Over the past two months, the developments in the healthcare and pharma industry particularly focused on extending the scope of good manufacturing practices for pharmaceutical products and regulating medical research and governance in homeopathic medicines. Major pharmaceutical companies have actively advocated for parallel approval of drugs in India, aligning with global markets, aiming to streamline the launch of new medicines in India. This edition of ‘Checking the Pulse’ delves into crucial updates spanning from December 2023 to January 2024 in the healthcare and pharma sector and briefly talks about major deals which drew attention from the industry.
RECENT LEGAL & REGULATORY DEVELOPMENTS
Delhi High Court grants injunction against Mankind Pharma Limited for infringing Hind Chemical’s ‘SU-MAG’ packaging
Hind Chemicals Limited (“Hind Chemicals”) challenged the trademark ‘GUDMAG’ used for pharmaceutical preparations under the Trademarks Act, 1999 alleging that the trademark was deceptively similar to their ‘SuMAG’ mark. The Delhi High Court1 granted injunction against Mankind Pharma Limited (“Mankind”) preventing it from using the mark ‘GUDMAG’.
The Delhi High Court noted that the packaging of Hind Chemicals and Mankind had similar colour combination and that Mankind has attempted to imitate Hind Chemicals’ popular packaging, which has been in the market since 1967. The Court ordered for a sum of INR 5 Lakhs to be paid by Mankind to Hind Chemicals within a period of 3 months. Upon the expiry of 3 months, Mankind would be liable to pay interest at the rate of 8% per annum if Hind Chemicals is forced to undertake execution proceedings.
Parallel approval of drugs in sync with global markets to expedite the launch of new medicines in India
The Organisation of Pharmaceuticals Producers of India (“OPPI”) representing multinational pharma giants like Novartis, Roche, Sanofi, AstraZeneca and Merck, has requested the Drug Controller General of India (“DCGI”) to enable drug approvals in India in parallel with approvals being granted in the global market. This request is made due to the inadvertent delay of getting drug approvals in India as compared to the United Kingdom, United States, and the European Union. The main challenge which causes this delay are complex clinical trials. OPPI envisions a transformative approach to drug approval processes, advocating for regulations that enable parallel filing of marketing approval applications in sync with major global markets. OPPI further focused on the importance of a predictable regulatory pathway with minimal ambiguity and enabling early access of innovative therapies to patients in India. According to the OPPI, the timelines can be easily reduced to less than 2 years if India participates in global trials for early access to innovation and for bringing innovative therapies to Indian patients. This can be further shortened if the overall review timeline is reduced to 12 months, or the review is done parallel to the global market.2
Regulations for medical research and governance in homeopathy
The National Commission for Homeopathy (Medical Research in Homeopathy) Regulations, 2023 (“MRH Regulations”) came into effect on December 1, 2023.3 The MRH Regulations aim to set standards for medical research in homeopathy in India, including setting up of a research regulation committee to monitor research progress. The MRH Regulations set the standards for research on pre-clinical and clinical trials and regulates advance research of homeopathy on scientific lines in an interdisciplinary and integrative manner.
Further, the National Commission for Homeopathy (General) Regulations, 2023 (“NCH Regulations”)4, have also come into effect on December 4, 2023. The NCH Regulations aim to regulate the governance and collaboration of various stakeholders within the field of homeopathy such as mandatory joint sitting (at least once a year) of the National Commission for Homeopathy, the National Commission for Indian System of Medicine, and the National Medical Commission. Further, autonomous boards like the Board of Ethics and Registration for Homeopathy, Homeopathy Education Board, and the Medical Assessment Rating Board for Homeopathy are required to meet at least once a month to fulfil their assigned functions under the National Commission for Homoeopathy Act, 2020 and the NCH Regulations. The NCH Regulations also empower the National Commission of Homeopathy to engage experts and professionals to strengthen the governance, collaboration, and overall standards within the field of homeopathy.
DCGI to lay down new rules for compounding of offences
The Jan Vishwas (Amendment of Provisions) Act, 20235 which was passed earlier this year, and is yet to be notified, provided for certain offences under the Drugs and Cosmetics Act, 1940 (“Drugs Act”) to be compoundable offences. Accordingly, offences relating to contravention of the provisions of the Drugs Act for manufacturing of drugs, excluding adulterated or spurious drugs, will be compounded by the central government or the state government. In view of the above, the DCGI has made recommendations to frame rules for compounding of offences under the Drugs Act and the central government is expected to soon come out with the draft rules for the same.6
Delhi High Court passes a favourable order for GSK on alleged overcharging of Ventorlin inhaler
Glaxo SmithKline Pharma (“GSK”) has received a favourable order in the 18-year-old battle with National Pharmaceutical Pricing Authority (“NPPA”) over an alleged overcharging of Ventorlin inhaler. The Delhi High Court quashed two orders of the NPPA demanding deposit of around INR 5.59 Crores for overcharging for its anti-asthmatic medicine Ventorlin inhaler.7
NPPA’s allegation for overcharging was for the period starting from March 2002 to August 2003. GSK informed the Delhi High Court that the period of dispute (i.e., from March 2002 to August 2003) was the period during which the judgement of the High Court of Bombay striking down the inclusion of Ventorlin under the Drugs (Prices Control) Order, 1995 (“DPCO”), was in operation. It was only for this period that the company had increased the price of the inhaler. Subsequently, when the Supreme Court set aside the order passed by the High Court of Bombay on August 1, 2003, GSK reduced the price of the drug in accordance with the DPCO. The Delhi High Court concurred with GSK’s submission and concluded that there was no overcharging by the company with respect to Ventorlin inhaler.
Good manufacturing practices (GMP) revised under the pharma manufacturing rules
On January 5, 2024, the Ministry of Health and Family Welfare (“Health Ministry”) notified an amendment (“GMP Amendment”) to Schedule M of the Drugs and Cosmetics Rules, 1945 (“Drug Rules”).8 Schedule M of the Drug Rules prescribes good manufacturing practices for pharmaceutical products. The GMP Amendment has broadened the scope of ‘Good Manufacturing Practices’ to ‘Good Manufacturing Practices and Requirements of Premises, Plant and Equipment for Pharmaceutical Products’, thereby extending the compliances and quality standard requirements to premises, plants, and equipment. The GMP Amendment extends the scope of its application to contract manufacturers as well. Every contract manufacturer is required to adhere to the compliances stipulated under the GMP Amendment, and the contract givers are required to evaluate the same. Sub-contracting and changes in the process, equipment, test methods, specifications are required to be undertaken with the approval of the contract giver. Other changes include introduction of pharmaceutical quality systems (PQS), quality risk management (QRM), product quality review (PQR), qualification and validation of equipment, and a computerised storage system for all drug products. The GMP Amendment prescribes the following timelines for complying with the requirements: (a) large manufacturers (having a turnover in excess of INR 250 Crores) have been given a period of 6 months from the date of publication of the GMP Amendment (i.e., January 5, 2024); and (b) small and medium manufacturers (having a turnover of up to INR 250 Crores) have been given a 12-month window.9
Allahabad High Court declares medical representatives as deemed ‘workmen’ within the meaning of the Industrial Disputes Act, 1947
The Allahabad High Court delved into the classification of medical representatives as ‘workmen’ under the Industrial Disputes Act, 1947 (“ID Act”) and ascertained that after coming into force of Sales Promotion Employees (Conditions of Service) Act, 1976, medical representatives would be deemed to be workmen as per the provisions of ID Act. In the instant case, a workman, who was initially appointed as a clerk in Nicholas Piramal India Limited was subsequently appointed as a medical representative. The workman was alleged to be involved in certain acts of misconduct after which his employment was terminated. The workman filed a complaint before the Labour Court, Lucknow, challenging his termination. Since the allegations were not proven, the Labour Court set aside the termination of the workman and ordered reinstatement with consequential benefits. On appeal, the Allahabad High Court also upheld the Labour Court’s decision. While hearing the appeal, the Allahabad High Court emphasised that as per the Sales Promotion Employees (Conditions of Service) Act, 1976, ‘sales promotion employees’ include medical representatives and therefore, are deemed to be ‘workmen’ as per the ID Act.10
The United States regulator conducts inspection on Indian drugmakers
In December 2023, the United States regulatory agency, Food and Drug Administration, (“FDA”) conducted a series of inspections in three leading Indian drug manufacturing companies, i.e., Dr. Reddy’s Laboratories, Laurus Synthesis and Torrent Pharmaceuticals. The FDA’s observations included various violations of the United States’ Food, Drug, and Cosmetic Act committed by these drug manufacturing companies. Subsequently, Form FDA 483 was issued by the FDA to all three companies (typically issued after conclusion of an inspection when an investigator has observed any conditions that in its judgment may constitute violation).11 During the inspection on Dr. Reddy’s Laboratories, FDA found deficient record-keeping procedures of data collected during drug testing, a lack of detailed control procedures used to review technical data, lack of employee training. During inspections on Torrent Pharmaceuticals, the FDA noted batch discrepancies, the quality unit also lacked any written responsibility and procedure for formulation operations, and a lack of general hygiene in the unit. Lastly, Laurus Synthesis was remanded for not adequately conducting investigations of unexpected occurrences, inadequate sampling plans for intermediaries, and not maintaining, cleaning, and storing equipment in a way to prevent contamination.12
Doctors to mention reasons while prescribing antibiotics
The Health Ministry has issued a warning, asking the doctors to mandatorily mention the indication, reason and justification while prescribing antibiotics. The pharmacists have also been directed to implement Schedule H and H1 of the Drugs Rules and sell antibiotics only on valid prescriptions.13
New guidelines issued for intensive care unit admission and discharge criteria
The Health Ministry has introduced guidelines for regulating the admission and discharge criteria for intensive care units (“ICU Guidelines”)14 for hospitals to decide the need of admitting a patient for treatment under the intensive care unit (“ICU”). The ICU Guidelines have been compiled by a panel of 24 doctors with expertise in critical care medicine. Altered level of consciousness of recent onset, hemodynamic instability, need for respiratory support, patients with acute illnesses requiring intensive monitoring and/or organ support or any medical condition or disease with anticipation of deterioration have been listed as criteria for ICU admission. Patients who have experienced any major intraoperative complication like cardiovascular or respiratory instability or have undergone major surgery also feature among the criteria. According to the ICU Guidelines, blood pressure, pulse rate, respiratory rate, breathing pattern, heart rate, oxygen saturation, urine output and neurological status among other parameters should be monitored in a patient awaiting an ICU bed. The ICU Guidelines also include discharge criteria such as return of physiological aberrations to near-normal or baseline status, reasonable resolution and stability of the acute illness that necessitated ICU admission, patient/family agreeing for ICU discharge for a treatment-limiting decision, or palliative care.15
MAJOR DEALS IN INDIA IN THE PHARMA AND HEALTHCARE INDUSTRY
The following are the key deals announced during the months of December 2023 and January 2024, in the pharma and healthcare industry.16
Sun Pharma Industries (“Sun Pharma”)
proposes to acquire remaining 21.5% stake in Taro Pharmaceutical Industries, a key player in the generic dermatology market, for INR 2,892 Crores. As per the definitive agreement, Sun Pharma will pay a cash consideration of USD 43 per share. The acquisition is expected to be completed by the first half of 2024, post which, Taro will become a wholly owned subsidiary of Sun Pharma.17
Coya Therapeutics (“Coya”), a US-based company has signed an exclusive licensing deal with Dr. Reddy’s Laboratories to develop and commercialise COYA302 for the treatment of amyotrophic lateral sclerosis (“ALS”).18 Coya has granted Dr. Reddy’s Laboratories an exclusive licence to commercialise COYA 302 in the US, Canada, the European Union, and the UK for ALS. Coya retains the right to commercialise COYA 302 in Japan, Mexico, and South America.
JB Chemicals & Pharmaceuticals (“JB Chemicals”) has agreed to acquire around 15 ophthalmology drugs from Novartis, the Swiss based pharma company for INR 964 Crores. The acquisition will take effect from January 2027. JB Chemicals has agreed to pay INR 125 Crores to Novartis to license the same drug portfolio for the Indian market. Over the next 3 years, during the duration of the in-licensing agreement, Novartis will continue the manufacturing of the drugs, while JB Chemicals will focus on marketing and selling the products.19 Takeda Biopharmaceuticals, the Indian unit of Japan’s largest drugmaker has announced the execution of a 3-year memorandum of understanding with the Biotechnology Industry Research Assistance Council (“BIRAC”), a public sector enterprise set up by the Department of Biotechnology, Government of India during the Global Bio-India (“GBI”) 2023 event. This partnership is to primarily support and encourage innovation in the healthcare market to incentivise the domestic entrepreneurial healthcare industries.20
Chrys Capital, a Delhi based private equity fund plans to acquire a minority stake in Delhi’s Centre for Sight, valuing the eye hospitals chain at INR 1,600 Crores. Chrys Capital’s investment will give an exit to Mahindra Partners, the private equity arm of Mahindra & Mahindra, which owns about 32% stake in the chain.21
Sun Pharma has agreed to acquire about 16.7% in Massachusetts-based Lyndra Therapeutics Inc, engaged in developing novel delivery technology for long-acting oral (LAO) therapies, for USD 30 Million (INR 249 Crores). The acquisition is a strategic investment to support the development of innovative pharmaceutical delivery technologies and get access to the technology for certain molecules and territories.22