On India trip, U.S. diplomat cites 'concern' about anti-patent actions

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U.S. Assistant Secretary of State Nisha Biswal--Courtesy of State.gov

Multinational companies want access to India's fast-growing drug market. India wants access to lower-cost meds for its impoverished and uninsured. And meeting in the middle has been a little rocky. One of India's solutions--compulsory licenses, which in effect toss out exclusivity rights--has ignited drugmakers' ire. And with an Indian committee currently assessing a batch of patented drugs as compulsory licensing candidates, the U.S. is fighting back--politely, at least so far.

As Reuters reports, India's committee is reviewing up to a dozen on-patent meds to see whether compulsory licenses can be issued, and U.S. Assistant Secretary of State Nisha Biswal told reporters in the Indian capital that there's concern over the protection of next-generation drugs and the continuation of development investments.

"I understand that India has issued one compulsory license, but there's a lot of concern about what additional licenses are being considered," she said.

And the U.S. won't necessarily sit idly by as drugmakers and governments battle it out. As Reuters notes, India appears on the U.S.'s Priority Watch List, a distinction for those countries whose IP protection practices Washington believes bear close monitoring. And if the U.S. takes a tougher tack, downgrading the nation to a Priority Foreign Country, it could spur possible actions--a move the Pharmaceutical Research and Manufacturers of America (PhRMA) has been pushing for.

The country's one compulsory license so far belongs to Indian generics maker Natco Pharma, which India granted the rights to produce a version of Bayer's Nexavar. The generic hit the market back in July 2012, and after the German pharma put up a long fight, an Indian appeals board rejected its appeal in 2013. The board called the drug essential, but priced beyond the reach of most Indians; at the time, copies ran at about $130 to $175 a month, compared with the $5,500-per-month sticker on Bayer's branded version. That's quite the chunk of change, considering that only 15% of India's 1.2 billion people have health insurance, according to Reuters.

But it's not just Bayer that has felt the pain over IP protection. Ranjit Shahani, vice chairman and managing director of Novartis' ($NVS) India unit, told the news service in an interview this week that "the constant threat of compulsory licenses hangs like a Damocles sword over patent-holders."

"Over the past two years, the government of India has issued several intellectual property decisions that disproportionately impact innovative biopharmaceutical companies," he said. "Not only is this a concern for business in the Indian market, but also in other emerging markets that may see India as a model to be emulated."

Drugmakers have already run into similar issues in China, for one: In 2012, the country created its own compulsory licensing law. Gilead ($GILD), whose HIV and hep B treatment Viread was pegged as a potential target, started offering the drug at a discount--only to see its patent invalidated last August.

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