eyeforpharma Barcelona

Mar 19, 2013 - Mar 21, 2013, Barcelona, Spain

Put the all-powerful customer at the centre.

India Considers Ending Compulsory Licensing Tactics

Following a cold war between the Indian government and Big Pharma which has lasted for months, if not years, there are now indications that India may be looking to revise its compulsory licensing tactics.



The industry is still reeling from the news that India plans to grant three more compulsory licenses, which will give generics firms the right to manufacture vastly cheaper versions of two of Roche’s drugs and one of Bristol Myers-Squibb’s. Now it has emerged that India is considering an end to the practice of issuing compulsory licenses, replacing them instead with price controls.

India’s Department of Pharmaceuticals (DOP) has issued a draft guidance that says once patented drugs come under proposed price controls, their cost should be considered reasonable and it should not be possible to issue a compulsory license based on affordability.

In the draft of its policy, the DOP stated that “once a government appointed committee goes for some form of price regulation of patented medicines and fixes a price of the medicines which is accepted by the government, this fixed price would be supposed to be reasonable and hence it won't be possible for the Government to use the tool of Compulsory License on the ground of reasonableness of the price of the patented medicine.” However, this does not represent a complete moratorium on compulsory licenses, as the government will still retain the power to issue them in cases where an essential drug is either unavailable or unaffordable to the general population.

Last year, India granted its first compulsory license to Natco Pharma to manufacture a generic version of Bayer’s kidney cancer medication, Nexavar, based on the unaffordability of the drug. Bayer had been selling Nexavar for $5,000 a month, while Natco brought down the price to only $170 a month for its generic version. Cipla also started manufacturing a generic form of the drug for $130 a month. Natco and other generics manufacturers have since indicated that they would be going after other big names, seeking more compulsory licenses.

This latest announcement by the DOP may stop them in their tracks, but even if their patents are safe, pharma companies that do business in India are heading for a big squeeze in profits. Public healthcare provision is expanding but so is the list of drugs under price controls. Previously only around 75 drugs were subject to these controls, but after India approved the National Pharmaceutical Pricing Policy last year that number has risen to 652; Western pharmacos will be the worst hit by this as their branded generics are usually more expensive than the local competition.

However, there have also been indications that all is not lost on the subcontinent. As recent reports show, many Western pharmacos are still eyeing India as a market with the potential for growth; GSK not long ago invested around Rs 5,215 crore ($941 million) into their Indian consumer healthcare operations, and a GBI report states that the Indian pharmaceutical market is expected to grow at a compound annual growth rate (CAGR) of 12% until at least 2015. What do you think – is it time for pharma to accept lower margins on their branded drugs in return for a higher market share in one of the largest and fastest growing of the pharmerging markets?



eyeforpharma Barcelona

Mar 19, 2013 - Mar 21, 2013, Barcelona, Spain

Put the all-powerful customer at the centre.