[Ip-health] The Hindu Business Line: Testing the mettle of drug-makers

Thirukumaran Balasubramaniam thiru at keionline.org
Wed Dec 26 09:04:05 PST 2012


http://www.thehindubusinessline.com/companies/testing-the-mettle-of-drugmakers/article4238425.ece

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Testing the mettle of drug-makers

P. T. JYOTHI DATTA


December 25, 2012:  
If there is a single defining factor in the last 12 months in the pharmaceutical industry, it has to be the attention coming back, even if just a bit, to public health.

This is reflected in the several patent-related cases that are in various stages of hearings or judgements at various courts in the country. It is also seen in the Government’s new drug policy that promises to bring down medicine prices.

In fact, keeping its handle on the strategic sector, the Centre also addressed concerns emerging from the string of acquisitions of Indian drug-makers or their businesses by foreign companies in recent years. The apprehension was that local buy-outs could increase medicine prices and reduce access in the years to come. After much deliberation, the year saw the Government identifying the Foreign Investment Promotion Board as the gate-keeper to vet buy-outs of existing pharma businesses. So, despite ongoing debates on drug prices or pharma acquisitions, consumers can take some comfort that the year ahead will see public-health policies play out.

JUDGEMENTS GALORE

In 2012, India took a huge leap when the patent office issued the country’s first compulsory licence to Natco, allowing it to make Bayer’s advanced kidney drug Nexavar for a royalty. The tectonic decision indicated that the Government would stick its neck out for public health. The case has subsequently gone into an appeal to the Intellectual Property Appellate Board.

But as 2013 gets underway, a significant judgement is expected on Novartis cancer drug Glivec. The patent application on the drug had been rejected in 2006, and since then Glivec has traversed a wide legal canvas.

With final hearings complete in December, a judgement is awaited from the Supreme Court. The final order will be a benchmark, as it brings greater clarity on the interpretation and implementation of the amended Indian Patents Act.

Amended in 2005, the legal framework now protects product patents. So innovators can get 20-year protection on their products. But this worries public-health workers, as protection on innovative medicines could price them out of the reach of patients.

Being the first in the amended-patent regime, the Glivec battle had also thrown up issues on medicine prices. When the legal battle began, Glivec was priced at about Rs 1 lakh a month, while the generically similar versions were priced at about Rs 10,000.

In fact, there are several similar patent battles lined up for 2013, including Cipla and Roche’s battle over lung-cancer drug erlotinib; Cipla and Pfizer over the latter’s liver-and-kidney-cancer drug Sutent; and Roche and Sankalp (an NGO) over hepatitis C drug pegylated interferon. Patents are a complex subject even in advanced economies, and India has seen multiple decisions in this context. What is coming through is that the country is taking decisions that are seen to be good for its public, observes Muralidharan Nair, Partner with Ernst & Young. Innovation has to be protected, but the purpose of these products is to benefit people, and that “contextualisation of the pricing of patent products” is getting defined, he observes.

POLICY PROMISES

The new drug policy too is expected to take a final shape early next year, under the watch of the apex court. All 348 drugs on the National List of Essential Medicines will now be under price control, impacting about 30 per cent of the industry. While all differences between the pharma industry and pro-health groups have not been entirely ironed out, this seems to be the closest the Government has got to actually having a new policy in place.

But for the estimated Rs 1.2-lakh crore pharmaceutical industry, growth would be difficult next year because of price control, says Ranjit Kapadia, Centrum Broking’s Senior Vice-President. This year’s domestic growth at about 14 per cent growth could dip to about 8-9 percent, he forecasts. Domestic and export revenues contribute equally to the total pharma revenue. But with global markets in Europe and the US not looking up, industry-watchers expect local acquisitions by foreign companies to continue, as emerging markets provide the growth.

That being the landscape, drug companies will be walking a tightrope next year and their mettle will be tested.

jyothi.datta at thehindu.co.in


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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)

thiru at keionline.org



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