Patents and Prices

A few follow on articles in todays news on the theme of patenting and drug prices.

Joe Matthew reports in the Business Standard today that 358 of 413 drug patent applications for cancer in India are from top multinationals like Novartis, Aventis, Bristol Myers Squibb, Pfizer, Boehringer, Roche and Abbot.

The rush for patents on cancer medicine can be explained by the potential of the Rs 1,200 crore Indian market.

With nearly 2.5 million patients, cancer is one of the ten leading causes of death in India. Data sources from the National Cancer Registry Programme show that over 700,000 new cases and 300,000 deaths occur annually due to cancer.

However, not all 413 applications will pass muster with the patent office, a patent expert warned. India does not give patents on drugs patented elsewhere before 1995.

The other article, also from the Business Standard titled “Patent Crusader” is a company profile of Cipla.

in 2000, his son stunned the pharmaceutical world by offering to sell anti-retroviral drugs for the treatment of HIV/AIDS at a fraction of existing prices. In an event that gained huge publicity at that time, he told a European Commission meeting that he could sell a three-drug anti-retroviral combination for around $800 per patient, while multinational pharmaceutical companies were selling it for over $12,000.

The next year, he brought his price further down to $300 and finally to $140. This opened the floodgates for Indian drug makers. Soon, countries facing the HIV/AIDS epidemic started placing large orders with them.

The Erlontinib case was the next logical step. In 2005, India switched to a regime of product patents. Companies could no longer produce clones of patented medicine. Knowing very well that Roche had got the patent for Tarceva in July 2007, Cipla went ahead and launched Erlontinib in January this year.

The Delhi High Court has opened the debate one more time for life-saving drugs — should patients be deprived of cheap medicine if it is patented?

Cipla has also challenged the Roche patent on Tarceva, arguing that the original invention data does not justify the patent claims. It has said that the “invention claimed is obvious and does not involve any inventive step and cannot be patented in India.”

This was not the only incident when Hamied showed that he has a mind of his own. In the last decade or so, most large Indian pharmaceutical companies have expanded overseas, especially in the US, which accounts for about half of the world market.

But Cipla kept its focus steady on India and developing countries. Though the company was called conservative by many, it reaped the benefits when the US market for generic drugs, the forte of Indian companies, crashed a couple of years ago. Soon, it had become India’s most valuable pharmaceutical company.

Natco files for Compulsory License in life-saving cancer drug

! Update – Read Chan Park’s (Lawyer’s Collective) excellent minutes of the Compulsory License proceedings.

In an excellent article today, Latha Jishnu of the Business Standard reports on a Compulsory License case initiated by generic manufacturer Natco to obtain permission to sell its cancer “life-saving” drugs in Nepal (Roche’s erlotinib (brand name Tarceva) and Pfizer’s Sunitinib (sold as Sutent)). Snippets from the full article:

For example, Natco is offering its version of erlotinib at just Rs 1,000 per tablet in Nepal against Rs 4,800 a tablet that Roche charges for Tarceva in India. It’s not so difficult to calculate the implications of this across the spectrum.
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Natco’s is the first CL application in India and only the second in the world to be made under the Doha Declaration on public health that was incorporated in the TRIPS agreement. This allows developing countries to use CLs to make cheaper versions of patented drugs in special circumstances, each country being free to use the flexibilities within the TRIPS agreement to formulate its own rules. The first time the CL was invoked, and granted, under the Doha Declaration was in Canada on GSK’s AIDS drug, TriAvir, for export to Rwanda. A CL allows a drug company to manufacture a patented drug without the consent of the patent owner by paying what is deemed a reasonable royalty.

Although the application was made in September, 2007, the Controller General of Patents has yet to take a decision on this. Instead, it had convened a meeting of Natco with the two drug majors last month to which the Hyderabad company had objected, saying that the law (Section 92 A of the Indian Patent Act, 2005) did not warrant that the patentee should be given a hearing. Natco has offered a 5 per cent royalty to the two drug majors in its CL application, a rate that is in keeping with the guidelines suggested by the WHO and other international organisations like UNDP.

What the law does state is that the CL can be made available for manufacture and export “to any country having insufficient or no manufacturing capacity for the concerned product to address public
health problems”. For this, Natco needs to have either a licence or a notification from the Nepal government for the contracted amount. So far, there has been no confirmation on this score from either Natco or the authorities in Kathmandu.

In Canada, royalty is capped at 4 per cent of the price of the generic product, the rate being adjusted downwards depending on the importing country’s rank on the UNDP Human Development Index. In the tiered royalty system proposed by UNDP, the base royalty is set at 4 per cent of the price of a product in high-income markets. This rate is adjusted taking into account the relative capacity of a country to pay, based either on the relative per capita income or the national income.