Mumbai - India's move to strip German drugmaker Bayer of its
exclusive rights to a cancer drug has set a precedent that could extend to
other treatments, including modern HIV/Aids drugs, in a major blow to global
pharmaceutical firms, experts say.
On Monday, the Indian Patent Office effectively ended
Bayer's monopoly for its Nexavar drug and issued its first-ever compulsory
licence allowing local generic maker Natco Pharma to make and sell the drug
cheaply in India.
It is only the second time a nation has issued a compulsory
licence for a cancer drug after Thailand did so on four drugs between 2006 and
2008, also on affordability grounds. Thailand also issued licences for HIV/Aids
and heart disease treatments.
"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 new wording is seen as a lower threshold for compulsory
licences, which can be issued under world trade rules by nations that deem
major life-saving drugs to be too costly. The licences allow them to authorise
the local manufacture or importation of much cheaper, generic versions.
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 licences in the future.
India has one of the world's fastest-growing rates of HIV
and heart disease is also the country's biggest killer, but widespread poverty
in Asia's third-largest economy makes many non-generic drugs unaffordable for
millions.
Currently, Pfizer and GlaxoSmithKline sell a modern HIV/AIDS
drug known as Selzentry through their joint venture firm ViiV Healthcare. The
treatment costs more than 60 000 rupees ($1 200) for one month's dosage in India.
Bayer's Nexavar cancer drug costs around $5 500 a month in
India, making it "not available to the public at a reasonably affordable
price", the patent office ruled. About 40% of Indians live below the
poverty line, government data shows.
A provision of the Indian Patents Act allows for a
compulsory licence to be awarded after three years of the grant of patent on
drugs that are deemed to be too costly.
More to come?
Other patent rulings are imminent. A long-running case
involving the granting of an Indian patent for Swiss drugmaker Novartis' cancer
drug Glivec is expected to be heard in the country's supreme court this month.
The case does not involve the issue of a compulsory licence,
but it has pitted advocates of free trade and intellectual property rights
against pro-generics campaigners who say a ruling in favour of Novartis could
see other drugs in India priced outside the reach of most of the population.
"This (Bayer) case might become a trendsetter, wherein
generic players can make copies of patented products," said Siddhant
Khandekar, analyst at ICICI Direct.
"While global giants might not like this, generic
companies will benefit along with common people," he said, adding that the
cancer treatment market in India was worth up to 30 billion rupees ($600m).
The Bayer case underscores the still fractious relationship
between global pharmaceutical firms and India. Companies like Pfizer,
GlaxoSmithKline and Novartis are eyeing India and other emerging markets,
notably China, as a growth opportunity but worry about property protection in a
country that is also a leading source of cheap copycat medicines.
"Big Pharma" has recently struck some alliances
with Indian drugmakers to tap into their generics expertise, but these have
also not always run smoothly, with Pfizer on Tuesday scrapping a partnership
with India's Biocon.
In cancer treatments, India's Cipla, which has the
second-largest share of the local drugs market, may also benefit from the Bayer
case. Cipla is fighting a Bayer suit for patent infringement after the Indian
drugmaker launched a generic version of Nexavar in India in April 2010.
Bayer considers options
Natco's finance chief Baskara Narayana told Reuters that
sales of the generic version of Nexavar, whose chemical name is sorafenib, were
expected to be about 250 million to 300 million rupees ($5-6m) a year once it
is launched.
Bayer, which developed Nexavar with US biotech firm Onyx
Pharmaceuticals, said it was evaluating its options.
"We are disappointed by the decision of the Patent
Controller in India to grant a compulsory licence for Nexavar," Bayer said
in a statement.
Tapan Ray, director general of the Organisation of
Pharmaceutical Producers of India, an industry group of multinational drugmakers,
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," Ray said.
Pfizer has questioned the issue of affordability, saying
many Indians are well off and can afford Western medicines.
"There is huge wealth in India," Pfizer CEO Ian
Read told Reuters in London on Monday. "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."
But groups that campaign for cheap access to drugs in poor
countries have welcomed the Bayer ruling.
Medecins Sans Frontieres said the ruling means that new
medicines in India 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," said Patel. "Compulsory licensing will make them available
at one-fourth or one-fifth of the price, which is good."