By Daniele Dionisio*

Under WTO rules, Indian generic companies are forbidden, since 1 January 2005, to roll out medicines for which patents have been granted in India. (PDF) But, under Section 3(d) of its 2005 Amended Patents Act, India is free to reject patent applications to any new forms of old medicines unless therapeutic efficacy has increased significantly. And earlier from 1 January 1995, a mailbox facility was put in place in India to receive product patent applications. In cases where Indian companies were already rolling out these products before 1 January 2005, they can continue to produce under Section 11A(7), against “reasonable royalty”. Yet, despite these safeguards, unaffordable prices are being charged by multinational corporations (MNCs) for lifesaving new patented drugs, whose imports are on the rise in India. The brand industry is eagerly looking to India as a fast-growth market where 300 million people can afford out-of-pocket spending on healthcare and the rising wealth is contributing to increased rates of chronic diseases. And pharmaceutical sales are expected to reach US$30 billion by 2020 in India, compared with $11 billion in 2009, according to PricewaterhouseCoopers forecasts.

The MNCs are investing nonstop in acquisitions of firms and takeover deals in India, as a strategy whereby lower prices applied to end products are offset by lower manufacturing, distribution and marketing costs. They are selling branded drugs to Indian customers at lower-than-Western prices, while licensing cheap therapies from local firms (the so-called branded generics) to build portfolios of low-cost medicines. These moves are concerning now that U.S.-promoted, end-stage ACTA and TPPA deals are charged, in India and elsewhere, with being “closed-doors” initiatives (read here, here and here):

  • making it easier to patent new forms of old medicines that offer no added therapeutic efficacy (“evergreening” strategy).
  • restricting “pre-grant opposition” that allows a patent to be challenged before it is being granted.
  • preventing drug regulatory authorities from approving new drugs if they could potentially infringe existing patents.
  • enforcing beyond WTO requirements and obligations (i.e., by extending patent length, allowing customs officials to impound shipments of drugs on mere suspicion of intellectual property (IP) infringement, or by going beyond owners data protection against unfair commercial use).

Not to mention fear that terms threatening access to medicines could be close to an approval inside an EU-India deal on track to conclusion. These include an “investor-state mechanism” that would allow the private sector to challenge governments’ actions on the grounds of harm to their investment expectations – Read more here. These realities mean a threat to India as a provider of lifeline medicines to the poor’s world. But things may change now that  India’s government is  steaming ahead against multinational companies’ control, as the imatinib and sorafenib cases tell us.




Under Section 3(d) Amended Patents Act, in 2006 India refused a Swiss Novartis patent application for cancer drug imatinib mesylate (Glivec®) on the grounds of failure to demonstrate therapeutic efficacy enhancement. And, consistently with other “evergreening” decisions, subsequent Novartis appeals were ultimately rejected – Read here and here. Currently, while Novartis is challenging the interpretation of Section 3(d) with a new appeal to be heard next July in India’s Court, cheap imatinib mesylate copies are being produced by Indian companies Natco Pharma and Cipla.

On 9 March 2012, India granted its first compulsory license (CL) by ruling against German Bayer cancer drug sorafenib tosylate (Nexavar®) on the grounds of failure to make it accessible to an adequate extent. Compulsory licensing is when, under WTO rules, a government allows someone else to produce a patented product or process without the consent of the patent holder. The March decision is remarkable and goes against diminished CL activity worldwide. As per its terms, Indian company Natco Pharma will roll out a generic sorafenib tosylate in India at no more than US$178 per month (one thirtieth of Bayer price), while giving for free to at least 600 patients yearly. In reply, Bayer has filed an appeal with India’s IP Appellate Board, to be heard in Court on 21 August 2012. Meanwhile, the Mumbai-based generic drug maker Cipla Ltd, decided in May to slash the price of its generic version of sorafenib by nearly 76 per cent (US$125 per month, even cheaper than Natco).



India’s moves would be maximized should competitive market and incentives to drug development be enhanced. Besides tax reliefs, R&D grants and public spending priority reallocations, India’s government should strengthen the national program to reverse “brain drain”, and step up partnerships with emerging economies to expand market, earn inexpensive regulatory approvals and cut drug development costs – Read here and here. As a key party to overall balance in the Asia-Pacific Region, India has “greater say” today to make these prospects happen. And measures to foster links with African countries were agreed at an India-Africa meeting in New Delhi last March. These included capacity building, innovation for development and knowledge transfer for health care.

*Daniele Dionisio is a member of the European Parliament Working Group on Innovation, Access to Medicines and Poverty-Related Diseases; head of the research project Geopolitics, Public Health and Access to Medicines (GESPAM); and an advisor for the Italian Society for Infectious and Tropical Diseases (SIMIT).

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