The Telegraph
Friday , March 7 , 2014
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Bid to address US drug patent worries

New Delhi, March 6: India and the US will discuss Washington’s fears that New Delhi’s compulsory licensing regime will affect the next-generation drugs on which US companies are banking on for future profits.

At present, a committee is reviewing patented drugs by MNCs to allow the manufacture of low-cost, generic versions of drugs for the treatment of life-threatening diseases such as cancer, diabetes, hepatitis and HIV, which require costly medication.

US assistant secretary of state Nisha Biswal said here today: “There’s a concern about whether next-generation drugs will be protected and how do you ensure that investments that are being made to develop more effective drugs can be continued.”

Biswal is in New Delhi to hold talks with her counterparts in the external affairs ministry on strategic issues as well as trade concerns.

India exports drugs worth about $20 billion. The US fears rising exports of high-value generics, which are in effect cheaper copies of drugs developed by MNCs, will eat into the profit and jobs back home.

The US Chamber of Commerce, backed by the US Pharmaceutical Research and Manufacturers of America, has already asked the United States Trade Representative to classify India as a Priority Foreign Country, a tag which is given to the worst offenders of patent rights. The only country on the list is Ukraine. The classification will result in stringent monitoring of India’s trade and practices on intellectual property rights.

However, Indian trade officials say the manufacture of generics in India is not hitting the profit margins of US companies. US drug exports to India have risen 500 per cent since 2000 compared with 250 per cent to the rest of the world. The average growth rate annually for US drug exports to India is about 18 per cent compared with 11 per cent for the rest of the world.

However, pharma analysts said the real worry was the future prospect of drugs, which has a market size of around $92 billion annually and are coming off-patent in the next three years. Drug companies want to retain control over this market by changing their molecular composition. Hence, India’s compulsory licensing regime, which seeks to lift the patent on drugs beyond their initial protection period, is a worry for these MNCs.

Two years back, India issued its first compulsory licence to domestic drug maker Natco Pharma on a kidney and liver cancer drug, Nexavar, patented by Germany’s Bayer AG, raising protests from multinational companies.

In December last year, media reports quoted Bayer’s chief executive Marijn Dekkers saying in a conference : “We did not develop this product (Nexavar) for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product. It is an expensive product, being an oncology product. But you know the risk in these situations is always spillover. If this generic Indian company is going to sell this product, then South Africa, and then New Zealand, you know, how this is going to spill over.”

The Bayer’s executive has since retracted the statement saying it “could not be more opposite to what I want and we do at Bayer”.