US to keep an eye on India's compulsory drug licensing move

Puts India on priority watch list, which means US trade body doubts India over intellectual property rights

The United States has taken a serious note of the developments that led India to issue the first compulsory licence to local company Natco Pharma to manufacture a low-cost version of German drug maker Bayer’s cancer drug Nexavar.

The annual issue of the United States Trade Representative (USTR), 2012 Special 301 Report, released last month, says, “The US would closely monitor developments concerning compulsory licensing of patents in India, following the broad interpretation of the law in a recent decision by the Controller General of Patents”.

The agency also said it would bear in mind the flexibilities related to intellectual property rights (IPR) allowed within the World Trade Organisation (WTO) framework while assessing the situation.

 

The Controller General of Patents, Designs and Trademarks had asked Bayer in March to grant a compulsory licence to Hyderabad-based Natco to sell a cheaper version of the patent-protected Nexavar to ensure patients have access to the potentially life-saving medicine. This allowed Natco to manufacture and sell Sorafenib at Rs 8,880 (for a month’s treatment), after paying a six per cent royalty on the net sales to Bayer on a quarterly basis. Bayer’s Nexavar costs Rs 284,428 for a month’s dose.

The compulsory licence is valid till the patent for Nexavar expires in 2021.

“The US commends India’s recognition of the importance of innovation as part of its efforts to promote domestic manufacturing, and urges India to resist imposing discriminatory policies or other counter-productive measures in pursuit of that objective, and at the expense of adequate and effective protection of intellectual property rights. The US will continue to work with India to address these and other issues”, the report said.

The report continues to place India in the “priority watch list”, which means USTR considers India has IPR deficiencies, which require attention. The agency reiterated its demand that India should provide an effective system for protecting against unfair commercial use, as well as unauthorised disclosure, of test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products.

Noting that India has shown some improvements with respect to IPR enforcement, including reports of good cooperation of enforcement officials with some in the copyright industry, and increased use of judicial orders that have strengthened enforcement against pirated movies and music online, the agency called for additional steps to improve coordination with enforcement officials of certain state governments within India.

"The United States also continues to encourage India to address its judicial inefficiencies and to strengthen criminal enforcement efforts, including by imposing deterrent-level sentences and giving IPR prosecutions greater priority", it said.

According to USTR, India made limited progress on IPR protection and enforcement in 2011, and the country’s legal framework and enforcement system remain weak.

“The US continues to encourage India to promote a stable and predictable patent system that can nurture domestic innovation, including by resolving concerns with respect to the prohibition on patents for certain chemical forms. The US recognises India’s recent efforts to address its patent-application backlog, and urges India to take additional steps in this regard. The US also urges India to continue to work to streamline its patent-opposition proceedings”, it stated.