E-DRUG: New Trade Union Initiative Statement - Compulsory licensing: Redefining a legal space for generic drug manufacturers
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NTUI Statement
Compulsory licensing: redefining a legal space for generic drug
manufacturers
The NTUI welcomes the landmark judgment by India’s patent office that on 12
March 2012 granted the first compulsory license since the creation of the
provision in the Patent Act in 2005. The NTUI sees this judgment as an
important step in the struggle for a sustainable public health system, to
which the Indian generic drug industry contributes significantly by
cheapening drug prices. This judgment is a step towards strengthening and
rejuvenating a weakened industry and the public health system.
The Controller of Patents granted the license to generic drug manufacturer
NATCO Pharma Limited in response to an application filed under Section 84
of the Indian Patents Act, 1970. The decision means that NATCO has the
right to produce and market life extending cancer medicine *sorafenib
tosylate* without the consent of Bayer at nearly 3% of the price that Bayer
was charging - Rs 8,800 per month instead of Rs 2.8 lakh per month -
against paying Bayer a royalty of 6% on net sales. The progressive
interpretation of Section 84 implicitly recognises the importance of public
interest over private right over knowledge and its use for profit
maximization. However, *sorafenib tosylate* still remains unaffordable for
the large majority of the working class, and therefore the NTUI considers
this judgment as opening the space for public policy measures on medicine
pricing. This of course requires the political will for a system of
universal access to affordable healthcare that includes reasonably priced
medicines.
The generic drug industry is meant to contribute to reducing prices of
medicines and widening their accessibility, which is necessary for a
sustainable public health system and the realisation of universal access to
health. Cheaper generic medicines are also necessary as a response to
predatory price setting measures adopted by monopoly companies. However,
the generic drug industry is facing a crisis following the legal changes
required as a consequence of India’s signing of the World Trade
Organisation (WTO) agreement on Trade-related aspects of intellectual
property rights (TRIPS). The introduction of product patents legally
rendered out of reach earlier spaces of production, including the
production of New Chemical Entities (NCE). This posed additional risks to
the profits of generic drug manufacturers since their activity might be
deemed illegal. An expression of the crisis faced by Indian generic drug
manufacturers is the new phenomenon of Indian manufacturers selling to
multinational pharmaceutical companies. Rejuvenation of the generic drug
industry will depend on the industry’s capacity to regain a legitimate
space and options for profitable ventures involving lower risks. By ruling
that a generic drug manufacturer has the legitimate right to produce a
generic version of a patented medicine, the judgment by the Indian Patent
Office recognises that, within the Indian law, the production of generic
medicines is legal and defines the framework that justifies this legality.
The NTUI believes this process will contribute to reinvigorating the
national generic drug industry, and welcomes this prospect.
The NTUI demands that the Government of India use the powers available to
it under Section 100 of the Patent Act, to issue notifications calling for
application by generic drug manufacturers for the grant of compulsory
licenses by the Patent Controller on specific drugs. The NTUI believes that
the development of the generic drug industry under the leadership of public
sector enterprises has to contribute to a sustainable public health system.
It is about time government addresses industrial policy for the
pharmaceutical industry that is integrated with public health policy.
Workers in the industry will play a key role in ensuring the contribution
of the industry to the public health system and the integration of
industrial policy and public health policy.
Ashim Roy
General Secretary
23 April 2012
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New Trade Union Initiative (NTUI)
B-137, First Floor, Dayanand Colony,
Lajpat Nagar IV,
New Delhi 110024
Telephone: +91 11 26214538
Telephone/ Fax: +91 11 26486931
Email: secretariat@ntui.org.in
Website: http://ntui.org.in