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Biotechnology sector worried over compulsory licence

BS Reporter  |  Chennai/ Bangalore 

The Association of Biotechnology-Led Enterprises — ABLE — has said India should always keep in mind that a compulsory licence should not be invoked in an arbitrary manner as it will undermine the efforts of the industry and consequently, any investment in this sector. The body believes that Compulsory Licences should be used only when there is a national health crisis or when lifesaving drugs are priced out of reach of a common man, ie, under some exceptional circumstances.

“The sovereign government of any country would be obliged to provide healthcare for all its citizens. Most of the time, a government invokes this only if drug companies do not consider purchasing power parity and per capita income of a country when they do a pricing strategy.

In this case, Bayer has submitted before the Controller of Patents a cost of Rs 2,80,000 a month as against Rs 8,800 by Natco. Most multinational and Indian pharma companies spend millions of dollars and many manhours to save patients from life threatening diseases and, therefore, the intent of all these companies broadly is to alleviate suffering of people, ABLE said.

It added, “However, several times, overseas companies price their drug based on who they think can purchase and do not take into account the millions who could be deprived of a treatment due to affordability. Governments are likely to interfere under such circumstances like when a few countries have invoked this provision for making available lifesaving HIV drugs to its people.”

“Sorafenib (Nexavar) in 2009 was not approved by NICE for NHS use, in view of the fact that it increased survival in primary liver cancer by only 6 months. This is an orphan drug in the US and generally such drugs are developed with generous support of the government. While on pricing it is obvious that there is a case on the overall utility of this drug, which prolongs life by half a year the question is why should India invoke compulsory licensing in the case of Nexavar,” ABLE questioned.

NICE or the National Institute for Health and Clinical Excellence is a special health authority of the English National Health Service. It added this was a question that would come up for considerable debate as to whether it is really a true lifesaving classification.

“In future before such rulings are invoked it might be a good idea to debate on the cost of goods versus the cost of innovation. If we put in mechanisms to compensate the companies, which do innovation, then the severity of such rulings will be quite considerably mitigated. At a time when the Indian government has declared this as the Decade of Innovation, ABLE is concerned that the momentum and global image of India’s focus on innovation is not adversely affected by the ruling,” it added.

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First Published: Fri, March 16 2012. 00:27 IST