Russia – Patent law: first compulsory license in the area of pharmacy granted
The pharmaceutically active ingredient Lenalidomide (trade name: Revlimid) of the US company Celgene is an immunomodulatory drug for the treatment of, among others, multiple myeloma, myelodyplastic syndrome and mantle cell lymphoma. The global sales volume of this drug amounts to about 12 billion USD per year (2016) so that, in monetary terms, this is one of the highest-grossing medicaments in the world. According to Russian generics companies, Russian governmental authorities at the present time purchase Lenalidomide from Celgene on the Russian market in an amount of about 9 billion RUB per year (1 EUR ≈ 75 RUB).
Patent RU 2 595 250 represents the corresponding compound patent of Celgene which protects, in Russia, the compound Lenalidomide per se, as well as any product that comprises this active ingredient. By force of a patent term extension (PTE / SPC), the expected expiry date of this patent has been extended until 25 July 2022.
The Russian generics company “Nativa” owns a (later) dependent patent that cannot be exploited without infringing Celgene’s Lenalidomide patent. Nativa therefore lodged an action with the Russian Arbitration court of the city of Moscow for the grant of a compulsory license, and on 01 June 2018 the Arbitration court complied with this request of Nativa and granted the compulsory license. This license represents the first compulsory license in the Russian Federation in the area of the pharmaceutical industry. Meanwhile, the appeal of Celgene against the grant of this compulsory license has been dealt with by the Appeal Arbitration Court, and on 17 September 2018 the Appeal Court has taken the decision to reject the appeal and to keep up the compulsory license that was granted by the lower court instance. The court decision is therewith legally valid and a possible cassation appeal to the next court level, the Russian IP Court, does not have a suspensive effect.
Subject matter of Nativa’s dependent patent RU 2 616 976 is a new crystal form of Lenalidomide (polymorphic form ß). According to the pleadings made by Nativa in the court proceedings, their polymorphic form ß will be obtained immediately in the desired particle size so that, in comparison to the conventional synthesis process used by Celgene for the manufacturing of their own Lenalidomide, the process steps “milling” and “sieving” of the active ingredient can be omitted. According to the statements of Nativa, this represents a significant technological achievement. Moreover, due to the simplified manufacturing process, also an economic advantage over Celgene’s earlier patent is evident. As a consequence thereof, Nativa explained, in monetary terms the price of Nativa’s generic Lenalidomide is about 20% below the price for which Celgene offers this drug on the Russian market.
The court therefore came to the conclusion that the conditions for the grant of a compulsory license are fulfilled (the dependent patent must represent an important technical achievement and shall provide significant economic advantages over the earlier dominant patent). Both lower court instances complied with the action of the patentee of the dependent patent and granted to Nativa an unlimited non-exclusive compulsory license to the full extent of Celgene’s patent RU 2 595 250. The amount of royalties which need to be paid by Nativa to Celgene has been fixed by the court to 30% of the profit that will be achieved by the generic product.
The concept of a “dependent patent” has been introduced into the Russian patent legislation effective since 01 October 2014 only. The above-mentioned case represents the first compulsory license in the field of pharmacy that has been granted in the Russian Federation since then. It may be seen as a precedent case which probably will be mimicked by other generics companies in the near future. A whole series of similar actions for compulsory licenses for patent-protected active ingredients on the basis of dependent patents dealing with a new polymorphic form of the corresponding active ingredient has already been initiated by Nativa before the Arbitration Court (Sunitinib of Pfizer; Sorafenib of Bayer; Dasatinib of Bristol Myers Squibb). For these pending proceedings, a decision of the Arbitration Court in the first instance may be expected already in October this year.