[Ip-health] Cipla reduces prices on cancer medicines

Baker, Brook b.baker at neu.edu
Thu May 3 08:48:20 PDT 2012

Cipla has announced price reductions for three cancer medicines as detailed below.  These reductions are responsive in part to the Natco compulsory license on a Bayer medicine, sorafenib, which Cipla was also producing, allegedly in violation of Bayer's patent (case pending).  It may very well be that Cipla is seeking a judicial compulsory license as has been granted previously in India and as in line with US precedent starting with the E-Bay case.

Cipla has dropped its price below the Natco price showing the advantages of CL-inspired competition and the impacts of manufacturing at more efficient economies of scale made possible by pricing at levels more affordable to poor- and middle-income patients in developing countries and by governments themselves.

There are indications that Big Pharma companies are also devising price discounting policies to try to forestall compulsory licenses based on abusive monopoly pricing that serves only a tiny fraction of the Indian market.  For example, Roche has already announced a strategy to lower its prices on cancer medicines shortly after the Natco ruling.  (Julia Kllewe, Roche to offer discounted cancer drugs in India, Guardian, 23 March 2012).  Roche is also planning to involve a local company, Emcure Pharmaceuticals, in the renaming and repackaging of the medicine in India, which might impact the manufacture-in-India provision relied on in part by the Indian Comptroller of Patents in the Natco/Bayer case.

In any event, these recent developments show the power of compulsory licenses to lower drug prices.  Many middle-income countries are delaying unnecessarily in utilizing their legal flexibility to issue compulsory licenses for needed medicines.  For example, Gilead and other companies negotiating with the Medicines Patent Pool are refusing to include middle-income countries in Latin America, Asia, North Africa, and Eastern Europe/Central Asia as licensed territories.  All these countries have the right to issue compulsory licenses on newer antiretrovirals medicines needed to treat the 9 million untreated people eligible for antiretroviral therapy and the many millions more who will soon need treatment, especially as treatment-as-prevention is rolled out.  If more countries were willing to amend their laws to maximize and simplify use of lawful IP flexibilities; if more countries would use those flexibilities; and especially if more countries would engage in coordinated campaigns with regional and Southern partners, millions of lives could be saved not only for those who are HIV-positive, but also for patients with heart disease, cancer, psychiatric disorders, diabetes, etc.

Business Line, The Hindu, Mumbai, May 3 , 2012
Cipla has dropped the prices on three of its key cancer medicines.
In a move that will stir up the pot, the company has significantly dropped its price on generic Sorafenib, used in advanced kidney cancer, from Rs 27,950 to the patient per month to Rs 6,840, an official familiar with the development said.
Kidney cancer
Sorafenib is the drug on which the Patent Office recently issued a compulsory license allowing Natco to make a generic copy of this drug, on the payment of a royalty to the innovator company, Bayer.
Natco had pegged its price at about Rs 8,900, while Bayer’s price on its branded Sorafenib (Nexavar) is Rs 2.8 lakh.
Reputed domestic companies are often not able to undertake steep price-cuts on medicines because the medical profession doubts the quality of the drug, observed Cipla Chairman and Managing Director, Dr Y.K. Hamied.
With Natco’s price pegged at over Rs 8,000 (as submitted at the Patent Office), that becomes the benchmark price, Dr Hamied toldBusiness Line, adding that the price-cuts on the three Cipla drugs come into effect right away and would be seen on the new batches of these medicines.
The company is bringing down the prices by taking advantage of the economies of scale it has managed to get on the product, added the company official.
Oncology is not a large part of Cipla’s portfolio, but is increasingly getting a major thrust from the company, Dr Hamied added.
Lung cancer
Cipla has also dropped its price on lung cancer drug Gefitinib by 60 per cent. Retail prices have come down from Rs 10,200 to Rs 4,250, the official said. The original drug is made by Astra Zeneca under the name Iressa.
Brain tumour
The third drug that Cipla is dropping the prices is on brain tumour drug Temozolamide in three strengths. Schering makes the original drug.
On the 20-mg pack of five, Cipla has brought down the price from Rs 1,875 to Rs 480; on the 100-mg strength, prices are down from Rs 8,900 to Rs 2,400 and on the 250-mg — it’s down from Rs 20,250 to Rs 5,000.

Professor Brook K. Baker

Health GAP (Global Access Project)
Northeastern U. School of Law
Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115 USA
Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa
(w) 617-373-3217
(cell) 617-259-0760
(fax) 617-373-5056
b.baker at neu.edu

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