Oh Lord, won’t you buy me a Mercedes Benz?
My friends all drive Porsches, I must make amends.
Worked hard all my lifetime, no help from my friends,
So Lord, won’t you buy me a Mercedes Benz?
~ Janis Joplin

Under Section 84 of the Indian Patents Act, 1970, any person can make an application to the Controller for a compulsory licence after the expiry of three years from the date of sealing of the patent, on the following grounds:  (a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or (b) that the patented invention is not available to the public at a reasonably affordable price, or (c) that the patented invention is not worked in the territory of India.

The Trade-Related Aspects of Intellectual Property Rights and the Doha Declaration provide for compulsory licensing in specified circumstances, including concerns on public health or public interest.

In India, Bayer Corp. markets sorefinib as Nexavar for about $5,600 a month under a patent in force until 2021.  The Indian Patent Office has now issued an order that the high price of Nexavar makes it “not available to the public at a reasonably affordable price.”

The full order stated that the suit met all three requirements, that is:

  1. that since Bayer supplied the drug to only 2% of the patient population, the reasonable requirements of the public with respect to the patented drug (Nexavar) were not met;
  2. that Bayers pricing of the drug was excessive and did not constitute a “reasonably affordable” price; and
  3. that Bayer did not sufficiently “work” the patent in India.

The grant of the license by the Controller-General of Patents, Designs and Trade Marks to Natco Pharma for manufacture of the drug Sorafenib Tosylate (Nexavar) to treat liver and kidney cancer is a landmark event.

Natco said its version would cost Indian patients $175 a month. It was the first case of compulsory licensing under India’s unique patent laws passed in 2005. Under the license Natco must pay 6 percent in royalties to Bayer. Aid groups counter that Indian generics are a lifesaving resource for patients in poor countries who cannot afford Western prices to treat diseases like cancer, malaria and HIV.

“This is a rare instance where a general compulsory license has been issued, not bound by government use provisions or those requiring to show ‘extreme urgency’ or ‘emergency,” said Dr. Amit Sengupta of the People’s Health Movement.

G. Ananthakrishnan wrote an Op-Ed piece in the Indian newspaper The Hindu stating:

The government’s decision to grant a compulsory license for the manufacture of an important anti-cancer drug should be the first step towards making available essential drugs at little or no direct cost.

Producing drugs is, no doubt, an expensive business, and significant funds are invested in research and rigorous testing. The drugs developed through this process have great impact on the well being of people. Yet, patents can also produce monopolies, and thus immense power for corporations. It is important to remember that patents deal with intellectual property, which, unlike other property, produces no conflict over use. Use by one person does not cause any rivalry with another and thus has no marginal costs.

What is revealing is that the price gap between government procurement of drugs and retail sale can be staggeringly wide — between 100 per cent and 5,000 per cent. Moreover, the price index for medicines has parted from the index for all commodities and moved steadily upward, since 1997-98. This is clear evidence of unethical pricing of many medicines for rising profit, using patents as a cover, as well as lack of regulation.

If you disagree with Mr. Ananthakrishnan  logic, you may provide feedback at:  anant@thehindu.co.in

As we’ve discussed before, nothing in life is free. Drug companies won’t develop drugs unless they can charge for the drugs. Here, the drugs are available. This is a case of (usually) governments not wanting to pay the cost of healthcare for their own citizens. And what government wouldn’t want to pay less?

I’m all for furthering discussions on how to share the burden of medical care costs but saying that the burden should fall solely on the patent holder is short-sighted and unfair.

Oh Lord, won’t you buy me a Mercedes Benz?

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3 Comments

  1. [...] I’ve certainly heard from a number of people regarding my earlier post on  the compulsory license granted by the Controller-General of Patents, Designs and Trade Marks to Natco Ph…, a drug used to treat liver and kidney [...]

  2. [...] over patented cancer drug (IP Whiteboard) (IPKat) (Patent Law Practice Center) (Patent Docs) (Patent Baristas) (Patent [...]

  3. [...] commentary on the compulsory license granted by the Indian Patent Office for Bayer’s drug Sorafenib Tosylate (Nexavar): I read your follow-up post on compulsory licensing.  In it, you state that average income in [...]

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