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Last updated on April 19, 2014 at 9:20 EDT

India Ruling May Mean Cheaper Drugs

March 13, 2012

India´s government ended Bayer´s monopoly on a patented cancer drug on Monday, and has permitted a local pharmaceutical to manufacturer a less expensive generic version of the drug under a new law aimed at keeping costs affordable.

The government allowed Natco Pharma to make and sell Nexavar, a kidney and liver cancer treatment drug that Bayer Corp. had been selling in India for about $5,600 per month, to Indian residents for $176 for a 120-tablet pack.

Bayer´s patent on Nexavar was not up until 2020, making it “not available to the public at a reasonably affordable price,” according to the patent office. However, India invoked a trade rule allowing generic production of the drug.

This marks only the second time a country has issued a compulsory license for a cancer drug. The first was in Thailand, when it issued a license on four drugs between 2006 and 2008, on grounds of affordability.

“This could well be the first of many compulsory rulings here,” said Gopakumar G. Nair, head of patent law firm Gopakumar Nair Associates and former president of the Indian Drug Manufacturers´ Association. “Global pharmaceutical manufacturers are likely to be worried as a result … given that the wording in India’s Patent Act that had been amended from ℠reasonably priced´ to ℠reasonably affordable priced´ has come into play now.”

The wording is seen as a lower threshold for compulsory licenses, which can be issued under world trade rules by nations that deem major life-saving drugs too costly. The licenses allow them to authorize local manufacture of cheaper generic versions.

Under the rule, Natco Pharma is required to pay Bayer Corp. 6 percent of earnings from Nexavar.

Sabina Cusimano, a spokeswoman for Bayer, told The Associated Press that the company is “disappointed about this decision.” She said the company was considering a legal challenge to the decision. “We will see if we can further defend our intellectual property rights in India.”

A spokesman for Natco said the cheaper version of the drug would help about 8,800 kidney and liver cancer patients in India.

“This is a victory for Indian patients and for India’s generic manufacturers, which are under attack,” said Madineedi Adinarayana, general manager of Natco Pharma.

Many drug makers are set to lose patent protection on their best-selling products, which will open up the market to cheaper versions of the drugs made in countries such as India and China.

Global drugmakers see emerging markets such as India as key growth opportunities, but remain concerned over intellectual property protection. Nair said HIV-related medicines were likely to be the most at risk by compulsory licenses in the future.

India has one of the world´s fastest-growing rates of HIV and heart disease is the country´s biggest killer. Widespread poverty in India makes many non-generic drugs unavailable for millions of its citizens.

Modern non-generic HIV drugs currently sold in India by Pfizer and GlaxoSmithKline sell for as much as $1,200 a month.

The Bayer case has struck a chord with Western pharmaceutical companies that have been pushing for stronger patent protections and rules to shut down the $26 billion Indian generics industry that is overstepping intellectual property boundaries.

There are rules, however, that keep generic drugmakers from pushing out cheap knockoffs of high-price brands. A patent must be at least 3 years old before a generics company can apply for a compulsory license. But many Indian companies have been reluctant to pursue compulsory licenses for fear they may jeopardize agreements to manufacture other drugs for wealthy Western drug companies.

Tapan Ray, director general of the Organization of Pharmaceutical Producers of India, said the Bayer ruling was disappointing. “The solution to helping patients with innovative medicines does not lie in breaking patents or denying patent rights to the innovators.”

Pfizer questioned the ruling as well, saying that many Indians are well off and can afford Western medicines.

“There is huge wealth in India,” Pfizer CEO Ian Read told Reuters. “There are maybe 100 million people in India who have wealth equivalent to or greater than the average European or American, who don´t pay for innovation. So this is going to have to be a discussion at some point.”

Medical humanitarian aid firm Medecins Sans Frontieres said the ruling means that new medicines in India that are still under patent, including some of the latest treatments for HIV/AIDS, could potentially have generic versions produced for a fraction of the cost.

“It´s a bold move by the government and it´s a good judgment … which will benefit people,” said Dara Patel, secretary general of the Indian Drug Manufacturers´ Association, an industry body of Indian companies. “Drugs to treat heart-related diseases and HIV are costly. Compulsory licensing will make them available at one-fourth or one-fifth of the price, which is good.”

Lawyers, generic drug makers and aid groups have warned that ongoing free-trade talks between India and the European Union are threatening India´s generics production with discussions about making it easier for giant pharmaceutical firms to sue India´s government and drug manufacturers over intellectual property protections.

And a clause the EU has suggested to ensure nothing limits India´s ability to produce and export lifesaving medicines is not enough of a guarantee, they added.

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Source: RedOrbit Staff & Wire Reports