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Should India allow use of Compulsory License as a common tool to improve access to medicines?

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Compulsory License (CL) is generally considered a very important provision in the Patent Act of a country to protect public health interest not only by the governments, but also by a large number of experts across the globe and the intelligentsia within the civil society.

The key objectives:

The key objectives of the CL provisions in the statute are to:

  • Rectify any type of market failure
  • Discourage abuse of a patent in any form by the patent holder

WHO hails CL provisions:

‘The World Health Organization (WHO)’ says that ‘the provision for Compulsory Licenses (CL) is a critical element in a health-sensitive patent law’. It emphasized that CL constitutes an effective mechanism to:

-     Promote competition

-     Increase affordability of drugs, while ensuring that the patent owner obtains compensation

for the use of the invention

-     Lack or insufficiency of working of patent

-     Remedy of anti-competitive practices

-     National emergency

-     Government use for non-commercial purpose

-     Other public interest grounds

WHO also recommends the use of CL for any “abuse of patent rights”. This is primarily to ensure that drug prices remain consistent with local purchasing power.

Even ‘UNAIDS’ have recommended the use of CL, as provided under the TRIPS Agreement, where countries have the right to issue such licenses.

Views of R&D based pharma companies:

It is well known that the provisions for the grant of CL other than national emergencies have been generally opposed by the research-based pharmaceutical industry on the grounds that they discourage investments on R&D.

Despite such opposition, most developed countries have CL provisions in their law, which the respective governments can use to promote competition and access to medicines.

Provisions for CL in TRIPS Agreement:

While TRIPS agreement does not limit the grounds or reasons for granting CL, countries can only use those grounds which are allowed by their own national legislation. The development of appropriate national legislation is therefore crucial.

TRIPs further states that the conditions under which a compulsory license is granted should be regulated in accordance with the TRIPs Agreement (Article 31), under a number of conditions aimed at protecting the legitimate interests of the right holder.

Examples of CL provisions in some important countries:

China: Quite close on the heel of grant of Compulsory License (CL) to Bayer AG’s expensive Kidney and Liver cancer drug Sorafenib Tosylate to the domestic Indian manufacturer Natco by the Indian Patent Office, as provided in the Indian Patent Law, China amended its own Patent Law allowing Chinese pharmaceutical manufacturers to make cheaper generic equivalent of patented medicines in the country not only during ‘state emergencies’, but also in ‘unusual circumstances’ or ‘in the interests of the public’.

U.S: Patent law does not provide for CL, which is allowed under the antitrust law. US has been granting CL to remedy anti-competitive practices and for governmental use, including national security.

Canada:  The country introduced CL for drugs, way back in 1923. Canada has granted number of CLs and a robust generic pharmaceutical industry exists in that country.

France: French law authorizes CL when medicines are “only available to the public in insufficient quantity or quality or at abnormally high prices”.

Israel: In Israel a CL can be granted, “if it is necessary to assure the public of a reasonable quantity of a product capable of being used as a medicament, to manufacture a medicament or a patented process for manufacturing a medicament.”

Brazil:  The country will grant CL in cases of “national emergency or public interest, declared by the Federal Executive Authorities. A temporary nonexclusive compulsory license can be granted if necessary. Brazil defines Public Health interest to include “public health protection, satisfying nutritional requirements, protection of the environment and other areas of fundamental importance to the technological or social and economic development of the country.”

Very few CLs granted between 1995-2012:

Despite having the provisions for the grant of CL in many countries, not many CLs have been granted across the world from 1995 to date. The details are as follows:

Country Medicine CL granted in
Israel Hepatitis B Vaccine October 1995
Italy Imipenem (antibiotic) June 2005
Italy Sumatripan Succinate (migraine) February 2006
Canada Oseltamivir (influenza) July 2006
Brazil Efavirenz (HIV/AIDS) May 2007
Thailand Erlotinib, Docetaxel (cancer) January 2008
India Sorafenib Tosylate (cancer) March 2012

Source: DNA, March 9, 2012

India joins the league in 2012:

Indian Patent Office granted a Compulsory License (CL) for Sorafenib Tosylate (Nexavar of Bayer Corporation) to Hyderabad based Natco Pharma Limited under the provisions of Section 84 of the Indian Patents Act. Nexavar is used for treatment for liver and kidney cancer.

The Compulsory License, first of its kind granted in India, enables Natco to sell the drug at a price not exceeding Rs. 8880 (US$ 178 approx.) for a pack of 120 tablets (one month’s therapy) against Rs. 284,428 (US$ 5,690 approx.) being the cost of Nexavar sold by Bayer before the CL was granted to Natco. The license is valid till the expiry of the patent on 2021.

The order on CL also makes it obligatory for Natco to supply the drug free of cost to at least 600 needy and deserving patients per year.

The grant of CL generated adverse impact from many developed nations of the world, as was expected by many.

However, welcoming the order Natco reportedly commented, “This opens up a new avenue of availability of life savings drugs at an affordable price to the suffering masses in India.”

Does grant of CL for non-NLEM products make sense in India?

Currently all government healthcare initiatives in India are focused on ‘The National List of Essential Medicines 2011 (NLEM 2011)’, be it drug price control, free distribution of medicines to all through government hospitals/health centers or even much hyped, ‘Universal Health Coverage’ proposal.

In this situation, another school of thought says that by granting CL to Natco for Sorafenib Tosylate (Nexavar of Bayer), which does not fall under NLEM 2011, hasn’t India diluted its focus on essential drugs? More so, when NLEM 2011 features quite a good number of anti-cancer drugs, as well.

The other side of the argument: Is CL a viable solution to improve access in the developing nations?

International Policy Network (IPN) in an article titled, “Compulsory licensing no solution to health problems in poor countries – say experts from India, Argentina, Canada and South Africa” stated that patents and other forms of Intellectual Property (IP) are an essential component in economic development of any emerging economy, which needs to be well protected by the governments.

The article further opines that any form of interference with IP by the grant of CL or even price controls will undermine investments and cause more harm than good. The paper, therefore, calls for stronger protection of IP across the world.

Yet another paper  titled, “The WTO Decision on Compulsory Licensing – Does it enable import of medicines for developing countries with grave public health problems”, states that flexibility of innovator companies to adjust prices according to purchasing power of the people of different countries is constrained by the following two reasons:

  • A genuine risk that medicines sold at lower prices in the developing countries will be re-exported to high income markets.
  • Many high income developed countries also regulate the prices of medicines at the national level. There is a high risk that these countries will use prices in the developing markets as external reference pricing.

Thus, the author argues, in both the above situations, patented medicine prices will be undermined in the most important markets, making it difficult for the research-based companies to use prices only of high income countries to fund R&D costs for the discovery of new medicines.

Fostering innovation in India:

The healthcare industry in general and the pharmaceutical sector in particular have been experiencing a plethora of innovations across the world, not only to cure and effectively manage ailments to improve the quality of life, but also to help increasing overall disease-free life expectancy of the population with various types of treatment and disease management options.

Innovation being one of the key growth drivers for the knowledge economy, the creation of an innovation friendly ecosystem in India calls for a radical change in our mind-set.

From process innovation to product innovation, from replicating molecules to creating new molecules- a robust ecosystem for innovation is the wheel of progress of any nation, and India is no exception. It is encouraging to hear that the Government of India is working towards this direction in a more elaborate manner its 12th 5 year plan.

However, the question that is being raised now: will frequent grant of CL vitiate the attempt of the government to create an innovative culture within the pharmaceutical industry in India. 

CL will not arrest increasing ‘OoP’ for healthcare in India:

While India is making reasonable strides in its economic growth, the country is increasingly facing constraints in proving healthcare benefits to a vast majority of its population with ballooning ‘Out of Pocket (OoP)’ expenditure of around 78 per cent of its population.

This is mainly because of the following reasons:

  1. Absence of ‘Universal Health Coverage’
  2. Lack of proper healthcare financing and insurance system for all strata of society
  3. Difficulty in managing the cost of healthcare even when the country is providing generic drugs for a sizable part of the world market

One finds some good initiatives though, for population Below the Poverty Line (BPL) and hears about the success of ‘Rashtriya Swasthya Bima Yojna (RSBY)’ and other health insurance schemes through micro health insurance units, especially in rural areas. It has been reported that currently around 40 such schemes are active in the country.

As the disease pattern is undergoing a shift from acute to chronic non-infectious diseases, OOP on healthcare will increase further.

Currently health insurance schemes only cover expenses towards hospitalization. Ideally, medical insurance schemes in India should also cover domiciliary or in-patient treatment costs and perhaps loss of income too, along with hospitalization costs, if India wants to bring down the OoP for its population or at least till such time the ambitious ‘Universal Health Coverage’ project gets translated into reality.

Greater focus of the Government in these areas, many believe, will help increasing access to essential medicines very significantly in India, rather than frequently granting CL, as is being envisaged by many, especially for drugs, which are outside NLEM 2011.

Access to patented medicines unlikely to be addressed effectively despite frequent grant of CL: 

As we know, access to healthcare comprises not just medicines but more importantly healthcare infrastructure like, doctors, paramedics, diagnostics, healthcare centers and hospitals . In India the demand for these services has outstripped supply. There is a huge short fall in ‘Healthcare Manpower’ of the country as demonstrated in the following table:

Target

Actual

Shortfall %
Doctors

1,09,484

26,329

76
Specialists

58,352

6,935

88
Nurses

1,38,623

65,344

53
Radiographers

14,588

2,221

85
Lab Technicians

80,308

16,208

80

Source: Rural Health Statistics 2011 in 12th Plan draft chapter

Thus, there is an urgent need to have a holistic approach with the ‘Universal Healthcare’ in developing adequate healthcare infrastructure, efficient delivery system for medical supplies and creation of a talent pool of healthcare professionals and paramedics, to ensure access to healthcare for all the citizens of the country.

Without all these how will the diseases be diagnosed and the patients be treated for ailments, frequent grant of  CL not withstanding? 

Conclusion:

Be that as it may, the prices of medicines in general and the patented drugs in particular will continue to remain highly sensitive in most parts of the world, if not all, which some astute Global CEOs of the pharmaceutical majors have already contemplated.

One of these Global CEOs very aptly commented, “Pharmaceutical industry, too, on its part, needs to metamorphose to strike a balance in delivering affordable and innovative medicines. It is unacceptable to hear of the US$1billion cost to develop a drug, which includes the cost of failure. We need to fail less often and succeed more often.”

He reiterated, “Pharma companies need to understand that just because you have a patent, people don’t suddenly have money in their pockets, or can afford American prices.”

In the same context another Global CEO said, “Our strategy is really to have affordable medicines because in emerging markets you do not have government reimbursement. So you have to have medicines that people can afford to pay for.…I do not want us to be a colonial company with a colonial approach where we say we decide on the strategy and pricing. If you have to compete locally then the pricing strategy cannot be decided in Paris but will have to be in the marketplace. People here will decide on the pricing strategy and we have to develop a range of products for it.”

Keeping all these developments in view, as I said before, the contentious issue of the price of medicines cannot just be wished away across the world, which is perhaps more relevant now than ever before.

This is irrespective of the fact whether the country provides likes of ‘Universal Health Coverage’ or is driven by OoP expenditure by the majority of its population. Gone are those days, as articulated by the above Global CEOs, when a single global price for a product will be acceptable by all the nations across the world. India seems to be moving to this direction cautiously but steadily. 

It appears, responsible pricing and effective working of patents are the only answers to respond to the CL issue in India.

Thus, I reckon, it does make sense for India to have the relevant provisions of CL in its Patent Act, not just to rectify any type of market failure, but also to discourage any possible abuse of a patent in any form by the patent holder in the country, as mentioned above.

However, it is also important for India to examine the potential negative impact of CL to foster innovation in the country and the global ramification of the same, including attraction of more ‘Foreign Direct Investments (FDI)’, which has been universally proved to be so important for the economic progress of any country, like India and China.

That said, while none can deny that all citizens of India should have access to affordable life-saving essential medicines, it appears rather impractical to envisage that routine grant of CL by the Indian Patent Office, as enumerated above by Natco et al, will be able to resolve the critical issue of improving access to essential medicines on a longer term basis in India.The decision for grant of CL, I reckon, should be taken in India only after exhausting all other access improvement measures.

As enumerated above, the use of CL as a common tool to improve access to medicines could prove to be counterproductive in the long run for India.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

The ruckus over Clinical Trials in India compels Government tightening regulations before flooring gas pedal for regional leadership

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The subject of Clinical Trials in India has created a huge ruckus, mainly for wide spread alleged malpractices, abuse and misuse of the fragile regulations of the country by the players in this field. The issue is not just of GCP or other clinical trial related standards but more of ethical mind-set and reported rampant exploitation of uninformed patients even in case of trial related injuries or death.

The Bulletin of the World Health Organization (WHO) in an article titled, “Clinical trials in India: ethical concerns” reported as follows:

“Drug companies are drawn to India for several reasons, including a technically competent workforce, patient availability, low costs and a friendly drug-control system. While good news for India’s economy, the booming clinical trial industry is raising concerns because of a lack of regulation of private trials and the uneven application of requirements for informed consent and proper ethics review.”

Damning report of the Parliamentary Standing Committee:

Recently the Department Related ‘Parliamentary Standing Committee (PSC)’ on Health and Family Welfare presented its 59th Report of 118 pages in total on the functioning of the Indian Drug Regulator – the Central Drugs Standard Control Organization (CDSCO) in both the houses of the Parliament on May 08, 2012.

The report begins with the following observations:

Medicines apart from their critical role in alleviating human suffering and saving lives have very sensitive and typical dimensions for a variety of reasons. They are the only commodity for which the consumers have neither a role to play nor are they able to make any informed choices except to buy and consume whatever is prescribed or dispensed to them because of the following reasons:

  • Drug regulators decide which medicines can be marketed
  • Pharmaceutical companies either produce or import drugs that they can profitably sell
  • Doctors decide which drugs and brands to prescribe
  • Consumers are totally dependent on and at the mercy of external entities to protect their interests.

In this prevailing condition, the committee felt that effective and transparent drug regulation, free from all commercial influences, is absolutely essential to ensure safety, efficacy and quality of drugs keeping just one objective in mind, i.e., welfare of patients.

Some critical findings on the Drug Approval Process:

The PSC in its report made, the following critical findings, besides others:

  • “A total of 31 new drugs were approved in the period January 2008 to October 2010 without conducting clinical trials on Indian patients.
  • Thirteen drugs scrutinized by the panel are not allowed to be sold in the United States, Canada, Britain, European Union and Australia.
  • Sufficient evidence is available on record to conclude that there is collusive nexus between drug manufacturers, some functionaries of CDSCO and some medical experts.
  • Due to the sensitive nature of clinical trials in which foreign companies are involved in a big way and a wide spectrum of ethical issues and legal angles, different aspects of clinical trials need a thorough and in-depth review.”

Proper Auditing of Clinical Trials are lacking:

It is sad that that adequate focus on the ‘Clinical Trial Registry’ and even ‘Auditing of Clinical Trials’ is currently lacking in India, which are considered so important not only to maintain the credibility of the studies, but also to demonstrate their scientific integrity and ethical values.

Unfortunately, there seems to be many loose knots in the current clinical trial policy, practices and guidelines in the country, which require to be tightened by the Government to make the system efficient and transparent in the national endeavor of establishing India as one of the most favored destinations for global clinical trials.

Health Ministry recently responded:

Facing this stark reality and pressured by the Parliament, the government has recently demonstrated its intention of tightening the loose knots in the following two critical areas:

  1. Permission to conduct Clinical Trial
  2. Compensation of the Clinical Trial victims

A. “Permission to conduct Clinical Trial in India’ – the draft notification:

In response to the prevailing conundrum, ‘The Ministry of Health and Family Welfare’ of the Government of India issued a draft notification on 17th July, 2012 seeking stakeholders’ views on the ‘Permission to conduct Clinical Trial’.

The draft notification says that the licensing authority after being satisfied with the adequacy of the data submitted by the applicant in support of proposed clinical trial, shall issue permission to conduct clinical trial, subject to the following conditions:

  1. Clinical trial shall be conducted in compliance to the approved GCP Guidelines.
  2. Approval of the ‘Ethics Committee’ shall be obtained before initiation of the study.
  3. Ethical aspects of the clinical trial as described in the “Ethical Guidelines for Biomedical Research on Human Participants” published by the Indian Council of Medical Research (ICMR), shall be fully complied with.
  4. Clinical trial shall be registered at Clinical Trials Registry of India (CTRI) before enrolling the first patient in the study.
  5. Annual status report on clinical trial viz. ongoing or completed to be communicated to the said Licensing Authority.
  6. Any ‘Suspected Unexpected Serious Adverse Reaction (SUSAR)’ occurring during clinical trial shall be communicated within fourteen calendar days to the Licensing Authority and to the other investigator(s) participating in the study.
  7. In case of study related injury or death, the applicant will provide complete medical care, as well as, compensation for the injury or death and statement to this effect shall be incorporated in the Informed Consent Document. The details of compensation provided shall also be intimated to the licensing authority.
  8. The premises of sponsor/Clinical Research Organization (CRO) and clinical trial sites shall be open to inspection by the officer of Central Drugs Standard Control Organization (CDSCO), who may be accompanied by an officer of the concerned ‘State Drug Control Authority’ to verify compliance to the requirements of Schedule Y, GCP guidelines and other applicable regulation.
  9. The sponsor/ CRO, investigators shall allow officers of CDSCO who may be accompanied by an officer of the concerned ‘State Drug Control Authority’, to enter with or without prior notice, any premises of sponsor/ CRO, clinical trial site to inspect, search and seize any record, data, document, books, investigational drugs etc. related to clinical trials and provide adequate replies to any queries raised by the inspecting authority in relation to the conduct of clinical trial.

This area of the clinical trial regulations will be finalized after taking into consideration of all the comments received from the stakeholders within the specified period.

B. ‘Compensation of the Clinical Trial victims’:

To address the pressing issues in this area Central Drugs Control Organization (CDSCO) in August 3, 2012, published an interim “GUIDELINES FOR DETERMINING QUANTUM OF FINANCIAL COMPENSATION TO BE PAID IN CASE OF CLINICAL TRIAL RELATED INJURY OR DEATH”

The document articulates as follows:

“Presently there is no specific provision under Drugs and Cosmetics Rules for payment of compensation in case of clinical trial related injury or death of the subject. However, the Good Clinical Practice (GCP) Guidelines for Clinical Trials of India under para 2.4.7 provides that the research subject who suffers physical injury as a result of their participation in clinical trials are entitled to financial or other assistance to compensate them equitably for any temporary or permanent impairment or disability subject to confirmation from Ethics Committee. In case of death, their dependents are entitled to material compensation. Guidelines further provide that it is the obligation of the sponsor to pay the compensation.”

Such concerns were also raised in the Parliament and other forums regarding payment of compensation in the cases of injury or death, related to clinical trials.

CDSCO’s interim guidelines now prescribe an interesting formula, which will be used to arrive at the financial compensation for all clinical trial related injuries and deaths.

To assess right compensation for clinical trial related injuries or deaths following parameters have been mooted in the document:

  • Age of the deceased
  • Income of the deceased
  • Seriousness and severity of the disease, the subject was suffering at the time of his/her participation into the trial.
  • Percentage of permanent disability.

Prior to the above new interim guidelines of the CDSCO, there was no standardization for the financial compensation either for clinical trial injuries or for that matter even death. In the past, such compensation was expected to be decided by the ‘Ethics Committee’ on case to case basis.

As stated above, the above formula has been indicated to be an interim measure before the final notification comes into force after taking into consideration all stakeholders’ comments and suggestions on this very important subject.

Drawing a comparison with China:

Driven by the stellar economic growth together with its booming pharmaceutical industry have enabled China to position itself as an emerging hub for global clinical trials. Following are some examples of the key growth drivers in the clinical research space of China:

  • A large diverse treatment naive patient population
  • Significant cost arbitrage
  • Recent improvements in the regulatory standards
  • Reverse brain drain of Chinese-born scientists educated in the west
  • Changing disease profile
  • Incentives to conduct clinical research in the country

However, linguistic and cultural barriers that affect patient reporting, enrollment and other medical practices in China could work as major barriers to the growth of Chinese clinical trial sector.

Clinical Trials: A ‘China – India’ comparison

It has already been reported  that India is ahead of China as most favored destination for global clinical trials, although the latter is quite close and breathing on the neck of India and could well even zoom past the former, if appropriate robust regulations and their effective implementation are still not ensured in India.

I. Majority of the Top 10 Pharma Companies conduct higher number of trials in India

Sr. No. Company

Clinical Trials in India

 Clinical Trials in China
1

Astra Zeneca

10

10
2

BMS

17

6
3

Eli Lilly

17

12
4

GSK

22

14
5

J&J

20

13
6

Merck

8

5
7

Novartis

9

6
8

Pfizer

16

5
9

Roche

5

14
10

Sanofi

15

13

Total

139

98

(Source: clinicaltrials.gov, 26 Oct 2007)

II. India leads China and Russia in Cardiology and Diabetes trials

Therapy India (%) China (%) Russia (%)
Cardiology 5.38 4.93 4.48
Diabetes 3.05 2.09 2.65
Neurology 0.90 0.90 3.62
Oncology 1.59 1.01 2.32

With the highest number of diabetic patients in the World and a very large population of patients with cardiovascular disorders, India has the potential to be the destination of choice for clinical trials in these two therapy areas, as we move on.

(Source: clinicaltrials.gov, 26 Oct 2007)

III. India has a greater % of phase II and III trials while China has more of Phase I and IV

Clinical Trials in India

Clinical Trials in China
Phase I

4%

 Phase I

7%
Phase II

16%

 Phase II

9%
Phase III

65%

 Phase II

51%
Phase IV

15%

 Phase IV

33%

(Source: clinicaltrials.gov, 26 Oct 2007)

IV. Of the total Industry sponsored trials only 3.5% are carried out in India and 2.63% in China

Company

Global Trials

India + China

Astra

231

20

BMS

148

23

Eli Lilly

238

29

GSK

347

36

J&J

461

33

Merck

213

13

Novartis

440

15

Pfizer

389

21

Roche

302

19

Sanofi

209

28

Total

2978

237

 

India 3.50%
China 2.63%
Global 93.87%

India and China’s share in the Industry sponsored Global clinical trial market is miniscule

Source: clinicaltrials.gov

Overall increasing trend of Clinical Trials Initiated in India:

The following table will substantiate the above point:

Year

No. Of Clinical Trials

1999

1

2000

0

2001

6

2002

6

2003

11

2004

26

2005

141

2006

206

2007

220

2008

295

2009

189

(Source: U.S. NIH, Pharmexcil Research)

India has the potential to accelerate its pace of growth significantly:

If robust regulatory measures are put in place, addressing serious concerns on the inadequacy of clinical trial regulations in India, together with uniform requirements for informed patients’ consent and appropriate ethics review, global pharmaceutical majors can be easily attracted to India for several reasons like:

  1. Technically competent and English speaking workforce,
  2. Patient availability and huge pool of naive patients
  3. Low costs and an improving drug-control system.

Thus, quite a number of criteria, as stated above, favor India to establish itself as a global hub for clinical research. Besides, availability of a number of government-funded medical and pharmaceutical institutions with state-of-the-art facilities could be very useful for mufti-centered clinical trials in the country.

Moreover, the cost to conduct a trial in India is lower by almost 50% – 75% than in the United States or in the EU. In addition, a good communication link favors quick recruitment of patients and faster regulatory approvals. Thus, clinical trials in India could be concluded faster, offering a sharp cutting edge for effective competition.

Due to all these reasons, India is gradually attracting more collaborative contract clinical research proposals in the country. Even many global Clinical Research Organizations (CRO) have already started establishing their set up in India. This pace can be accelerated significantly with the regulatory measures, as stated above.

Conclusion:

Clinical trials are the core of research-based pharmaceutical industry. No new drug can come into the market without clinical trials, which involve both potential benefits and risks to the participants. All clinical trials are conducted with the primary aim of bringing to patients new medicines with a favorable benefit–risk ratio.

Global clinical trials being relatively new to India, no wonder there are several misconceptions on the subject. The companies conducting research need to proactively publicize their commitment to protecting the rights, safety and well-being of trial participants.

All concerned must ensure that the proposals for clinical trials are approved by the government regulatory authorities before commencement and the trials must strictly follow the prescribed norms and procedures. For Phase I-IV human trials, the rights and privileges of the participants must be explained and the trials should commence only after their informed consent. The regulatory authorities, at the same time, should also ensure that any attempt of shortcuts or to bend the system by any means is met with severe consequences.

Although the Ministry of Health has already started initiating some action, as stated above, there is an urgent need for the players in this field to reassure the public, in general, about the high ethical standards that the pharmaceutical companies and Clinical Research Organizations require to comply with and continuously practice, while conducting clinical research.

It is therefore, high time for the Government to tighten the loose knots of the Clinical Trial regulations in the country before flooring the gas pedal to help India surging ahead as a major hub in the clinical trials space of the world, significantly distancing itself from China.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

85% of the patented new drugs have therapeutic equivalents…they do not increase the cost of treatment for the common man: Points…Counterpoints

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Affordability of patented drugs has become a major controversial and at the same time a very sensitive issue in the healthcare space of India, just as in many other parts of the world. The government, the NGOs and other stakeholders, on the one hand, seem to be quite concerned about it. Innovator companies, on the other hand, also have quite robust arguments in their favor.

Meanwhile, the daily newspaper ‘DNA’ published a report on June 15, 2010 with a headline, “NPPA may cap cancer drug prices via Para 10’.

Let us now try to go through the points and counterpoints of this raging debate.

The basic reasons of concern:

The key points for this concern, I reckon, is based on the following two beliefs:

1. All our citizens should have access to all new drugs
2. All these new drugs are essential to treat most of the related disease conditions

Points in favor of free pricing for patented new drugs:

- Price is a function of the value that a patented new drug will offer to the patients. The price of new drugs will, in addition, include components of the cost incurred by the innovators towards research and development, to offer these products to the patients. This is absolutely essential to ensure continuous investment towards R&D by the innovator companies to meet the unmet needs of the patients.

- It has been reported that currently only 2.3% of the Indian Pharmaceutical Market (IPM) will represent drugs, which have no therapeutic equivalent. This means over 97% of the IPM constitutes of medicines, which have one or more therapeutic equivalents.

- So far as the patented products are concerned, over 85% of all those will have therapeutic alternatives. Empirical evidence suggests that just around 15% of the patented molecules have significant therapeutic advantages over existing drugs and cannot be replaced.

- Beta-lactam, Cephalosporin and Quinolone group of antibiotics are still relevant today and will remain for many more years. So are the likes of Beta Blockers, Calcium antagonists, Ace inhibitors, Proton Pump inhibitors and Statins.

- Therefore, all patients with any common disease profile will have adequate and a good number of cheaper treatment options with the generic drugs. As all new drugs are not essential to treat all related disease conditions, generic and patented medicines should co-exist to cater to the healthcare needs of patients of all income groups. Those who can afford to pay extra for the incremental value of such patented drugs should also have an option.

The Counter points:

- The opponents of the above argument raise the counter question, “if 85% of the patented drugs will have appropriate therapeutic equivalents, why then the pharmaceutical companies spend such a huge amount of money and other resources towards R&D to invent molecules, which do not add significant and substantial value to the existing ones to treat patients? Rationalization of such avoidable R&D expenditures will help reducing the price of even path-breaking patented molecules for the treatment of many disease conditions of the ailing patients”

- In this context ‘Australian Prescriber (2004; 27:136-7)’ commented:

“The patent system, which assumes that investment in the development of new drugs, is so important that the principles of the free market should be abrogated to reward pharmaceutical companies with a legally enforced period of protection from competition”.

- NGOs with a differing view point ask, “Many patented products are still not available in India, does the medical profession in the country find themselves seriously handicapped for not having access to these drugs?’

- This group puts forth the counter argument, “patent protection is based on the fundamental belief that for continuing investment to invent newer drugs, innovations must be adequately rewarded through appropriate protection of the patents. Thus patent protection should only be given to those innovations for which no therapeutic equivalents are available.”

Conclusion:

A die-hard protagonist for fostering innovation commented, though the exclusivity for a patented drug given to an innovator would last for 20 years, the real commercial benefits will be available for just around 10 years, that too after spending a fortune towards R&D. Whereas, post patent expiry, the commercial benefits to the generic manufacturers (virtually spending nothing towards R&D) for the same molecule will last in perpetuity…for the patients’ sake!

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.