Manufacture and trade of life saving generic drugs

A landmark judgement has been given in India paving the way for Indian drug manufacturers to manufacture life saving drugs at more affordable prices. The Indian Patent Office announced last week that it has issued its first compulsory license to an Indian generic drug manufacturer to manufacture for the domestic market, a drug which has so far been imported under the name Nexavar – which is the brand name for the drug – sorafenibtosylate. This is an anti cancer drug for which the German company- Bayer had been issued an importing license to produce the patented product or process.

Bayer had been granted the patent on the drug in 2008. Bayer had claimed that its sales of the drug had been undermined by CIPLA – a domestic manufacturer of generic drugs, marketing a similar drug and sued CIPLA for infringement. With this decision a low cost version of the anti cancer drug manufactured by CIPLA can be marketed locally.

NOVARTIS, another foreign drug manufacturer is also fighting the rejection of a patent on another anti cancer drug being manufactured. With such cases coming up in India and the domestic manufacturers of generic drugs becoming more and more capable, this landmark decision assumes much significance.

In 2011, India was the world’s third largest manufacturer by volume with the domestic market reaching $12.2 billion. With over a billion population, the domestic market for any drug is most attractive and the high prices of imported drugs manufactured in the West has paved the way for local generic drug manufacturers to manufacture and market generic drugs and some of the better known drug manufacturers In India have successfully captured the local market with cheaper versions of imported drugs.

In order to comply with the WTO Agreement on Trade Related Intellectual Property Right (TRIPS), India has been issuing patents for drugs since 2005. Clauses in the TRIPS Agreement provide for compulsory licensing if procedures and conditions laid down in the Agreement are fulfilled.

Since India commenced manufacturing generic drugs at cheaper prices, and exporting to other developing countries such as those in the African continent, she has had to face  obstructions such as consignments being held up at  European ports on various grounds and the issue has been a subject of discussion at many a WTO meeting. This important decision will have implications not only for Bayer, but other Western drug manufacturers who are selling highly priced drugs in developing countries. In the first instance, the decision would encourage other generic drug manufacturers to request compulsory licensing for patent protected medicines if the patents rights holder is unable to supply at affordable prices and in necessary quantities. Experts are also of the view that it could potentially encourage generic drug manufacturers in other developing countries to take similar measures which so far had been limited to HIV drugs mostly.

The Indian Patents Act provides for any person to request a compulsory license if after three years from the date of granting the patent, the needs of the public to be covered by the invention have not been satisfied, the invention is not available to the public at an affordable price or the patented product is not “worked in” or manufactured in the country to the fullest extent possible. According to the Indian Patents office decision, Bayer did not begin importing the drug to India in 2008 and only small quantities of the drug was made available during the next two years.

The implications of this decision will be far reaching in many ways in the years to come. It also goes to prove that in today’s world, developing countries are in a position to challenge the West in many areas which were in the past dominated by the developed countries. It also means that the not so affluent will also have a chance to live longer with access to more affordable drugs.