CCI orders Investigation against Roche

The Competition Commission of India (CCI), based on a prima facie determination on contravention of Section 4(2)(c) of the Competition Act, ordered investigation against Roche with respect to the cancer drug, Trastuzumab. The complaint was filed by Biocon and Mylan Pharmaceuticals.

Facts of the case: –

  • Genentech developed a monoclonal antibody, which is used in the targeted therapy to treat breast cancer that over expresses the HER-2 (human epidermal growth factor receptor 2) protein. The International Non-Proprietary Name (hereinafter ‘INN’) for this monoclonal antibody is Trastuzumab
  • Genentech signed an agreement with Roche in July, 1998, whereby Roche was given the exclusive marketing rights to sell Trastuzumab, under the brand name HERCEPTIN, outside the USA. HERCEPTIN was introduced in India in 2002 by Roche. The drug was imported and marketed in India initially through a distributor, Taksal Pharmaceuticals, under a marketing arrangement. This arrangement was subsequently terminated, and the marketing was thereafter done by Roche Produces, India.
  • Roche was granted following approvals:
11th October, 2002, import of HERCEPTIN for treatment of patients suffering from ‘metastatic breast cancer’. HERCEPTIN in 440 mg.
25th January, 2008, import and market HERCEPTIN in 150 mg vials
07th August, 2006 HERCEPTIN for treatment of patients suffering from HER-2 positive early breast cancer (adjuvant and neo adjuvant)
03rd April, 2010 HERCEPTIN for treatment of patients suffering from HER-2 positive metastatic gastric cancer
  • Glenmark Pharmaceuticals Limited Challenged the drugs patent in a post-grant opposition on 12th December, 2008. Before a decision could be reached on this opposition, the Roche Group stopped paying annuities in May, 2013 and consequently, the patent lapsed.
  • Roche withdrew HERCEPTIN from the Indian market and rather introduced a lower cost version of Trastuzumab, known as BICELTIS, which was distributed and marketed by Emcure Pharmaceuticals as per an agreement.
  • The Informants have claimed that BICELTIS, which was priced at USD 1270 (Rs.75,000) per 440 mg vial, was primarily introduced in India due to the threat of compulsory licensing and development of biosimilar Trastuzumab. The Roche Group also launched another low cost version of Trastuzumab under the brand name HERCLON in India at a price of USD 1270 (Rs. 75,000) per 440 mg vial
  • On 18th January, 2014, the launch of biosimilar Trastuzumab was announced by Boicon and Mulan under the brand names, CANMAb and HERTRAZ, respectively.
  • It has been stated that the drug was proposed to be launched in vials of 150 mg priced at Rs. 19,500/-per vial and 440 mg priced at Rs. 57,500/- per vial. The price of the 440 mg vial of Trastuzumab manufactured by the Informants is claimed to be 25% lower than HERCLON and BICELTIS and 50% lower than HERCEPTIN.

It was alleged by the Informants that Roche Group, with the intention of preventing the entry of new players in its market of ‘Trastuzumab’, started indulging into frivolous litigations against the Informants: –

  • Writing frivolous communications to various authorities thereby attempting to impede the entry of the Informants.
  • Roche Group has also resorted to vexatious litigation against the Informants and other competitors/potential entrants in the relevant markets, with the sole intention of preventing launch and/or market penetration of approved biosimilars of Trastuzumab.
  • Misinforming doctors and hospitals about the pending Civil Suit and warning them of severe consequences as a result of prescribing HERTRAZ while the suit is pending.

Findings in the order:-

Before analysing the aforesaid allegations within the realm of the Act, the order deals with the preliminary objection raised by the Roche Group on maintainability of the present case. During the hearing, Roche Group has argued that the issues raised in the present information are squarely covered by the Civil Suit pending before the Hon’ble Delhi High Court and thus, the Informants should not be permitted to raise similar issues before the Commission.

The Court agreed with Biocon and Mylan , that while the issues before the Hon’ble Delhi High Court pertain to the validity of approvals granted by DCGI to Informants, the primary issue before the Commission is whether the Roche Group’s conduct in the market is abusive or not. The two are therefore different, and CCI has jurisdiction to decide the present case.

The order also first defines the relevant product market of the drug in question. Biological drugs as well as its biosimilars form part of the same relevant product market. In the present case, the relevant product market, thus, would be the “market for biological drugs based on Trastuzumab, including its biosimilars”. The court held that drugs based on Trastuzumab,i.e., the reference biological drug as well as its bio-similars, would be considered part of the same relevant product market. A relevant product market, within the meaning of Section 2(t) of the Act, need not comprise of products which exhibit ‘identical’ properties; it may also include products which are ‘similar’ in terms of their intended use. In this regard, the Commission finds force in the submission made by the Informants that a biosimilar drug obtains an approval from the regulatory authority only after proving itself to be similar to the reference biological drug in terms of ‘safety’ ‘efficacy’ and ‘quality’. Despite not being identical to the reference biological product, a biosimilaris highly analogous to an already approved biological product and may not have any meaningful differences from the reference product

With regard to the relevant geographic market, the Commission held that the conditions of competition are homogenous across India for pharmaceutical products. Therefore, the relevant geographic market in the present case would be ‘India’.

The Commission observes that undoubtedly, after the introduction of biosimilars, the market share of Roche Group has gone down in the relevant market during 2014 and 2015. However, the allegations in the present case pertain to abusive conduct by Roche Group during the period starting from year 2013 till date. Till 2014, Roche Group had 100% market share. Although its market share fell in the year 2014; it still held a considerable market share in 2014 (83.9% in terms of value and 77% in terms of volume of sales) and 2015 (70.9% in terms of value and 61% in terms of volume of sales).

Considering the long drawn legal battle between the parties before the Hon’ble Delhi High Court, the Commission held that they are reluctant to hold that the litigations filed by Roche Group are baseless. Recourse to legal proceedings, being a right of every party, cannot be concluded to be tainted with ulterior motives as a general principle. Such determination has to come sparingly in exceptional circumstances and the Commission held that it is not convinced that any such circumstance has arisen in this case. Thus, for the foregoing reasons, the allegations of the Informants with regard to vexatious litigation were, prima facie, found to be without merit.

It was however held by the commission that Roche group has approached doctors, hospitals, tender authorities, etc., to influence their perception about the efficacy and safety of the Informants’ products. The Commission is conscious that competitors, in normal business parlance, indulge in tactics to belittle competitors’ products. However, the commission observed that there is difference between puffery aimed at promoting one’s own product and adopting practices which disparage or malign the image of competitors, thereby causing competitive disadvantages to them. This is even more harmful in the pharmaceutical sector, where such disparagement is made to the doctors who are treating the patients of cancer. The line of difference between these two business strategies is very thin, however, when crossed by a dominant enterprise to its own illegal advantage, it warrants intervention by the competition authority.

The Commission also held that creating any iota of doubt in the minds of doctors can adversely affect the market for biosimilars, which is prescription induced, beyond repair. Such disparagement may also have ripple effects within the medical community. In this scenario, those biosimilar manufacturers who do not have strong marketing channels amongst doctors may be forced out of the market because of abusive denigration by a dominant player.

Based on the foregoing analysis, the Commission held that prima facie, the contravention with regard to Section 4(2)(c) of the Act is made out against Roche Group, which warrants detailed investigation into the matter.

Annual Report – IPO

The annual Report 2015-16 of the Office of Controller General of Patents, Designs & Trade Marks has been published. Some noticeable points are as follows:-

  • 10% increase in patent filing compared to 2014-15. Total filing in 2015-16 being 40,946. 8% filings have increased by Indian applicants, and approximately 10% by foreign residents.
  • 52.80% increase in disposal of applications compared to 2014-15. 21987 applications disposed of, which includes 6326 grants, 13908 applications abandoned, 432 applications withdrawn , and 1321 applications refused. See Detail here.
  • Top 5 Indian Patentees Include:- CSIR, Samsung R&D Institute India, BHEL, DRDO.
  • Top foreign Patentees include:- GM Global Technology operations, Qualcomm incorporated, LG electronics Inc., Philips electronics N.V., Honda Motor Co. Ltd.
  • 290 pre grant oppositions were filed in 2015-16. This number is slightly higher compared to 247 which were filed in 2014-15. 88 were disposed off in 2015-16.
  • 6 post grant oppositions were filed in 2015-16. 10 were disposed of in 2015-16.