The Government needs to bring in an automatic system for compulsory licensing if it wants to make medicines both affordable and accessible, said drug maker Cipla’s Chairman and Managing Director, Y.K. Hamied.

“There should be an automatic license of right and the patent holder of valid patents should receive a reasonable royalty of four per cent on net sales,” he said, addressing shareholders on Friday.

A compulsory license (CL) allows a drug company to make a chemically-similar version of an original drug, on the payment of royalty to the original innovator company. India had earlier this year issued the country’s first CL to Hyderabad-based Natco, allowing it to make Bayer’s advanced kidney cancer drug Nexavar, on the payment of six per cent royalty.

Lauding the development as significant, Hamied said, “It clearly indicates that monopoly drugs that are under the patent can be produced by indigenous generic manufacturers at accessible prices and that this should be allowed with a payment of suitable royalties to the innovator.”

Later, speaking to the media, he added, Canada had brought in a system where any healthcare product could be copied with a royalty payment of four per cent. India should make a beginning with medicines in the anti-cancer, anti-AIDs or tuberculosis segment, he said.

Cipla had dropped prices on three cancer drug prices earlier this year. Hamied indicated that another six medicines were being evaluated for similar price cuts.

Outlining Cipla’s growth plans, he said a greater international footprint was the key to its growth in the future.

The company has put in place a team in Europe and a similar set up was being put in place in the US market, as well, he said.

For the company’s biotech venture, he said a dedicated manufacturing facility has been set up in Goa, but the rules for bio-similar products are still not clear in the country.

With a turnover of over Rs 7,000 crore and profits of Rs 1,100 crore, he said, the company was targeting a turnover of Rs 10,000 crore in a few years.

(This article was published on August 17, 2012)
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