India Adds Compulsory Drug Licenses

The Indian government is aggressively regulating the price of widely used cancer drugs—a measure that may help some patients and the country's domestic drug industry in the short term but may end up denying those with rare conditions access to life-saving medications, economists say.

In mid-January, the government granted compulsory licenses for 3 cancer drugs, including the breast cancer agents Herceptin (trastuzumab; Genentech/Roche) and Ixempra (ixabepilone; Bristol-Myers Squibb) and the leukemia therapeutic Sprycel (dasatinib; Bristol-Myers Squibb). The licenses allow Indian companies to make and sell generic versions of the drugs below the market rate.

“Sprycel and Ixempra are protected by patents granted by the Indian Patent Office,” responds a Bristol-Meyers Squibb spokesperson. “Bristol-Myers Squibb has and will continue to pursue all appropriate avenues to protect its intellectual property rights in India.”

Roche “has taken steps to increase access to a number of our drugs in India, including Herceptin,” comments a spokesperson. Last year, Roche reportedly cut the cost of Herceptin and MabThera (rituximab) in India, renaming them for the local market and packaging them there.

Compulsory licenses and other efforts to rein in medication costs are good for generic manufacturers in India and for middle-class patients, who will now be able to afford a drug they might not have been able to afford otherwise, says Ernst R. Berndt, PhD, a professor of applied economics at Massachusetts Institute of Technology's Sloan School of Management in Cambridge.

But as India gets wealthier, “I think it's going to be more and more of a problem,” he says. “A lot of Western companies have not attempted to sell their drugs in India knowing it would likely be genericized.”

As a result, drugs that are aimed at a smaller market than blockbusters like Herceptin do not reach the country at all, says Berndt.

Roger Bate, PhD, a resident scholar at the American Enterprise Institute in Washington, DC, is more critical of the Indian government, pointing out that in addition to compulsory licenses for patented drugs, the government has denied patent approvals for Bayer, Gilead, Novartis, Pfizer, and Roche products that are now in litigation. The government's policies, he says, are “creating antagonism and lowering foreign investment.”

Bate suggests that the Indian government should do more to clarify its regulations and that focusing solely on the price of drugs will drive production costs too low, sacrificing drug safety. Even artificially low prices are too expensive for many people in India, where the per capita annual income is about $1,000.