Govt seeks views on pricing patented drugs

Institutions involved in discussions include commerce ministry, DIPP, health ministry, department of pharmaceuticals and the national pharmaceutical pricing authority


The department of industrial policies and promotion may explore whether there can be changes made to India’s patent law. Photo: Hemant Mishra/Mint
The department of industrial policies and promotion may explore whether there can be changes made to India’s patent law. Photo: Hemant Mishra/Mint

New Delhi: Upbraided by the parliamentary standing Committee for its “gross negligence and lackadaisical attitude”, the department of pharmaceuticals has set about seeking suggestions from different ministries on price regulation of patented drugs.

Under India’s patent law, compulsory licensing by the government for patents awarded to drugs can be done only under certain cases of public health emergencies. The department of industrial policies and promotion (DIPP), under whose aegis the law falls, may explore whether there can be changes made to the law.

Compulsory licensing allows the government, through third parties, to produce and market a patented product or process without the consent of the patent owner. The caveat in the patent law exists in order to check monopolistic practices in public health.

Two officials in the know confirmed the development.

The government institutions involved in the discussions are the commerce ministry, DIPP, the health ministry, department of pharmaceuticals and the national pharmaceutical pricing authority.

“While the commerce ministry is of the opinion that we should look at introducing a reasonable upper ceiling on certain patented drugs, it may prove to be very difficult because of limiting factors. It’s unclear what the recommendations may be at this stage,” said one of the two officials.

One of the limiting factors is that currently price regulations of patented drugs are the exception and not the norm. Only one compulsory licence has been issued till date in India—to domestic generic drug maker Natco for Bayer AG’s anti-cancer drug Nexavar—which resulted in a 97% price reduction.

As per the provisions of compulsory licensing under the Indian Patents Act, the central government can only exercise its power “under circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use”.

Additionally, any move to introduce price regulations on patented drugs could simultaneously dilute the provision that seeks to award compulsory licensing in case “a patented invention is not available to the public at a reasonably affordable price”.

“The department of pharmaceuticals has been asked to come up with recommendations, keeping in mind the World Trade Organization’s (WTO’s) agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and the Doha agreement,” said the second official.

The WTO’s TRIPS pact essentially incorporates the minimum standards of intellectual property rights that all WTO members, including India, are expected to incorporate in their laws.

However, the right to issue compulsory licences on any grounds to protect public health is any country’s sovereign right—a matter that was agreed upon and signed by all WTO members under the Doha Agreement.

Questions emailed to the commerce ministry did not elicit any response at the time of going to press.

“Since the issues are under consideration of the committee, it will not be possible at this stage to comment upon (the questions),” said Sudhansh Pant, joint secretary at the department of pharmaceuticals.

In August, the parliamentary standing committee on government assurances strongly criticized the department of pharmaceuticals’ efforts to recommend measures to regulate the prices of life-saving patented drugs.

The department took more than six years to publish a report that essentially recommended increasing the number of people under insurance cover and for the ceiling prices of patented drugs to be fixed by referring them to a select group of developed countries—a move that would have increased the prices significantly.

“It is highly questionable as to why the ministry allowed that committee to submit its report in the matter after five years in 2012 that, too, without unanimity if not for gross negligence and lackadaisical attitude or vested interest. Evidently, the ministry lacked will in this regard and did not pursue the matter in the right earnest,” the report said.

The recommendations of the new report being prepared were expected to be released early September but have been delayed.

“Another impediment to price negotiations of patented drugs could be the PM’s pet campaigns of Make In India and increasing the ease of doing business. Any move to regulate patented drug prices will create a sense of unease and a possible backlash,” said the first person cited above.

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