“It is unclear whether a manufacturer, who has not launched its new drug for over six months after receiving DCGI approval but before the Circular Date, will face cancellation immediately.”

Uncertainty surrounds a diktat from the drug regulator that mandates drug-makers to launch their new products within six months of getting an approval to sell, or face cancellation of their licence to make the drug.

Even as the applicability of timelines mentioned in the regulator’s circular are unclear, domestic drug-makers are also worried that the directive could trip their ability to challenge patents at the courts.

The Drug Controller General of India’s (DCGI) circular, earlier this month, was to ensure that drug-makers submit follow-up safety reports on a new drug, up to four years.

But it will affect domestic drug-makers who want to challenge patents of innovator companies, says D.G. Shah, of the Indian Pharmaceutical Alliance.

A strategic decision to challenge a patent may be taken by a local company even before it seeks an approval to manufacture the drug. But the subsequent examination of the patent, review against international information, and decision on whether to challenge the patent or launch at risk, is a time-consuming process, he points out.

His observation comes against the backdrop of several patent-related cases being in different stages of arguments and judgments, after being challenged by local drug-makers at the Indian courts.

Uncertainty

A research paper by law firm Nishith Desai Associates points towards the uncertainty surrounding the applicability of the circular.

“It is unclear whether a manufacturer, who has not launched its new drug for over six months after receiving DCGI approval but before the Circular Date, will face cancellation immediately,” the paper said.

“Moreover, the Circular appears to be disconnected from commercial realities of the day. The pharmaceutical companies have to bear significant cost to go through the entire process of clinical trials before a new drug is approved for marketing. There may be several commercial reasons, including strategic reasons, for not launching a new drug immediately upon receiving approval. It is unreasonable for the DCGI to cancel approvals on the ground that the new drug has not been marketed within six months.”

Since the intent behind the circular is to get pharma companies to file safety reports on new drugs, the paper suggests, the DCGI could have taken the benefit of existing provisions under the Drugs and Cosmetics Act and its Rules and issued a circular clarifying that “irrespective of when the new drug is marketed post-approval, the PSUR (Periodic Safety Update Report) requirement will be applicable for four years from the date of marketing.”

Further, it points out, the decision to stipulate a time frame may be construed as creation of a new rule, which under law, can only be done by a Central Government notification in the Official Gazette.

“From a plain reading of the Rules, it does not appear that there is legislative intent to provide DCGI with the power to determine time frame for launch of products,” the paper said.

jyothi.datta@thehindu.co.in

(This article was published on January 30, 2013)
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