DIPP does well to caution on compulsory licences
Given India’s dysfunctional pharmaceutical policies, it is not surprising the US has India on its IPR watch list. While US firms have a problem with India’s Patent Act, the Act is in conformity with WTO norms if the US takes India to the WTO’s Dispute Settlement Board. The Act prevents frivolous patenting and is quite strict in terms of issuing patents only to new and novel discoveries; given how many big pharma firms try to evergreen patents, this is a good provision.
Various other controls only serve to aggravate tensions between the government and pharmaceutical firms, and not just those based in the US. Apart from arbitrary price controls over large parts of the industry, there is a ceiling on how much prices can be raised each year for the entire industry. Equally problematic is the issue of compulsory licences. The provision seemed appropriate when it was introduced as it was seen as an emergency provision, to be used in the case of, say, an Ebola outbreak. If, the philosophy was, a patent-holder did not either produce enough of the medicines or priced it too high during an epidemic, a compulsory licence could be issued—this would allow a third party to produce the drug at a pre-negotiated price and in sufficient quantities. But India has not applied this national emergency clause while issuing compulsory licences. In the case of Bayer’s kidney and liver cancer drug Nexavar, though the number of affected persons ran into a few thousand, Natco Pharma was issued a compulsory licence. The better alternative would have been for the government to negotiate a lower rate with Bayer, or even subsidise the cost of the medicine if it deemed fit.
This is where the department of industrial policy and promotion (DIPP) is doing a good job, as FE reported last week, in asking the health ministry to go slow on compulsory licensing. In the case of US-based Bristol-Myers Squibb’s celebrated anti-leukaemia drug Dasatinib and Swiss-firm Roche’s breast-cancer drug, DIPP has asked the health ministry to let it know how many people are affected by the diseases and how that qualifies as a national emergency or epidemic. It is high time others in the government such as the National Pharmaceutical Pricing Authority realised that their high-handedness is hurting Indian patients since cutting-edge drugs that cost billions of dollars will never be produced or marketed in India once innovators feel they are getting the short end of the stick.