNLp76FOad3OmoA0vXjPz3lxlemp3QTOI39K3JGY/pub?output=html.
EXHIBIT 3: TOP 15 EXPORTERS AND IMPORTERS OF PHARMACEUTICAL PRODUCTS IN THE
WORLD IN 2014
Country
Germany
Switzerland
Belgium
United States
France
United Kingdom
Ireland
Netherlands
Italy
Spain
China
Denmark
India
Austria
Sweden
Export
Share
14.57
12.19
9.64
8.84
6.52
6.29
5.36
4.99
4.81
2.46
2.43
2.39
2.38
2.06
1.57
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Country
United States
Germany
Belgium
France
United Kingdom
Switzerland
Italy
Netherlands
Japan
China
Spain
Canada
Russian Federation
Austria
Australia
Import
Share
13.52
8.85
7.54
5.74
5.73
4.45
4.35
3.73
3.68
3.36
2.88
2.34
2.33
1.71
1.57
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Source: Computed on the basis of data available from “Time Series on International Trade,” World Trade Organization,
accessed April 14, 2016, http://stat.wto.org/StatisticalProgram/WSDBStatProgramHome.aspx?Language=E.
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EXHIBIT 4: MARKET SHARE OF TOP 10 PHARMACEUTICAL COMPANIES IN INDIA, MARCH 2015
Company
Sun
Pharmaceutical
Abbott India Ltd.
Cipla
Mankind
Pharma
Zydus Cadila
GlaxoSmithKline
Alkem
Laboratories
Macleods
Pharmaceuticals
Pfizer
Lupin Ltd.
Market Share
(% of Total
Market Sales
Revenue)
8.3
6.3
5.1
3.6
3.5
3.4
3.4
3.3
3.0
2.9
Source: “India Pharmaceutical Market Reflection Report: March 2015,” IMS Health Asia Pacific, May 18, 2015, accessed
April 24, 2016, www.slideshare.net/IMSHealth_APAC/market-reflection-report-mar-2015.
This document is authorized for use only by Turki Haidar in Law for the Entrepreneur Spring 2022 taught by Sona Gala, Loyola Marymount University from Jan 2022 to Jul 2022.
For the exclusive use of T. Haidar, 2022.
Page 11
9B16M136
ENDNOTES
1
This case has been written on the basis of published sources only. Consequently, the interpretation and perspectives
presented in this case are not necessarily those of Lee Pharma Limited or any of its employees.
2
Balaji Subramanian, “Compulsory Licence Application Filed over AstraZeneca’s Saxagliptin,” Spicy IP, July 5, 2015,
accessed
March
10,
2016,
http://spicyip.com/2015/07/compulsory-licence-application-filed-over-astrazenecassaxagliptin.html.
3
“The Patents (Amendment) Act, 2005,” The Gazette of India, No. 15 (2005), accessed April 20, 2016,
http://ipindia.nic.in/ipr/patent/patent_2005.pdf.
4
“Overview:
the
TRIPS
Agreement,”
World
Trade
Organization,
accessed
April
20,
2016,
www.wto.org/english/tratop_e/trips_e/intel2_e.htm.
5
“Patent: AstraZeneca to Retain Sweetness of Onglyza,” Sinapse, January 8, 2015, accessed April 20, 2016,
www.sinapseblog.com/astrazeneca-retain-sweetness-onglyza.
6
“History,” Bristol-Myers Squibb, accessed April 17, 2016, www.bms.com/ourcompany/Pages/history.aspx.
7
Sinapse, op. cit.
8
Balaji Subramanian, op. cit.
9
Sinapse, op. cit.
10
“AstraZeneca Completes the Acquisition of Bristol-Myers Squibb Share of Global Diabetes Alliance,” AstraZeneca,
February 3, 2014, accessed April 20, 2016, www.astrazeneca.com/media-centre/press-releases/2014/astrazenecaaquisition-bristol-myers-squibb-global-diabetes-alliance-03022014.html#!.
11
₹ = INR = Indian rupee; US$1 = ₹49.23 on February 10, 2012. All dollar amounts are in U.S. dollars unless otherwise
specified.
12
Balaji Subramanian, op. cit
13
Balaji Subramanian, op. cit.
14
“Lee Pharma Limited,” tradeindia.com, accessed April 20, 2016, www.tradeindia.com/Seller-304525-LEE-PHARMALIMITED.
15
“Global Spread,” Lee Pharma Ltd., accessed March 10, 2016, http://leepharma.com/global.php.
16
Balaji Subramanian, op. cit.
17
“Application for Compulsory License under Section 84(1) of the Patents Act, 1970,” Spicy IP, accessed April 20, 2016,
http://spicyip.com/wp-content/uploads/2015/07/Saxagliptin-CL.pdf.
18
“Members
and
Observers,”
World
Trade
Organization,
accessed
March
10,
2016,
www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm.
19
“Understanding
the
WTO,”
World
Trade
Organization,
accessed
April
20,
2016,
www.wto.org/english/thewto_e/whatis_e/tif_e/understanding_e.pdf.
20
Ibid.
21
Ibid.
22
Ibid.
23
Ibid.
24
Ibid.
25
“Fact Sheet, TRIPS and Pharmaceutical Patents: Obligations and Exceptions,” World Trade Organization, accessed April
20, 2016, www.wto.org/english/tratop_e/trips_e/factsheet_pharm02_e.htm.
26
“Overview: the TRIPS Agreement,” World Trade Organization, op. cit.
27
“Indian Pharmaceutical Industry: A Global Industry,” Government of India, Ministry of Chemicals and Fertilizers,
Department of Pharmaceuticals, accessed April 24, 2016, www.pharmaceuticals.gov.in/pharma-industry-promotion.
28
Ibid.
29
“Indian Pharma 2020: Propelling Access and Acceptance, Realising True Potential,” McKinsey & Company, accessed
April 23, 2016, www.mckinsey.com/~/media/mckinsey%20offices/india/pdfs/india_pharma_2020_propelling_access_and_
acceptance.as.
30
“Indian Pharmaceutical Industry,” India Brand Equity Foundation, accessed March 10, 2016,
www.ibef.org/industry/pharmaceutical-india.aspx.
31
“India Pharma Sector: Pharmaceutical Industry Analysis,” Brand India Pharma, accessed May 19, 2016,
www.brandindiapharma.in/infographic-on-pharma-sector-business.
32
Ibid.
33
“Indian Pharmaceutical Industry: A Global Industry,” Government of India, op. cit.
34
“Pharma Outlook 2015: A Glimpse of Some Drivers and Barriers,” PILMAN, January 5, 2016, accessed April 24, 2016,
www.tapanray.in/pharma-outlook-2015-a-glimpse-of-some-drivers-and-barriers.
35
Ibid.
36
“Pharmaceutical Sector Analysis Report,” EquityMaster, accessed April 25, 2016, www.equitymaster.com/researchit/sector-info/pharma/Pharmaceuticals-Sector-Analysis-Report.asp.
37
“India Pharmaceutical Market Reflection Report March 2015,” imshealth, accessed April 24, 2016,
www.slideshare.net/IMSHealth_APAC/market-reflection-report-mar-2015.
38
Central Drugs Standard Control Organization, National List of Essential Medicines of India 2011, accessed April 23, 2014,
www.cdsco.nic.in/writereaddata/National%20List%20of%20Essential%20Medicine-%20final%20copy.pdf.
This document is authorized for use only by Turki Haidar in Law for the Entrepreneur Spring 2022 taught by Sona Gala, Loyola Marymount University from Jan 2022 to Jul 2022.
For the exclusive use of T. Haidar, 2022.
Page 12
9B16M136
39
“India to Expand NLEM 2011: A Step in the Right Direction,” PILMAN, May 11, 2015, accessed April 23, 2016,
www.tapanray.in/india-to-expand-nlem-2011-a-step-in-the-right-direction.
40
“Uniformity in Prices of Drugs,” Government of India, Ministry of Chemicals and Fertilizers, May 5, 2015.
41
Ibid.
42
Bhavik Narsana and Arijeet Mukherjee, “Issues and Trends in the Indian Pharma Industry,” Express Pharma, February 5,
2015, accessed April 25, 2015, www.financialexpress.com/article/pharma/management-pharma/issues-and-trends-in-theindian-pharma-industry/39381.
43
Ibid.
44
“Changes in India’s Patent Law,” Lorandos Joshi, Trial Lawyers, accessed April 24, 2016, www.lorandoslaw.com/CrossBorder-And-International-Law-Topics/In-the-Shadows.shtml.
45
Ibid.
46
Ibid.
47
Ibid.
48
Ibid.
49
Chittaranjan Andrade, Nilesh Shah, and Sarvesh Chandra, “The New Patent Regime: Implications for Patients in India,”
Indian
Journal
of
Psychiatry
49,
no.
1
(January–March
2007),
accessed
April
24,
2016,
www.ncbi.nlm.nih.gov/pmc/articles/PMC2900001.
50
“Fact Sheet: TRIPS and Pharmaceutical Patents: Obligations and Exceptions,” World Trade Organization, accessed April
20, 2016, www.wto.org/english/tratop_e/trips_e/factsheet_pharm02_e.htm.
51
Aayush Sharma, “India: Compulsory License: The Most Happening Section of the Patents Act, 1970,” mondaq, October
15, 2015, accessed April 25, 2016, www.mondaq.com/india/x/435044/Patent/Compulsory+License+The+Most+Happening.
52
C. H. Unnikrishnan, “BDR Pharma’s Compulsory Licensing Application for Blood Cancer Drug Rejected,” Live Mint,
October 31, 2013, accessed April 25, 2016, www.livemint.com/Companies/lR6TQA2EY5gejvMl63zHOM/Patent-officerejects-BDR-Pharmas-application-for-blood-can.html.
53
“Natco to Sell Bayer-Patented Cancer Drug Nexavar,” Business Standard, March 13, 2012, accessed April 25, 2016,
www.business-standard.com/article/companies/natco-to-sell-bayer-patented-cancer-drug-nexavar-112031300065_1.html.
54
Ibid.
55
Shamnad Basheer, “Breaking News: India’s First Compulsory License Granted!” Spicy IP, March 12, 2012, accessed
March 9, 2016, http://spicyip.com/2012/03/breaking-news-indias-first-compulsory.html.
56
R. Sivaraman, “Natco Pharma Wins Cancer Drug Case,” The Hindu, March 4, 2013, accessed March 10, 2015,
www.thehindu.com/business/companies/natco-pharma-wins-cancer-drug-case/article4475762.ece.
57
Shamnad Basheer, op. cit.
58
Ibid.
59
Ibid.
60
Glyn Moody, “Bayer’s CEO: We Develop Drugs for Rich Westerners, Not Poor Indians,” Techdirt, January 27, 2014,
accessed April 25, 2016, www.techdirt.com/articles/20140124/09481025978/big-pharma-ceo-we-develop-drugs-richwesterners-not-poor.shtml.
61
Priyanka Rastogi and Anshu Bansal, “India: Compulsory Licensing: An Emerging Trend towards Indian-Patent Regime,”
mondaq,
February
25,
2014,
accessed
March
9,
2016,
www.mondaq.com/india/x/295286/Patent/Compulsory+Licensing+An+Emerging+Trend+Towards+IndianPatent+Regime.
62
E. Kumar Sharma, “Natco Pharma’s Grant of Compulsory Licence Hits Controversy,” Business Today, March 13, 2012,
accessed March 9, 2016, www.businesstoday.in/opinion/perspective/natco-pharma-compulsory-licence-controversypharma-industry/story/23138.html.
63
Neha Mittal and Divya Srinivasan, “Compulsory Licensing in India and the ‘Big Pharma’ Debate,” China Business Law
Journal (November 2015), accessed April 25, 2016, www.lexorbis.com/wp-content/uploads/2015/11/CBLJ.pdf.
64
Glyn Moody, op. cit.
65
Executive Office of the President of the United States, 2015 Special 301 Report (April 2015), accessed April 25, 2016,
https://ustr.gov/sites/default/files/2015-Special-301-Report-FINAL.pdf.
This document is authorized for use only by Turki Haidar in Law for the Entrepreneur Spring 2022 taught by Sona Gala, Loyola Marymount University from Jan 2022 to Jul 2022.