New Delhi: In what appears to be a response to growing criticism of drug companies globally over patents, German drug maker Boehringer Ingelheim GmbH has decided not to enforce patents on its anti-HIV drug, Nevirapine, in 78 low-income African and Asian countries, including India.
Industry watchers see the move as an olive branch, if not a savvy public relations exercise, even as the entire industry has been under mounting pressure, with public health groups rallying against them, local patent authorities refusing to recognize patents and some governments, such as Thailand and Brazil, overruling patents on key AIDS and heart drugs.
Even in India, patent disputes are growing, most noticeably a very high-profile dispute between Novartis AG and the Indian patent authority over Glivec. While India hasn’t gone the route of Brazil or Thailand, both of which have simply bypassed patents, Indian health and family welfare minister Anbumani Ramadoss had hinted that the Novartis litigation might also force the country to go the route of “compulsory licensing.”
In a statement on its website, Boehringer says it will issue “short, non-assert declarations”, or licences, to any generic producer that has been pre-qualified by the World Health Organization for supplying Nevirapine to these 78 countries.
“These agreements, which practically mean that patents on Nevirapine will not be enforced by Boehringer Ingelheim in developing countries, are free of licence fees or other charges,” the company said (See full statement at www.livemint.com/Boehringer.htm)
The drug, sold as Viramune, generated sales of about $371 million (Rs1,521 crore) in 2006, and is a part of first-line therapy, used to prevent mother-to-child transmission of HIV. Boehringer reported sales of €10.6 billion (Rs43,460 crore) in 2006.
“Financially, it does not mean a lot to them, but the goodwill from governments and patients may make up for it,” said PriceWaterhouseCoopers’ associate director, Sujay Shetty.
“Also, this just takes the wind out of the arguments put up by generic makers,” says Nitin Aggarwal, analyst with Mumbai-based equity firm SSKI Securities Pvt. Ltd.
Five Indian drug makers— Ranbaxy Laboratories Ltd, Cipla Ltd, Aurobindo Pharmaceuticals Ltd, Hetero Drugs Ltd and Strides Arcolab Ltd—are currently WHO-pre-qualified and potentially stand to gain if they end up making copies of the drug. AIDS afflicts globally 45 million people across the world and 90% of them are in developing countries.
The list of 78 countries for Nevirapine, sent in an email response to Mint by Boehinger, includes India, Pakistan, Afghanistan, Bangladesh and almost every African country, but doesn’t include the bigger markets such as Brazil and China. “The list was drawn up as per the WHO classification of low-income countries,” said Julia Meyer-Kleinmann, a spokeswoman for Boehringer. Asked if the company’s move was in response to recent criticism of drug companies, she said that wasn’t the reason behind the company’s move.
Aurobindo’s director Srinivas Lanka says that unless the US and European markets are included in the Boehringer list, it is of little benefit to generic companies. Some $300 million of Nevirapine is sold in the US and Europe with the remaining revenue coming from all other countries, he says.
In its statement, Boehringer says it will also offer Viramune at a concessional price $0.60 in these 78 countries and at $1.20 to another 67 middle-income countries in South and Central American and Eastern European countries. The price is more than 90% lower than that in developed countries.
“Preferential pricing is the only way to meet the conflicting needs in the fight against AIDS: To refinance high research and development costs for new treatments…(to) offer affordable medicines to patients in poor countries that otherwise cannot afford antiretroviral medication,” writes Alessandro Banchi, chairman of Boehringer, in the company’s web statement.
Not everyone is impressed. “It is just a token gesture. The company can make any statement as it is anyway not selling the drug in a big way in these countries. They have come under pressure because of their monopolistically high prices, which low-income countries can’t afford,” says Cipla chairman Yusuf Hameid.
Leena Menghaney of Midecins Sans Frontieres, the large independent medical aid agency, maintains the drug should never have been patented anywhere as it was a case of “evergreening”, or securing new patents on what she considers as incremental or frivolous innovation. “Boehringer’s offer should cover all those countries that are in need of this drug and where it has patents, not merely these 78 low-income countries,” she said.
She noted that there were filings opposing the Boehringer patents pending before the patent office and filed by the Indian Network of People Living with HIV/AIDS and Positive Women’s Network.
Other drug companies have made somewhat similar concessions. For instance, US-based Gilead Sciences Inc. too had extended support to generic makers of its anti-AIDS drug, Tenofovir, and gave out manufacturing and marketing licences to 11 Indian companies.
The licensees can sell the drug in 95 Asian and African countries but for a royalty of 5%. Ranbaxy, Matrix Laboratories Ltd, Alkem Laboratories Ltd, Aurobindo, Emcure Pharmaceuticals, Hetero and Strides Arcolab are some of the licensees.
Menghaney says that offer isn’t “a complete offer either. The list doesn’t include important countries such as China and Brazil. Moreover, Gilead has imposed restrictions on exports of formulations as well as bulk drugs. So, a Hetero, Matrix Laboratories and an Aurobindo can’t even supply the bulk raw material in case Brazil issues a compulsory licence,” she says, noting that the hands of Indian companies are tied as part of that arrangement.
Brazil had broken the patent of Merck’s HIV drug, Stocrin, after its price negotiations with New Jersey, US-based drug maker, fell through early this month.
While Merck was willing to offer a 30% discount on its $1.59 per pill price tag, Brazilian government wanted it at $.065 per pill, the rate at which Merck is supplying the drug in Thailand. The medicine will now be shipped from India at $0.45 per pill. The Thai government has already bypassed patents in two AIDS drugs— Merck’s Stocrin (efavirenz) and Abbott Laboratories Ltd’s Kaletra and one heart drug, Plavix by Sanofi-Aventis SA.
C.R. Sukumar in Hyderabad contributed to this story.