The Natco test

The Natco test
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First Published: Wed, Jan 30 2008. 11 46 PM IST

(Illustration: Jayachandran/Mint)
(Illustration: Jayachandran/Mint)
Updated: Wed, Jan 30 2008. 11 46 PM IST
Natco Pharma’s filings for compulsory licences to produce cheaper versions of the patented cancer drugs Sutent and Tarceva will intensify an important debate —on the use of flexibilities in international patent agreements to deal with the problem of monopoly pricing.
(Illustration: Jayachandran/Mint)
Indian generic companies will, of course, be keenly observing the signals from this testing of waters by Natco, as it could open up a big opportunity for them. But more importantly, the issue is of enabling wider affordable access for the poor in many countries, as India is a leading producer of generic drugs.
Of course, the instant cases would have to be decided based on medical and economic and legal merit. But while compulsory licensing is a legally acceptable option— when the stake for ensuring affordable access to life-saving drugs is sufficiently large—it is a politically tough decision. We hope the latest event will enhance the debate on how our patent laws are best interpreted. And will build the case for transparency in the evaluation of patent filings.
So far, India has not “broken any patents” through a compulsory licence. However, should it decide to do this, it would be within its rights. This is a legal flexibility available under WTO’s Trade Related Intellectual property rights (TRIPS) agreement.
Despite this, developing countries using this flexibility, have faced intense opposition from patent-owning pharmaceutical companies. These companies have often been supported by their home country governments in the developed world. Indeed, there has been subtle pressure in the past by countries such as the US during bilateral trade negotiations to discourage the use of this provision.
It was a little more than one year ago that Thailand issued compulsory licences for domestic production and import of cheaper alternatives for three HIV/AIDS drugs—including the US-based Abbott Laboratories’ Kaletra, and Merck’s drug Efavirenz. And last year, Brazil followed suit for?Efavirenz after negotiations with Merck to lower prices did not secure it discount that it felt was justified. Indonesia, too, later used this option.
Thailand, in particular, was much criticized for its lack of respect for intellectual property. Though, of course, none of this criticism could be as easily targeted at Canada, which issued a compulsory licence to domestic company Apotex for export of GSK’s antiretroviral drug, TriAvir, to Rwanda.
What makes the Indian case stand out is that the examples above deal with HIV/AIDS —what has already been accepted as a public health crisis in many countries. And Natco seems to be testing the waters on a theoretically feasible option for a cancer drug. Meanwhile, another domestic company Cipla has launched its version of Tarceva in a move that will be intensely fought by Roche, the company that holds the rights (originally granted to Pfizer) here. Now, Natco’s experiment is geared for exporting to least developed countries—which have either not yet had to enforce patent laws, or don’t have the capacity for domestic production. It, ironically, can’t apply for domestic sales, since Indian patent laws stipulate a three-year wait from the time of grant of patent—and Tarceva got it only last year.
Now, if, a patient in, say Nepal, can buy the drug from Natco at a fourth of Roche’s price, why can’t a patient with comparable income in India? The answer lies in the politics of it all. If the lucrative market for cancer drugs is broken into today, tomorrow it could be heart disease or diabetes. Would the Indian government be able to face the expected high international pressure in the event of a licence filing for domestic sales?
Given how non-transparent the process for opposing patents in the country still is, a compulsory licence might well be the option that patient groups and civil society will build a case for. Some would be well-supported by law. This space is worth watching.
How is Natco’s move important for India? Write to us at views@livemint.com
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First Published: Wed, Jan 30 2008. 11 46 PM IST
More Topics: Intellectual Property | TRIPS | Licensing | HIV | AIDS |