Financial Daily from THE HINDU group of publications
Monday, Nov 15, 2004
Industry & Economy - Pharmaceuticals
Ministry planning pre-negotiation of patented drug prices
New Delhi , Nov. 14
EVEN as the Government gears up to put in place a product patent regime by introducing the Patent (Amendment) Bill, concerns about astronomical prices for patented drugs have cropped up. And the Ministry of Chemicals and Fertilisers is keen that adequate safeguards are in place to prevent arbitrary pricing.
Highly-placed officials in the Ministry said that one of the options being considered is to go in for pre-negotiation of prices for patented drugs. Currently, about 74 bulk drugs are under price control. "However, once the patent regime comes into effect, we must take steps to ensure that the patent-holder does not price the drugs very high. We want to ensure that these drugs are affordable and therefore one of the options being considered is pre-negotiation of prices," they said.
An appropriate authority may be appointed to look into the pricing issue.
This concern also gains significance because the Group of Ministers (GoM) looking into the Patents Bill has decided to scrutinise the 4,000-odd applications filed in the Mail Box facility.
The Indian pharmaceutical industry has been maintaining that less than 250 new drugs have been invented since 1995 and several applications aim at patenting pre-1995 molecules. Hence, patents for these molecules should not be granted, it said. But with the GoM deciding otherwise, several pharmaceutical companies would have to withdraw generic versions of the drugs.
"The GoM felt that companies are well aware of the change in Government policies and if generic companies have filed applications in the Mail Box, they have done so knowing fully what the consequences could be," said officials.
The Indian pharma industry has stated that drugs worth over Rs 3,000 crore would have to be withdrawn and this could lead to a price hike.
On the other contentious issue of compulsory licensing of drugs that are protected by patents especially during a national emergency, the GoM has decided to follow the Paris Convention Treaty on Intellectual Property Rights.
Under this, a cooling off period of three years is prescribed for the patent holder to launch the product. If the patent holder fails to do so, the Government can give the drug to another manufacturer under the compulsory licensing clause.
While the Chemicals and Fertilisers Ministry preferred the TRIPs agreement under which there is no cooling off period and compulsory licenses can be issued to manufacturers during an emergency, the Commerce Ministry was in favour of abiding by the Paris Convention Treaty.
"In the case of a national emergency, the law provides for Governments to procure drugs directly for distribution through hospitals. This could be done by allowing parallel imports and offering some duty concessions," they added.
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