Asia is becoming a danger zone for pharma's intellectual property. On the heels of India's first compulsory licensing move, Indonesia has nixed patent protection on 7 HIV fighters and hepatitis drugs. The move would open the gates to cheap generic rivals, expanding access--and cutting into sales of pharma's brand names.
According to a release from Public Citizen, Indonesian President Susilo Bambang Yudhoyono signed a decree authorizing copycat versions of key HIV drugs, including GlaxoSmithKline's ($GSK) Ziagen (abacavir), Merck's ($MRK) Sustiva (efavirenz), Abbott Laboratories' ($ABT) Kaletra (lopinavir + ritonavir), and Gilead Sciences' ($GILD) Truvada (tenofovir + emtricitabine) and Atripla (tenofovir + emtricitabine + evafirenz).
Compulsory licensing--in which governments order drugmakers to allow copycat versions of their patented drugs--is allowed under the World Trade Organization's rules, provided there's a public-health emergency. As Public Citizen notes, Indonesia's move appears to be the biggest single use of this power since the WTO set the rules in 1995.
Public Citizen figures that Indonesia's move could prompt other countries to do the same. That remains to be seen, but pharma sees its patents under threat around Asia, in markets where companies are hoping for quick growth. India just authorized its first compulsory license--for Natco Pharma's knockoff version of Bayer's cancer drug Nexavar--and drugmakers worry there's more to come. Meanwhile, China just amended its own laws to allow for compulsory licensing.