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India Drug Patents: Threat on Merck, Bristol-Myers?

Pharmaceutical companies from Merck & Co. (MRK:US) to Bristol-Myers Squibb Co. (BMY:USface fresh threats to protecting their patents in India as a government-appointed panel prepares to evaluate more drugs for local makers to copy.

Ketaki Gokhale on Bloomberg News this Jan. 21, 2014

Merck to Bristol-Myers Face More Threats on India Drug Patents

The panel is looking beyond the cancer treatments it studied last year to areas such as HIV and diabetes, according to two people with knowledge of the matter, who asked not to be identified because the discussions are private.

It plans to study more than 20 drugs and recommend the government assign about three so-called compulsory licenses to allow local firms to make low-priced copies in India, they said.

The heightened scrutiny illustrates how emerging markets are becoming harder to navigate for global drugmakers including Pfizer Inc. (PFE:US) and Novartis AG (NOVN), which have struggled to defend their rights on blockbuster therapies in India.

The drugmakers are facing a rising threat to their patents as India’s government seeks to make treatments cheaper locally, said Ajit Mahadevan, leader of the life sciences consulting group at Ernst & Young in Mumbai.

“Moves by policymakers like compulsory licensing result in the feeling that you’re not very comfortable investing,” Mahadevan said. “You can’t build predictability, and big pharma doesn’t like that.”

Compulsory licensing occurs when a government allows someone else to produce a patented product without the consent of the patent owner, who still owns the rights and receives payment for its use, according to the World Trade Organization.

Such licenses can therefore put pressure on brand-name manufacturers to cut prices in response to cheaper generics.

R.K. Jain, additional secretary at the Ministry of Health and Family Welfare, didn’t immediately respond to a call and an e-mail seeking comment on compulsory licenses.

Wider Scrutiny

Among the therapies the committee is preparing to study or had an early look at are two diabetes drugs, Merck’s sitagliptin medication, Januvia, and Bristol-Myers’ saxagliptin drug called Onglyza.

Merck’s HIV drug raltegravir, sold under the brand name Isentress; and Bristol-Myers’ arthritis drug abatacept, sold as Orencia, according to the people.

The panel is also considering other drugs and it still isn’t clear which ones will be shortlisted, the people said.

Patents provide Merck with the incentive to assume the risks associated with drug discovery, the Whitehouse Station, New Jersey-based company said in an e-mailed response to questions. “We encourage the government of India to reassure investors that India respects and values innovation and the protection of intellectual property.”

Bristol-Myers in an e-mailed statement said it is “deeply concerned with the deteriorating protections for patented innovative medicines in India” and will continue to act to protect its intellectual property rights.

Any recommendations will still need the government’s approval. The panel’s proposals will be submitted to the Department of Industrial Policy and Promotion, which will make a decision on whether compulsory licenses can be awarded.

India’s Controller General of Patents, Designs and Trademarks will then need to sign off on the compulsory licenses. Following that, a generic drugmaker could require the patent holder to grant it a license to make a copy in India.

Medical Needs

Besides boosting the domestic generic drug industry, cheaper copies of blockbuster medicines would help India meet the needs of low-income citizens.

Diabetes afflicts 65 million Indians, according to the International Diabetes Federation. The country has an estimated 2.1 million people living with HIV, according to the Joint United Nations Programme on HIV/AIDS.

The committee recommended compulsory licensing for dasatinib, a Bristol-Myers therapy for chronic myeloid leukemia sold under the brand Sprycel, last year, the people said.

Any award of compulsory licenses will take time because the process is fraught with bureaucracy, said Leena Menghaney, a patient advocate at Doctors Without Borders in New Delhi. India also is worried about its international image, she said.

The U.S. International Trade Commission said in August that it would investigate “Indian policies that discriminate against U.S. trade and investment” at the request of the House Committee on Ways and Means and the Senate Committee on Finance.

Trade Relationship

“What the Indian government is really worried about is the court cases that will follow from drug companies,” Menghaney said. “It’s worried about the international criticism it will face from developed country governments who back their pharmaceutical companies, and the impact it will have on the India-U.S. relationship.”

Roche decided not to pursue Indian patents for its breast cancer medicine Herceptin because of the Indian intellectual property environment, the company said in an e-mailed statement in August. It introduced a lower-cost Herceptin packaged by a local drug company for the Indian market in 2012.

Under India’s patent laws, compulsory licenses can be awarded for some products still under patent if the original isn’t available locally at a reasonable price.

Natco Pharma Ltd. (NTCPH) applied directly to India’s patents office and was awarded the nation’s first compulsory license in March 2012 to make a copy of Bayer’s Nexavar cancer drug at a 97% discount to the original product.

In March last year, Bayer lost its bid to stop Natco from making the generic drug and is appealing the decision at the Mumbai High Court.

Bayer Chief Executive Officer Marijn Dekkers called the compulsory license “essentially theft.”

“We did not develop this medicine for Indians,” Dekkers said Dec. 3. “We developed it for western patients who can afford it.”

To contact the reporter on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net

Bayer Pharmaceutical CEO: Cancer drug only ‘for western patients who can afford it’

Scott Kaufman posted this January 26, 2014
bayer ceo
In an interview with Bloomberg Businessweek, Bayer CEO Marijn Dekkers said that his company’s new cancer drug, Nexavar, isn’t “for Indians,” but “for western patients who can afford it.”

The drug, which is particularly effective on late-stage kidney and liver cancer, costs approximately $69,000 per year in India, so in March 2012 an Indian court granted a license to an Indian company to produce to the drug at a 97 percent discount.

Bayer sued Natco Pharma Ltd., but in March of last year, the High Court in Mumbai denied its appeal.

Bayer CEO called the compulsory license issued by the Indian court “essentially theft,” then said “[w]e did not develop this medicine for Indians…[w]e developed it for western patients who can afford it.”

Nexavar costs approximately $96,000 per year in the United States, but Bayer assures “western patients” that they can have access to the drug for a $100 copay.

The United States International Trade Commission said that it will investigate “Indian policies that discriminate against U.S. trade and investment,” and despite the High Court’s decision, many in the Indian government are worried about the effect it will have on U.S.-India relations.

In an e-mail to Bloomberg Businessweek, Bristol-Meyers Squibb said that it is “deeply concerned with the deteriorating protections for patented innovative medicines in India.” The court cases that could ensue could tie up the Indian legal system in a manner that makes it impossible for doctors in the country to acquire any version of the drugs at any cost.

[Image of Bayer CEO Dekkers via 2010 Annual Report]

Scott Kaufman
Scott Kaufman
Scott Eric Kaufman is the proprietor of the AV Club’s Internet Film School and, in addition to Raw Story, also writes for Lawyers, Guns & Money.
He earned a Ph.D. in English Literature from the University of California, Irvine in 2008.
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