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India may move away from compulsory licensing Posted 15/03/2013

The Indian Government, in a move that goes away from recent decisions, has suggested that the prices of patented pharmaceutical drugs be controlled by linking them to the country’s per capita income rather than by issuing compulsory licences.

The Department of Pharmaceuticals (DOP) in its new draft policy on price negotiation for patented drugs has suggested that once patented drugs are regulated by the government, the provision to issue compulsory licences on the basis of unaffordability of drugs will not be possible.

In its draft policy the DOP has stated that ‘once a government appointed committee goes for some form of price regulation of patented medicines and fixes a price of the medicines which is accepted by the government, this fixed price would be supposed to be reasonable and hence it will not be possible for the government to use the tool of compulsory licence on the ground of reasonableness of the price of the patented medicine.’ However, it added that the provision for issuing compulsory licences on other grounds, apart from price, will still remain.

India issued its first compulsory licence in March 2012, allowing India-based drugmaker Natco Pharma to launch a generic version of Bayer’s liver and kidney cancer drug Nexavar (sorafenib).

Current pricing control in India is based on production costs for drugs and covers 74 active pharmaceutical ingredients (APIs) and about 1,577 finished formulations in the country’s National List of Essential Medicines.

The new policy by the DOP aims to ensure the availability of essential medicines, i.e. those on the National List of Essential Medicines, at reasonable prices, while still providing sufficient opportunity for innovation and competition to support the growth of industry.

Editor’s comment
Is the Indian Government going down the right path with this proposal?  Is compulsory licensing in India a better way to ensure access to essential medicines?

Please feel free to share your thoughts via email or in the comments section below. Should India keep the compulsory licensing policy? Or is it making the right decision to move toward pricing controls instead?

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1.  GaBI Online - Generics and Biosimilars Initiative. Indian government issues first compulsory licence [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2013 Mar 15]. Available from: www.gabionline.net/Generics/General/Indian-Government-issues-first-compulsory-licence

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Source: DOP, The Economic Times India

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