Kill the foreign pill

Back in 2003, George Washington University (GWU) started the GWU India Project, a project that gave dramatic insights into how the ‘business’ of lobbying works to a nation’s detriment. Private companies and associations were found to be the funding entities for R&D and consulting; and in turn, these entities got public policy and judicial decisions fabricated and influenced to their benefit with respect to Intellectual Property (IP).

Foreign Pharma has always kept a close eye on Indian pharmaceutical manufacturers and related drug legislations, especially as most of our manufacturers are infamous for producing low cost generic unbranded drugs, whose branded versions are being sold at prices that are phenomenally high and out of reach of those millions of Indians who are waiting for 

lifesaving drugs and struggling with treatable diseases.

Consequently, US pharma giants have been continually lobbying politically with their government to pressurise the Indian government to insert a cap on permits that are issued to domestic companies for making low-cost copies of patented drugs. Even companies like Pfizer and Merck met the Department of Industrial Policy & Promotion (DIPP) to lobby against compulsory licences being issued by India. For the uninitiated, a compulsory licence is a permission issued to any local manufacturer allowing him to produce the so-called ‘copied versions’ of patented medicines without any prior permission of the original patent owner. For instance, Novartis’ anti-leukemia drug Glivec costs an unaffordable Rs 1.2 lakh per month, while its generic formulation, made by domestic manufacturers, costs nothing more than Rs 8,000. In another similar case, in March 2012, India’s Patent Controller issued a compulsory licence to an Indian generic manufacturer to produce Sorafenib Tosylate, which was being sold by Bayer for $4500 per person per month in India as kidney and liver cancer medicine.

In June 2013, around 170 members of the US Congress, in a written request to President Obama, asked him to express his resentment to India about India’s IP and patent acts. And mind you, handing out compulsory licences is nothing illegal and is nothing that is a radically new convenient policy designed by us. On the contrary, this is done based on India’s right under the WTO TRIPS Agreement, which empowers India to ‘allow a third party to produce a generic version of the drug in question by granting a compulsory licence.’

Since the last few years, the Indian pharma industry has seen numerous high-profile mergers and acquisitions, wherein big foreign pharma firms have been rapidly taking over their Indian counterparts; one of the latest examples being Aventis Pharma, which recently acquired a Mumbai-based pharma company named Universal Healthcare. This year, US pharmaceutical company Mylan succeeded in a $1.6 billion acquisition of Agila Specialties. Agila was a pioneer in the production of vaccines and generic injectable-drugs. Similarly, Daiichi Sankyo bought controlling stakes in Ranbaxy Laboratories, while Sanofi did the same with Shanta Biotech in 2010; and Abbott Laboratories with Piramal Healthcare.

Such rapid cannibalisation by foreign firms will kill the very concept of essential drugs and even generic drugs. Around 70 drugs are tagged as essential drugs and are sold at relatively lower prices, as these are regarded as essential life-saving drugs. However, with MNCs now controlling most of the generic manufacturers, these drugs would find themselves off from the counters of the chemists. What could be more ironical, and to be very straightforward, more shameful for a nation than the fact that more than 770 patents out of 1,000 odd patents were awarded by Indian authorities to foreign drugs manufacturers in FY 2010-2011. Of the total 3,400 drugs patents’ awarded by Indian authorities between 2005 and 2010, a whopping 3,000 plus went to foreign pharma giants, with foreign players like Eli Lilly and Co, Pfizer, Novartis and Bayer AG being the leading players.

In December last year, I wrote an editorial on how patents are anti-poor. I would like to quote a few lines from the same editorial again, just to reiterate the argument again that patents and similar such policies are more for the rich and for enlarging the hole in the pockets of the poor. I quote from the said editorial, ‘In his book called Sex, Science and Profits, Professor Terrence Kealey argues how there is absolutely no need to give patent rights to anyone for 30 years, when in reality the cost of research studies with high profits can be recovered back in three years on an average. And while the time period of patent rights for every other sphere can still be debated, in the arena of medical sciences, this must be changed with immediate effect. Additionally, policies similar to the Indian National Pharmaceutical Pricing Policy 2012 – which puts a cap on the prices of 652 popular medicines – must be notified with an immediate effect.’

The Indian government should immediately pass regulations that can empower and encourage more domestic generic drugs manufacturers and save them from irrational acquisitions. Leaving generic drug companies without any governmental and legal protection would only lead to a dramatically negative effect on the Indian society, something that India can ill-afford now or ever.

The author is a management guru and director of IIPM think tank