Loosing battle- The patent issue

The global pharmaceutical giants are increasingly getting drawn into a tangle of expensive legal challenges and strong opposition from governments of developing countries over safety of drugs and patent protection they have been enjoying for years.

These governments are also being pressurized by several patient groups and social organizations to take tough stand against pharmaceutical giants over monopoly prices. No industry is facing this kind animosity from its consumers and governments these days.

The crux of the issue is the pricing of patented drugs. Most advanced drugs for cancer, HIV, diabetes, cardiovascular diseases and neurological disorders are under patent and are blockbusters with very high price tags. As most of these life style diseases are also affecting middle class and poor people today their monopoly prices obviously come under public scrutiny. The governments of developing countries cannot ignore suffering of millions of their people afflicted by these deadly diseases when the drugs for such ailments are being sold at highly unaffordable prices.

This is exactly what has happened in Thailand & Brazil and is likely to happen in India too. The Thai government issued compulsory licenses on three drugs a few months ago. That allowed Thailand to import affordable, safe and effective generic versions of the patented drugs from other countries or produce them on their own through their Government Pharmaceutical Company. The first license was issued on November 29, 2006 for the HIV/AIDS medicine, efavirenz a patented drug of Merck and sold by the brand name of Storcin. This was followed by additional compulsory licenses on January 26, for the heart disease drug clopidogrel, a patented drug of sanofi-aventis which sells it by the brand name of Plavix and another HIV/AIDS drug, lopinavir/ritonavir sold by Abbott under the brand name Kaletra.

Thailand has made very clear to the global pharmaceutical industry that it will continue to break patents until prices for AIDS medication come down significantly. Thailand's action was followed by Brazil with the President signing a decree awarding compulsory licensing for efavirenz early this year. It is quite possible that India may also go for compulsory licensing route in case of Gleevec to make available this cancer medication affordable to several lakhs of Indian patients. Novartis is engaged in a court case over its patent.

Officials in India's health ministry are seriously considering this option in the wake of the widespread support to Thailand's steps and pressure from the public interest groups in India.Top pharmaceutical companies are furious over these developments. But they are helpless as powerful patient groups and NGOs in the US and Europe are also getting extremely vocal on monopoly pricing of essential drugs.

It is true that compulsory licensing is meant to be used only as a last resort and TRIPS allow it under limited circumstances, such as national health emergencies, and after lengthy efforts to negotiate prices with firms. And most of these life style diseases are hitting the populations like epidemics leaving no options to the governments but to act fast. That apart, a large number of patent claims for drugs are for incremental innovation. There is no justification for patent authorities to grant a 20-year patent when the product is nothing new in terms of efficacy and safety.

Ongoing patent litigations over Lipitor, Caduet, Gleevec and many others are over the novelty issue. The global pharmaceutical industry should therefore realize that their pricing of so called patented products need to be on the basis of realistic costs and reasonable profits. Otherwise, the whole edifice of patent system in pharmaceutical industry may collapse.

pharma Biz