SINGAPORE--The U.S. Supreme Court may have handed the Delhi High Court in India something else to ponder in mulling the use of compulsory licensing ahead of a possible hearing next month.
The U.S. court kicked a fight over Teva Pharmaceutical's ($TEVA) Copaxone patent back to a lower court, in a decision that could have ripple effects to other patent cases in the U.S.--and will likely delay generic versions of the blockbuster multiple sclerosis drug. A partnership between India's Natco Pharma and U.S.-based Mylan ($MYL) is among the would-be makers of Copaxone generics, and the SCOTUS ruling raised some eyebrows there.
The U.S. action came a week after the Delhi court barred Cipla from marketing a copy of Novartis' ($NVS) respiratory drug Onbrez. The Indian generics specialist had challenged Novartis' patents on the drug, but it started selling its version of the med while the challenge was still pending. Novartis sued in November to stop the Onbrez copies.
One argument on Cipla's part was that Novartis doesn't manufacture the drug in India, but imports supplies from elsewhere. The two-judge panel in Delhi questioned a Novartis lawyer about how it could claim to be using its India patent since it was not producing Onbrez in the country.
Cipla said its discounted copy was necessary to make sure Onbrez supplies are adequate; the panel disagreed, and refused to let the generics maker sell its version without compensating Novartis. The court said that if Novartis' supplies of the drug proved inadequate, Cipla could apply for a compulsory license, which, if granted, would force Novartis to license Onbrez to the company and allow cheap generics. The court also suggested that Cipla negotiate a royalty arrangement with the Swiss drugmaker.
Meanwhile, the U.S. case involved Teva's Copaxone (glatiramer) for treating multiple sclerosis. India's Natco, which had a marketing agreement with Mylan to market a Copaxone generic, and Momenta Pharma and the Novartis unit Sandoz were named in the suit, along with Cipla. The issue before the court wasn't about the patent itself--whether it was valid or invalid. It was a legal question: Should the appeals panel have deferred to the district court's reading of the facts in the case? Or review the facts itself, along with whatever legal questions were at hand?
SCOTUS decided that the appeals court should have deferred to the lower court's factual determinations. The decision stands to affect other patent lawsuits, so it's a big deal for U.S. courts, lawyers say.
The matter was important in India partly because of Natco's bid to market Copaxone generics. Indian markets appeared to have a major concern over the impact of the Supreme Court decision and drove Natco stock value down nearly 6%.
But in broader terms, the Copaxone ruling seemed to favor Israel-based Teva and Copaxone, one of its few branded drugs, over generics makers and their products. U.S. drugmakers and multinational companies have waged a campaign against India's limited protections for intellectual property, and the use of compulsory licenses in particular.
Teva, usually known as a generics maker, said it was "encouraged" by the Supreme Court's decision. The patent fight roiled most of last year, as the unexpected loss of the 2015 Copaxone patent put the sales of its best-selling drug in danger. At the same time, Teva moved to cement loyalty by switching patients to a new three-injections-a-week formulation.
The idea of compulsory licensing has been a particular thorn in Big Pharma's side, ever since Indian officials forced Bayer to license its Nexavar cancer treatment to Natco Pharma for sale in India at a discount. The issue could be brought up next week when President Barack Obama meets with India Prime Minister Narendra Modi, who has made "Make in India" his policy.
Special Reports: Top 10 Drug Patent Losses of 2014 - Copaxone | Top 10 Generics Makers by 2012 Revenue - Teva - Novartis (Sandoz) - Mylan