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.


Trastuzumab “can” be sold as a bio similar to Roche’s Trastuzumab

The division bench of the Delhi High Court, of Badar Durrez Ahmed and Sanjiv Sachdeva, has permitted Biocon and Mylan to use Roche’s product data for Trastuzumab. Roche had challenged the approval mechanism adopted by the central drug standards controller (CDSCO) in giving Biocon and Mylan approval for its biosimilar drug and their product inserts containing product data before the single judge.

 Earlier, the Delhi High Court, in a single bench order, had allowed Biocon and Mylan to market their product without any reference to Roche’s product or biosimilarity.

 Stay tuned for a fuller report!

Notifications under Section 26A of the Drugs and Cosmetics Act declared legally untenable

454 petitions were filed against the 344 Notifications dated 10th March, 2016 of the Government of India, all in exercise of power under Section 26A of the Drugs and Cosmetics Act, 1940 (Drugs Act) prohibiting the manufacture, distribution and sale in the territory of India of drugs 344 Fixed Dose Combination (FDC) Drugs. The petitions have been declared legally untenable.

Section 26A of the Drugs Act, in exercise of powers whereunder the Central Government has issued the impugned Notifications, is as under:-

 26A. Power of Central Government to prohibit manufacture, etc., of drug and cosmetic in public interest.— Without prejudice to any other provision contained in this Chapter, if the Central Government is satisfied, that the use of any drug or cosmetic is likely to involve any risk to human beings or animals or that any drug does not have the therapeutic value claimed or purported to be claimed for it or contains ingredients and in such quantity for which there is no therapeutic justification and that in the public interest it is necessary or expedient so to do, then, that Government may, by notification in the Official Gazette, [regulate, restrict or prohibit] the manufacture, sale or distribution of such drug or cosmetic.

The question raised in the petition was that, is the Central Government entitled to exercise the power under Section 26A without consulting or even involving the Drug Testing Advisory Board (DTAB) and the Drug Control Committee (DCC). Further question which arises is, whether the Central Government can exercise the said power in consultation with and on the advice and recommendation of, another Committee, though also of technical persons only, constituted by the Central Government.

The court held that, undoubtedly Section 26A does not require the satisfaction thereunder of the Central Government to be in consultation with or on the aid, advice or recommendation of DTAB and/or DCC or after having the requisite tests carried out from the Central Drugs Laboratory but a mere absence of the said words from Section 26A would not mean that Section 26A is to be read in isolation.

As per the decision, the functions to be performed by the Central and the State Governments under the Drugs Act are not administrative, but largely technical, and therefore the Drugs Act has devised the machinery for advising the Central and the State Governments on such technical matters arising out of the administration of the Act and to carry out the functions assigned to them under the Act. Merely because the powers vested in the Central Government vide some other Sections of the Act expressly provide for exercise thereof on advice of or in consultation with DTAB and/or DCC does not take away from the wide language used in Sections 5&7 while prescribing the purpose of constitution of DTAB & DCC, to advise the Central Government on technical matters arising out of  administration of the Act and to carry out other functions assigned to Central Government by the Act.

The provision in the Drugs Act for constitution of DTAB and DCC is to ensure institutional integrity and compliance of public law principles in discharge of functions and exercise of power thereunder. Though the legislature, in the Drugs Act, vested the Central Government with the powers to be exercised thereunder but at the same time constituted DTAB to advice the Central Government on technical matters arising out of administration of the Drugs Act and to carry out other functions assigned to the Central Government by the Act and the DCC, also to advice the Central Government and the DTAB on any matter tending to secure uniformity throughout India in administration of the Act.

The Court cited 6 judgments delivered by various High Courts in support of the proposition that the DTAB and DCC play a central role in the decision making process envisaged by Section 26A. On the basis of these judgments, it drew the inference that a decision made under Section 26A without consulting these bodies would be legally untenable.

The court also held that the Central Government, though acting in public interest, seems to have gone about it in a haphazard manner. It claims that the FDCs for manufacture of which licences were issued by SLAs between September, 1988 and 1st October, 2012 without the same having approval of the Drugs Controller were wrongly granted such licences. However instead of taking action for cancellation of said licences, the manufactures were asked to apply for licences to be Drugs Controller, while continuing to manufacture the drugs for which according to the Central Government licence was wrongly given. When such applications were received, instead of the same being considered by the Drugs Controller, who is vested with the power of approval, ten committees were constituted for considering the applications. After the said committees failed to examine all the applications, the Kokate Committee was constituted. The said Kolkata Committee, instead of considering the applications for approval, went into the aspects of risk to consumers and therapeutic value and therapeutic justification and on receiving report whereof impugned Notifications were issued.