Ali Lotfizadeh
Mar 15, 2012

The battle over pharmaceutical patents and the Indian drug market

A man poses with packets of Sorafenib at the head office of Natco in southern IndiaIn the late 1990s, Novartis manufactured and patented imatinib (with the brand name Gleevec), a drug that prolongs life in patients with chronic myelogenous leukemia (CML).  Since its release, imatinib has offered hope for patients suffering from (CML); however, many in developing countries have been unable to afford the patented drug because of its high cost.  This problem of access to life-saving medications in developing countries is not unique to imatinib -- lack of infrastructure and low income limit access to many drugs. Furthermore insufficient insurance coverage means that approximately 80 percent of pharmaceuticals are purchased through out of pocket payments in the developing world. 

Developing countries have responded to problems of access in different ways including the production of generic versions of patented medications at a fraction of their original cost. In the case of imatinib, the Indian government recently stirred controversy by denying the Novartis patent and granting permission to an Indian pharmaceutical company to produce generic imatinib. Novartis has sued the Indian government for denying its patent and the Indian Supreme Court is preparing to hear arguments. 

Novartis defends its position by arguing that revenue generated from patents is necessary for future research and innovation. They offer imatinib to some low-income countries with special discounts and provide free versions of the drug through special programs. In conjunction with The Max Foundation, Novartis has established the Gleevec International Patient Assistance Program (GIPAP), providing the drug at no cost to eligible patients in low-income countries. A recent study on the effectiveness of GIPAP demonstrated a significant positive impact on access to the medication and favorable survival rates. Some critics argue however, that many patients with life-threatening leukemia who are in need of the medication do not meet eligibility criteria for participation in GIPAP and cannot afford the discounted version of the medication offered by Novartis. 

Pharmacists at a Natco manufacturing facilityControversy like this is not limited to Novartis and imatinib.  This week the Indian government authorized Natco Pharma, an Indian pharmaceutical company, to manufacture a generic form of the Bayer cancer drug Nexavar. Unlike imatinib, in this case the Indian government used a compulsory license to grant permission to the pharmaceutical company to manufacture the drug. A compulsory license is part of the World Trade Organization’s agreement on drugs that allows developing countries to manufacture generic forms of a medication, when the brand form is unaffordable to its citizens. According to the statutes of the compulsory license, Natco will create generic Nexavar -- known as sorafenib -- but will have to pay 6 percent in royalty fees to Bayer. The generic form of the drug will be sold for $176 a month, a significantly cheaper price than the brand version Nexavar, which costs $5,600 a month. As with imatinib, protectors of patent laws argue that compulsory licensures create a slippery slope that allows generic manufacturing of many patented drugs, thereby decreasing revenue for patent holding companies and impeding the future of drug development research. 

One of the main bodies responsible for establishing laws surrounding international drug patents is the World Trade Organization (WTO). In 1995, the WTO established the trade-related aspects of intellectual property rights (TRIPS), an international agreement delineating standards meant to protect intellectual property for manufacturers including holders of pharmaceutical patents. TRIPS has led to patent rights for drugs in the international market, which have kept the price of drugs high.  But TRIPS does offer flexibilities meant to promote access to medications in resource limited settings including compulsory licensing like that granted by the Indian government for Bayer's Nexavar, wherein the government of a country grants a license to a pharmaceutical company to produce generic forms of a patented drug. With a compulsory license, a company may make generic versions of a drug but the patent holder must be compensated by “adequate remuneration.”

A Natco employee at their facility in Hyderabad, IndiaFollowing the TRIPS agreement, a round of negotiations in Qatar in 2001 led to the Doha declaration, which further advocated the interpretation of TRIPS in such a way as “to promote access to medicines for all.”  The Doha declaration states that TRIPS standards should not prevent countries from addressing public health crises and providing medications for those who need it. According to the WTO, the purpose of the Doha declaration is to ensure that governments understand the flexibilities implicit in TRIPS. In addition, the Doha declaration has granted permission for the export of generic drugs. Whereas before, countries were only allowed to use compulsory licensure to supply domestic needs, after the Doha declaration, manufacturers of generic pharmaceuticals can export drugs to countries that do not have the means to produce the drug.   

Advocates of intellectual property rights maintain that protection of patents promotes discovery, innovation and research. In addition, they worry that generic drugs manufactured in developing countries may fall in the wrong hands and be smuggled into developed nations. Pharmaceutical Research and Manufacturers of America (PhRMA), a trade group representing the pharmaceutical industry in the United States, has expressed concern that developing countries are taking advantage of compulsory licensure to establish a generic drug-making industry. Supporters of generic drug manufacturers including many non-governmental organizations involved in international public health state that the epidemiological transition in recent years has led to an increasing burden of chronic non-communicable diseases in developing countries. They argue that the only way to ensure sufficient access to medications for these conditions is the production of generic medications. The same is true for medications against infectious diseases like HIV and tuberculosis. According to Doctors Without Borders, 80 percent of the drugs it supplies to fight AIDS in Africa are generic medications made in India. 

It remains unclear how the Indian Supreme Court will rule in the Novartis case or how these disputes will be settled in the long term. Reaching a middle ground will require further dialogue, the involvement of key stakeholders and effective partnerships between the pharmaceutical industry and patient advocates. The ultimate goal would be to arrive at some form of agreeable consensus on how to preserve pharmaceutical research and development while enhancing access to life-saving medications for marginalized populations. 


Kanavos, P. et al. Benefits of global partnerships to facilitate access to medicines in developing countries: a multi-country analysis of patients and patient outcomes in GIPAP.  Globalization and Health 2009, 5:19