Friday, March 25, 2005
The Patent Bill is almost law
As most of you may have noticed, the new patents bill in India was passed by a voice vote in the Rajya Sabha on Wednesday. Only the president's signature now stands between the bill and what I think will be trouble. The new patents bill, which covers everything from software to pharmaceuticals, attracted the most attention for what it would do to drug prices. Rightly so. I am all for liberalisation, but to succumb to the intense lobbying of the pharmaceutical companies without thinking through the consequences is pretty dumb. Health care is not software and should not be treated as if it was.
My question is why there isn't more concern in the Indian media about this or am I missing something? Yesterday, the New York Times carried two full-length stories about this. In particular, the stories shed light on what may happen to AIDS patients as a result, not just in India but all over the world.
"It's very disappointing, but it could have been worse," said Daniel Berman, a coordinator of the global access campaign for the medical charity Doctors Without Borders. "All generics could have been removed from the market." Instead, all the generic drugs already approved in India can still be sold, though sellers must now pay licensing fees. There are also provisions allowing companies that make generics to copy drugs in the future.But there are relatively tough criteria for such copying, and activists predicted that prices for newly invented drugs will be much higher, because drug makers will have the same 20-year patent monopolies as they have in the West. As AIDS patients develop resistance to old drugs, new treatments will become less affordable, they said.
Under the new law, a maker of generics can apply to copy a patented drug, but only after it has been marketed for three years. In addition, the patent owner can object. Also, the generic's maker must pay a "reasonable" royalty, although the law does not define reasonable. Two years ago, Mr. Berman noted, the London-based company GlaxoSmithKline demanded 40 percent of the sales proceeds of an AIDS drug it licensed to a South African company. (Under pressure from South African regulators and activists, it later licensed it to three rival companies for only 5 percent.) In 2003, the Swiss drug maker Novartis forced Indian competitors to stop making generic versions of its leukemia drug Glivec, which the Indian companies sold for $2,700 a year. Novartis then priced its version at $27,000 a year, while giving free treatment to a few poor patients. If a drug is desperately needed, the new law allows the government to declare an emergency and cancel its patent. But Mr. Berman said India had never declared such an emergency, and for years resisted admitting that it had an AIDS problem. In Africa, exports by Indian companies, especially Cipla and Ranbaxy Laboratories, helped drive the annual price of antiretroviral treatment down from $15,000 per patient a decade ago to about $200 now. They also simplified therapy by putting three AIDS drugs in one pill. D
These are the two paragraphs that should worry every Indian.
Before 1970, India's patent laws came from its colonial days, and it had some of the world's highest drug prices. Process patents on drugs, fertilizers and pesticides have extended life expectancy and ended regular famines.
With the new law, analysts said, prices on patented breakthrough drugs would most likely rise to nearly the level in the United States, while prices on more commonly used drugs would most likely rise only moderately. The government has said it would step in if price rises were excessive but has not said how that would be determined.
If you were looking for a silver lining, here is one.
The Indian bill was amended to prevent "evergreening," in which patent owners try to get a new 20-year monopoly by patenting a variant on the same molecule. To win a new patent, the applicant will have to prove the variant works better.
Has the government deliberately left loopholes in the law? Perhaps, given the number of times the word 'reasonable' appears in the law ('reasonable affordability,' 'reasonable pricing,' 'reasonable royalty etc). Even folks at Pfizer India agree that the controller of patents is going to have enormous discretionary power to decide what the term 'reasonable' really means.
Will the patents bill help the domestic (as opposed to Indian subsidiaries of MNC's) pharmaceutical industry?
Smaller generic drug makers could be priced out of the market and disappear, analysts said. Yusuf Hamied, the chairman of Cipla, a company known for supplying AIDS cocktails in Africa for a third of the price in the West, cited the experience of Italy, which instituted drug patents in 1984. "What is the position of indigenous Italian industry today?" he asked. "Zilch. They've all been taken over. And from being a net exporter, they've become a net importer of drugs."
My question is why there isn't more concern in the Indian media about this or am I missing something? Yesterday, the New York Times carried two full-length stories about this. In particular, the stories shed light on what may happen to AIDS patients as a result, not just in India but all over the world.
"It's very disappointing, but it could have been worse," said Daniel Berman, a coordinator of the global access campaign for the medical charity Doctors Without Borders. "All generics could have been removed from the market." Instead, all the generic drugs already approved in India can still be sold, though sellers must now pay licensing fees. There are also provisions allowing companies that make generics to copy drugs in the future.But there are relatively tough criteria for such copying, and activists predicted that prices for newly invented drugs will be much higher, because drug makers will have the same 20-year patent monopolies as they have in the West. As AIDS patients develop resistance to old drugs, new treatments will become less affordable, they said.
Under the new law, a maker of generics can apply to copy a patented drug, but only after it has been marketed for three years. In addition, the patent owner can object. Also, the generic's maker must pay a "reasonable" royalty, although the law does not define reasonable. Two years ago, Mr. Berman noted, the London-based company GlaxoSmithKline demanded 40 percent of the sales proceeds of an AIDS drug it licensed to a South African company. (Under pressure from South African regulators and activists, it later licensed it to three rival companies for only 5 percent.) In 2003, the Swiss drug maker Novartis forced Indian competitors to stop making generic versions of its leukemia drug Glivec, which the Indian companies sold for $2,700 a year. Novartis then priced its version at $27,000 a year, while giving free treatment to a few poor patients. If a drug is desperately needed, the new law allows the government to declare an emergency and cancel its patent. But Mr. Berman said India had never declared such an emergency, and for years resisted admitting that it had an AIDS problem. In Africa, exports by Indian companies, especially Cipla and Ranbaxy Laboratories, helped drive the annual price of antiretroviral treatment down from $15,000 per patient a decade ago to about $200 now. They also simplified therapy by putting three AIDS drugs in one pill. D
These are the two paragraphs that should worry every Indian.
Before 1970, India's patent laws came from its colonial days, and it had some of the world's highest drug prices. Process patents on drugs, fertilizers and pesticides have extended life expectancy and ended regular famines.
With the new law, analysts said, prices on patented breakthrough drugs would most likely rise to nearly the level in the United States, while prices on more commonly used drugs would most likely rise only moderately. The government has said it would step in if price rises were excessive but has not said how that would be determined.
If you were looking for a silver lining, here is one.
The Indian bill was amended to prevent "evergreening," in which patent owners try to get a new 20-year monopoly by patenting a variant on the same molecule. To win a new patent, the applicant will have to prove the variant works better.
Has the government deliberately left loopholes in the law? Perhaps, given the number of times the word 'reasonable' appears in the law ('reasonable affordability,' 'reasonable pricing,' 'reasonable royalty etc). Even folks at Pfizer India agree that the controller of patents is going to have enormous discretionary power to decide what the term 'reasonable' really means.
Will the patents bill help the domestic (as opposed to Indian subsidiaries of MNC's) pharmaceutical industry?
Smaller generic drug makers could be priced out of the market and disappear, analysts said. Yusuf Hamied, the chairman of Cipla, a company known for supplying AIDS cocktails in Africa for a third of the price in the West, cited the experience of Italy, which instituted drug patents in 1984. "What is the position of indigenous Italian industry today?" he asked. "Zilch. They've all been taken over. And from being a net exporter, they've become a net importer of drugs."
