[Ip-health] News: DNA India- Industry ministry for compulsory licensing for 3rd-party drug making

Terri - Louise Beswick Terri at haiweb.org
Thu Aug 26 01:49:11 PDT 2010

Industry ministry for compulsory licensing for 3rd-party drug making

Published: Tuesday, Aug 24, 2010, 17:28 IST

Place: New Delhi | Agency: PTI 


The industry ministry today suggested that local pharma makers should be
allowed to produce patented drugs to check medicine prices in wake of
acquisition of Indian companies by multinational firms.


The ministry also suggested putting restriction on foreign direct
investment in the sector.


"The department of Industrial Policy and Promotion (DIPP) has prepared a
discussion paper examining the option of introducing compulsory
licensing under the Indian Patent Act (in the pharmaceutical
sector),"commerce and industry minister Anand Sharma said in a
communication to health and family welfare minister Ghulam Nabi Azad.


He said the acquisitions of Indian pharmaceutical companies by foreign
multi-national companies (MNCs) in the recent past has lead to
articulation of public concern on its impact on the availability of
low-cost medicines.


The discussion paper has also suggested to review the foreign direct
investment policy in the sector. At present, 100% FDI is allowed in the
sector through automatic route.


"This (FDI) could be shifted to government route so that proposals for
mergers and acquisitions in this important sector could be scrutinised
by the Foreign Investment Promotion Board (FIPB)," the discussion paper


In 2008, country's largest drug maker Ranbaxy was acquired by Daiichi
Sankyo (Japan) for $4.6 billion and recently the US-based Abbot
Laboratories acquired Piramal Healthcare's domestic business for $3.7


Compulsory licensing is a system where by the government allows third
parties (other than patent holder) to produce and

market patented product without the consent of patent owner.


Though imports of pharma products have been growing, the emphasis on
exports has resulted in a significant lower growth

of domestic consumption. During 2008-09, domesticconsumption in value
terms fell from Rs 45,953 crore to Rs 44,579 crore.


As per a WHO report, 65% of Indians still lack access to essential


While several developed and developing countries like the US, Cananda,
the UK and South Africa have introduced compulsory licensing, India is
yet to explore this WTO compliant option.



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