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India's Pharmaceutical Industry Denies Patent Law Changes Will Drive Up AIDS Drug Prices, Reduce Availability

The pharmaceutical industry in India says AIDS activists are raising a false alarm about the effects of proposed patent law changes in India. The activists say the changes would bring higher prices for AIDS drugs manufactured in India and reduce competition. But drug company representatives say that’s not the case.

Groups such as Doctors Without Borders and Health Gap say proposed changes in India’s patent laws would have a major effect on pricing and availability of AIDS drugs.

But those representing the pharmaceutical industry in India say the availability of drugs would not diminish - and African countries would not be forced to pay high prices.

Krishna Sarma is a patent attorney and head of Corporate Law Group in New Delhi. Her firm represents the pharmaceutical industry. She does not expect quick parliamentary action on the patent legislation.

She says, "First of all, it’s not as if January 1, 2005 is in some way a watershed, immediately. It’s not. Because what it really means is we have our parliament in session only until the 22nd of December. It is very unlikely that within the next five days the bill is going to go to cabinet and then pass through both houses of parliament. It is most unlikely."

Ms. Sarma thinks the legislative process could take several months.

Rajiv Gulati, general manager for Eli Lilly in New Delhi, says there is another way the bill could take effect in January. That is through a presidential decree, which would be a temporary measure until parliament acted.

Nevertheless, Mr. Gulati does not expect any big changes come January.

"I expect that after the first of January, 2005, when the patent law comes into play in India, what we will see is maybe one or two new drugs, patented drugs, being launched in the first few years – and later one, maybe five, six or seven. So, it is not going to be a sudden or a huge change at all," he says.

Ms. Sarma says there is widespread misperception about India’s new patent law.

"Sometimes we must remember that this is more emotion talking than logic or any basis in reality. Today I am in Bombay to really speak to some investors, who would invest in pharmaceutical companies. For all of them, they think January First, 2005 is the day when things just change overnight. It’s not so," she says.

She says once the legislation is approved, the examination process for any new patents could take many months.

Mr. Gulati of Eli Lilly says African and other developing countries should not worry about prices of drugs already on the market.

"First of all, the existing products, which are being manufactured in India, will continue to be off patent in India. So, therefore, the availability and supply of current products will continue to be of abundant supply at current prices," he says.

Patent attorney Sarma also says if developing countries find new Indian patented drugs too expensive, they can issue a compulsory license. Under the TRIPS Agreement of the World Trade organization, this would allow those countries to seek manufacture of generic versions of the drugs.

She says, "In case there is a compulsory licensing say in sub-Saharan Africa, the threshold level of approving it is that the country does not have manufacturing capacity itself, it can give a compulsory license. And the Indian Government in turn will give a compulsory license, back to back, to an Indian company for export into that country. So that is still possible."

Rajiv Gulati says the patent legislation will benefit India in several ways. These include increased investment in the country and the likelihood that Indian scientists and researchers will remain at home instead of seeking jobs in the United States and elsewhere.