Smriti Yadav, Partner, Khaitan & Co
Shwetank Tripathi, Senior Associate, Khaitan & Co
In the matter of Roche Products (India) Private Limited and others v Cadila Healthcare Limited and others, [CS(COMM) 1119 of 2016] and F. Hoffmann-La Roche Ltd & Ors v Drug Controller General of India & others [CS(COMM) 540 of 2016] (Suit), the Learned Single Judge of the Delhi High Court (Court) has passed an order dated 24 February 2020 (Decision) negating the maintainability challenge raised by Cadila (defined hereinafter) inter alia on the ground that the orders passed by DCGI and DoB (defined hereinafter) cannot be challenged in civil courts as the same are appealable under the 1945 Rules (defined hereinafter) before the Central Government.
In 1990, Genentech, Inc. claimed to have developed an innovator biological drug containing the active ingredient ‘Trastuzumab’ (Plaintiffs’ Drug). Between 1992 to 1998, extensive global clinical trials were conducted to test the safety, efficacy and quality of the Plaintiffs’ Drug for the indication HER2+ metastatic breast cancer. Since 1998, Roche Products (India) Private Limited, F. Hoffmann La Roche, AG and Genentech, Inc. (Plaintiffs) claimed to be selling the Plaintiffs’ Drug worldwide under brand names Herceptin / Herclon / Biceltis for treatment of HER2+ metastatic breast cancer and subsequently also for the treatment of HER2+ early breast cancer and HER2+ metastatic gastric cancer.
Subsequently, the patent for the Plaintiffs’ Drug had expired and in 2016, the Plaintiffs filed the Suit against the Defendants viz. Cadila Healthcare Limited (Cadila), Drug Controller General of India (DCGI) and Department of Biotechnology, Ministry of Science and Technology, Government of India (DoB) seeking a declaration that the alleged biosimilar drug manufactured by Cadila (Cadila’s Drug) had not been tested as, and is not, a biosimilar drug to the Plaintiffs’ Drug; that the approvals and marketing authorization given to Cadila’s Drug by DCGI and DoB, is not in accordance with law; injunction restraining Cadila from selling/advertising/representing Cadila’s Drug as biosimilar to Plaintiffs’ Drug, including for copyright infringement, passing off, misrepresentation, dilution of goodwill, etc.
The Suit came up for hearing before the Court on 19 August 2016 when Cadila contended that the approval granted to Cadila’s Drug is appealable under Rule 122DC of the Drugs and Cosmetic Rules 1945 (1945 Rules), and in view of the same, the Suit is not maintainable as the approval granted by DCGI cannot be challenged in a civil court. Since none appeared for other defendants viz DCGI and DoB, the Court adjourned the matter. Thereafter, the issue of maintainability was heard by the Court on various hearings and order was reserved on 10 November 2016. In the meanwhile, a coordinate Bench of the Court passed two orders, both dated 25 April 2016 (Earlier Orders), in similar suits filed by the Plaintiffs against other drug manufacturers viz. Biocon Limited, Mylan Inc., Mylan Pharmaceuticals Limited and Reliance Life Sciences Private Limited, inter alia holding that such suits were maintainable in the civil court as the remedy of appeal under Rule 122DC of 1945 Rules was not available to the Plaintiffs. These Earlier Orders were challenged before the Division Bench of the Court as well as the Hon’ble Supreme Court (Supreme Court). In light of the pending appeals, the Court adjourned the present Suit until further orders from the appellate courts.
In December 2019, the Supreme Court passed an order in SLP(C) No 24727/2019 (filed by Reliance Life Sciences) whereby the Supreme Court upheld the earlier order dated 25 April 2016 of the Learned Single Judge and relegated the matter to the Learned Single Judge for an expeditious disposal. The Plaintiffs, relying on the Supreme Court’s order, moved the Court for appropriate directions in the present Suit.
Issue and rival contentions
The initial question to be determined by the Court was that once Cadila was entitled under law to manufacture Cadila’s Drug after obtaining requisite approvals from DCGI and DoB, and once Cadila had obtained requisite approvals from these authorities, can the civil court test the validity of the approvals so obtained.
The Plaintiffs relied upon the Earlier Orders inter alia holding that Rule 122DC of the 1945 Rules does not cover appeals against ‘approvals’ granted under Part XA of the 1945 Rules and is limited only to appeals against ‘orders’ passed by DCGI under Part XA of the 1945 Rules, and that such remedy of appeal was only available to a person who is before DCGI in the first instance, and not to a third party aggrieved person. The Plaintiffs further contended that the expression ‘any person aggrieved’ in Rule 122DC of the 1945 Rules can only mean the Applicant before the DCGI as others / third parties do not even come to know of the grant or refusal of licence. The Plaintiffs further contended that there were statutory non-compliances by the DCGI and DoB and other authorities in grant of permissions to Cadila’s Drug and such statutory non-compliances are subject to the jurisdiction of the civil court, and therefore, the Suit is maintainable.
In response, the Defendants inter alia contended that the permission/approval granted to Cadila’s Drug is also an ‘order’ within the meaning of Rule 122DC of the 1945 Rules which was appealable before the Central Government, and therefore, the Suit was not maintainable before the Court.
Findings and Decision
Incidentally, the Indian Government has recently notified the New Drugs and Clinical Trial Rules 2019 (2019 Rules) which expressly substituted the 1945 Rules qua the new drugs and investigational new drugs for human use, including the appeal provisions. In view of the same, the Court observed that it is not necessary to go into the rival contentions of the parties or the proceedings or the orders passed by the courts in similar suits, as under the 2019 Rules, the corresponding appeal provisions starts with the expression ‘an applicant who is aggrieved by the decision of the Central Licensing Authority’ as opposed to ‘any person aggrieved’ in the 1945 Rules. The Court observed that this necessarily means that the availability of the appeal provision in the 2019 Rules have been restricted to the ‘Applicant’ before the DCGI, and the same is not available to any other aggrieved person. Thus, the Defendants’ challenge on maintainability of the Suit has become infructuous with the deletion of appeal provision viz. Rule 122DC of the 1945 Rules.
Biosimilar drugs, by their very nature, require rigorous testing and trials. Thus, if approvals are granted by DCGI and DoB to a biosimilar drug without the prescribed clinical trials and testing, the innovator of the biological drug may be aggrieved. In such a scenario, the innovator ought not to be left remediless. With the 2019 Rules coming into effect and with the Decision passed by the Court, the typical preliminary objection raised by the defendants on the maintainability of such suits instituted by an innovator of the biological drug is no more available to manufacturers of biosimilar drugs as the Decision finally settles this issue.
Smriti Yadav is a Partner at Khaitan & Co. You can find her on LinkedIn.
Shwetank Tripathi is a Senior Associate, Khaitan & Co. You can find him on LinkedIn.