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Compulsory Licensing Risks Quashing Patent Cause

Monday, April 30, 2012

Gajanan Khergamker is a media-legal expert

When India grappled with Bayer’s monopoly on a patented cancer drug and licensed a much cheaper generic through compulsory licensing, for the very first time, it was aimed to further public interest. That it also defeated the very raison d’être of patents itself and placed at risk the future of research and treatment was sadly overlooked.

India claimed that its decision to allow drug manufacturers produce and sell copies of patented drugs under its compulsory licensing norms was consistent with the trade-related aspects of intellectual property rights (TRIPS), a World Trade Organisation agreement of which India is a signatory.

Natco Pharma Ltd was recently granted a license to make and sell a copy of Bayer Healthcare AG’s cancer drug Nexavar after determining that the life-saving drug was not available at a reasonably affordable price. The move could well irk Western pharmaceuticals and the kidney and liver cancer treatment Sorefinib is perceived as placed within reach of thousands of cancer patients but the reality may well be different.

By law, the patents office can force companies grant licenses to generics in cases of public emergency or where they can show patented products are priced out of reach. The Indian generics industry is worth a whopping $26 billion and is charged by Western pharmaceutical companies with ‘overstepping intellectual property rights.”

Somewhere, sadly, in the jingoism associated with moves such as these, the real issues remain unaddressed. For one, access and affordability are two completely different issues. Consider this: Today, more two-thirds of India’s population does not have access to modern healthcare facilities forget medicines. The provision of low-cost medicines by the generics industry does not address issues such as lack of diagnosis, healthcare infrastructure and inadequate distribution that stall the process of medical treatment for the poor. Well-trained healthcare personnel, sound infrastructure, social acceptability, accessibility and quality of medical care all go on to play pivotal roles in the process of making medicines available.

What needs to be addressed are underlying issues of access to medicines and healthcare. It is perceived that such licenses issued would discourage investment in new medicines for patients and stall medical progress for those suffering from diseases without adequate or effective treatments. The compulsory license is seen as eroding intellectual property rights and stifling innovation to the long-term detriment of Indian consumers.

Why, World Health Organisation maintains that even the drugs that are off patents are affordable to only 20 per cent of the population. Overall, less than one per cent of all drugs available in India are patented. The issue overlooks the fact that compulsory licensing not only endangers the business model of research-based pharmaceutical companies but the very existence of pharmaceutical research in general.

The whole idea of granting patent holders a limited period of marketing exclusivity is aimed to enable them not just recover costs associated with the research and development of new medicines but also finance the research and development of future treatments. Tampering with the patent system is fraught with the risk of compromising with new treatment options.

By nature, a pharmaceutical company just cannot compete fiscally with a generics manufacturer. The cost of manufacturing a medicine for a generics manufacturer that excludes the substantial costs of R&D and of clinical trials, will inevitably be lower than for a pharmaceutical company is force to bear all these expenses and the risks associated with them.

Industry sources maintain that just five out of 5,000 experimental compounds in development reach clinical trials, and only one of those five will finally make it to the market. So, effectively, behind every successful compound there are thousands which fail in projects that have to be researched and funded. Compulsory licensing directly affects revenue that funds the research of new medicines.

World Health Organisation maintains that even the drugs that are off patents are affordable to only 20 per cent of the population. Overall, less than one per cent of all drugs available in India are patented.

Gajanan Khergamker can be contacted at [email protected]

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