An urgent prescription
💥India needs to shore up public sector capacity for making medicines
India is rightly acclaimed to be the pharmacy of the world, with its huge private sector capacity for producing branded and unbranded generic drugs. Much of this growth took place after India opted for process patenting over product patenting in 1970. This changed to a product patent regime in 2005, providing sufficient time for growth of the generic drug industry in the private sector. However, this period has also seen the decline and near disappearance of public sector capacity for manufacture of drugs and vaccines. That is a cause for worry.
👉Beyond profit motive
Public sector capacity for manufacture of essential drugs and vaccines is very much needed to ensure that our population is not denied access to drugs that the Indian private sector is unable to produce or supply at affordable cost. These include drugs where compulsory licences may need to be issued by the government for patent protected drugs or even off-patent drugs which are commercially unattractive to private manufacturers. Compulsory licensing (CL) is a mechanism permitted by the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement to enable countries to issue licences to domestic drug manufacturers to produce and market affordable generic versions of life-saving drugs needed for meeting serious public health challenges that are of extreme urgency. This allows countries to overcome patent restrictions to assure availability of such drugs when the situation demands. Drugs effective against multi-drug resistant tuberculosis and anti-cancer drugs are clear examples of such a need, which should be addressed through compulsory licensing. The World Health Organisation (WHO) has now invited expressions of interest from drug manufacturers to produce generic versions of two effective but expensive anti-tubercular drugs, bedaquiline and delamanid. Patients with drug-resistant TB require a combination of both these drugs.
India has used the CL route previously to permit two Indian companies, Natco and Cipla, to produce a potent anti-cancer drug nexavar. This enabled a 32-fold reduction in the cost of the drug. However, extensive litigation followed with action initiated by Bayer, the multi-national manufacturer of the patented version. This appears to have dampened the appetite of private drug manufacturers to avail of the CL route for the manufacture of generic versions of the new anti-tubercular drugs. While both Indian and global demand for these drugs is very high, will the Indian pharma respond? The experience of price negotiation with the patent-holding companies is not encouraging, if they do not see evidence of a government’s intent to use the CL route as an imminent possibility.
If the domestic private sector drug manufacturers are not ready to apply for CL, for whatever reason, public sector capacity to seek and utilise such licences becomes indispensable. With the acquisition of Indian drug companies by foreign manufacturers, or ‘strategic alliances’ which place shackles on the Indian partners, public sector capacity for manufacturing life saving drugs under a CL is the much needed fall-back option. Similarly, drugs for neglected tropical diseases are of little interest to the commercially driven private drug industry. Active pharmaceutical ingredients (APIs), which are needed for drug manufacture (formulation), are now mostly imported from China. This makes India highly vulnerable to disruptions in supply and cost escalations in import. National security demands that we develop both public and private sector capacity within the country, with suitable government support and incentives, to ensure uninterrupted and inexpensive availability of APIs.
The High Level Expert Group Report on Universal Health Coverage for India (2011) clearly articulated the need for strengthening public sector units (PSUs) which have drug manufacturing capability. The report stated: “The use of PSUs will offer an opportunity to produce drug volumes for use in primary and secondary care facilities as well as help in ‘benchmarking’ drug costs. The existence of PSUs would also provide an opportunity to utilise the provision of Compulsory Licensing under TRIPS.” Effective implementation of the Ayushman Bharat initiative calls for investment in expanding public sector capacity for producing essential drugs and APIs, even as the domestic private sector is incentivised to offer quality assured generics at a lower cost through a policy of pooled public procurement. This also embodies the spirit of Make in India.
👉Ensuring universal access
A report of the UN High Level Panel Access to Medicines (2016) called upon countries to safeguard and fully utilise the rights conferred by the TRIPS flexibilities as confirmed by the Doha Declaration of the WTO. The UN report also urges member states of WTO to adopt a permanent revision of Paragraph 6 of the TRIPS agreement to enable “swift and expeditious export of pharmaceutical products produced under compulsory license”. India should take the lead in ensuring universal access to affordable drugs through such measures. Investment in public sector capacity is essential to ensure that the country can exercise that leadership even on occasions when the private pharmaceutical sector does not fully align with that objective.
India is rightly acclaimed to be the pharmacy of the world, with its huge private sector capacity for producing branded and unbranded generic drugs. Much of this growth took place after India opted for process patenting over product patenting in 1970. This changed to a product patent regime in 2005, providing sufficient time for growth of the generic drug industry in the private sector. However, this period has also seen the decline and near disappearance of public sector capacity for manufacture of drugs and vaccines. That is a cause for worry.
👉Beyond profit motive
Public sector capacity for manufacture of essential drugs and vaccines is very much needed to ensure that our population is not denied access to drugs that the Indian private sector is unable to produce or supply at affordable cost. These include drugs where compulsory licences may need to be issued by the government for patent protected drugs or even off-patent drugs which are commercially unattractive to private manufacturers. Compulsory licensing (CL) is a mechanism permitted by the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement to enable countries to issue licences to domestic drug manufacturers to produce and market affordable generic versions of life-saving drugs needed for meeting serious public health challenges that are of extreme urgency. This allows countries to overcome patent restrictions to assure availability of such drugs when the situation demands. Drugs effective against multi-drug resistant tuberculosis and anti-cancer drugs are clear examples of such a need, which should be addressed through compulsory licensing. The World Health Organisation (WHO) has now invited expressions of interest from drug manufacturers to produce generic versions of two effective but expensive anti-tubercular drugs, bedaquiline and delamanid. Patients with drug-resistant TB require a combination of both these drugs.
India has used the CL route previously to permit two Indian companies, Natco and Cipla, to produce a potent anti-cancer drug nexavar. This enabled a 32-fold reduction in the cost of the drug. However, extensive litigation followed with action initiated by Bayer, the multi-national manufacturer of the patented version. This appears to have dampened the appetite of private drug manufacturers to avail of the CL route for the manufacture of generic versions of the new anti-tubercular drugs. While both Indian and global demand for these drugs is very high, will the Indian pharma respond? The experience of price negotiation with the patent-holding companies is not encouraging, if they do not see evidence of a government’s intent to use the CL route as an imminent possibility.
If the domestic private sector drug manufacturers are not ready to apply for CL, for whatever reason, public sector capacity to seek and utilise such licences becomes indispensable. With the acquisition of Indian drug companies by foreign manufacturers, or ‘strategic alliances’ which place shackles on the Indian partners, public sector capacity for manufacturing life saving drugs under a CL is the much needed fall-back option. Similarly, drugs for neglected tropical diseases are of little interest to the commercially driven private drug industry. Active pharmaceutical ingredients (APIs), which are needed for drug manufacture (formulation), are now mostly imported from China. This makes India highly vulnerable to disruptions in supply and cost escalations in import. National security demands that we develop both public and private sector capacity within the country, with suitable government support and incentives, to ensure uninterrupted and inexpensive availability of APIs.
The High Level Expert Group Report on Universal Health Coverage for India (2011) clearly articulated the need for strengthening public sector units (PSUs) which have drug manufacturing capability. The report stated: “The use of PSUs will offer an opportunity to produce drug volumes for use in primary and secondary care facilities as well as help in ‘benchmarking’ drug costs. The existence of PSUs would also provide an opportunity to utilise the provision of Compulsory Licensing under TRIPS.” Effective implementation of the Ayushman Bharat initiative calls for investment in expanding public sector capacity for producing essential drugs and APIs, even as the domestic private sector is incentivised to offer quality assured generics at a lower cost through a policy of pooled public procurement. This also embodies the spirit of Make in India.
👉Ensuring universal access
A report of the UN High Level Panel Access to Medicines (2016) called upon countries to safeguard and fully utilise the rights conferred by the TRIPS flexibilities as confirmed by the Doha Declaration of the WTO. The UN report also urges member states of WTO to adopt a permanent revision of Paragraph 6 of the TRIPS agreement to enable “swift and expeditious export of pharmaceutical products produced under compulsory license”. India should take the lead in ensuring universal access to affordable drugs through such measures. Investment in public sector capacity is essential to ensure that the country can exercise that leadership even on occasions when the private pharmaceutical sector does not fully align with that objective.
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