Business Today

Patent vs public good

In India’s pharmaceutical industry, battles get tricky.

     Print Edition: February 10, 2008

India’s patent law has been put to test and the outcome could well decide how the global pharma industry views the country henceforth. At the heart of this quandary is a lucrative new drug on the one side and, on the other, two Indian companies that want to launch copy-cat versions of the drug under two different provisions of India’s new patent law.

In the first case, Hyderabadbased Natco Pharma has filed the country’s first application for compulsory licensing of Roche’s antilung cancer drug Tarceva (chemical name: erlotinib). Compulsory licensing allows the government to order manufacture of patented drugs by non-patent holders to respond to public health emergencies. In the second case, Mumbai-based Cipla has filed a ‘post-grant opposition’ (that is, it is challenging a patent already granted to Roche) to manufacture a cheaper copy of Tarceva. Says Y. K. Hamied, CMD, Cipla: “At present, the drug is unaffordable at Rs 4,800 per tablet for the patients in India.” Cipla intends to supply the drug at Rs 1,600 per tablet.

What’s the ground on which Natco, which had earlier filed a pre-grant opposition and lost, is invoking the compulsory licensing clause? Apparently, Nepal desperately needs 30,000 tablets of Tarceva a month but is unable to buy them at the current price. Can lung cancer be described as a public health emergency? This magazine doesn’t think so. “The Tarceva matter brings to the fore multiple paradoxes of the risk-reward tradeoff, innovating new treatments and ensuring access to affordable drugs once the drug is in the market,” says Utkarsh Palnitkar, Partner and Industry Leader-Health Sciences, Ernst & Young. Most of all, it will test the sanctity of India’s compulsory licensing provision.

Chances are neither Natco nor Cipla, whose patent challenge is par for the course in the industry, will eventually get a decision in their favour. And possibly this is something even they realise, which is why both of them seem willing to offer Roche royalty—Natco has even specified a 5 per cent figure. The Controller General will likely hear Natco’s case in another month or so. No one can say for sure what its decision will be, but one thing’s for certain: India’s compulsory licensing guidelines need tightening.

— E. Kumar Sharma

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