As compulsory licensing spreads, drugmakers adapt

There is the concept associated with evolution that you must adapt or die. Now some experts are suggesting the same thing for drugmakers when it comes to the growing threat of compulsory licensing.

Now that China is following India into this realm, which allows countries to essentially strip companies of patents if they deem it in the public interest, the tension among big drug developers is rising. LiveMint quotes a research company in the U.K. saying the research-oriented companies "will have to restructure their business plans in emerging markets," to compete. Strategies will include making their drugs cheaper themselves in the countries where the threat of compulsory licensing exists and making sure they are available to more poor patients to cut off the incentive to invoke the maneuver.

China's move comes after India recently caused a dust-up by compelling Bayer to license its cancer drug Nexavar to Natco Pharma, which promised to sell its copycat version for $176 per month, compared with Bayer's $5,600 monthly price. The Indian genericsmaker had been petitioning for the compulsory license for years, and soon after it launched its version, Cipla, another domestic drugmaker, said it would sell its own copy at an even lower price.

And more countries with large poor populations and limited government funds for public health, like Brazil, are expected to move in this direction.

Companies are generally trying to put a positive face on the matter. A Roche ($RHHBY) spokesman tells LiveMint that it is trying pilot programs in different countries "to improve access." But he added, "We do, however, vigorously defend our intellectual property, as we believe this is a fundamental precondition for researching new medicines that can save and improve patients' lives."

That said, Roche cut the price in India on three of its cancer drugs  shortly after India's move to invoke the compulsory license provision.

- read the LiveMint story

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