Generic drugs under attack

Recently, in a hearing in the US Congress, Teresa Rea, Deputy Director of the U.S. Patent and Trademark Office (PTO), was outraging against the Indian government for approving the licensing of the generic version of the cancer drug Nexavar. (In India, Nexavar costs $5,000-per-month, while the generic version made by the Indian company would cost $157 per month.) She was 'dismayed and surprised' by the 'egregious violation of the World Trade Organisation (WTO) treaties' and said that she personally engaged various agencies in the Indian government to try to invalidate the license. Her enthusiastic lobbying for the multinational drug companies (German company Bayer, in this case) was, obviously, not tempered by the fact that the Trade Related Intellectual Property Rights (TRIPS) agreement of the WTO does allow such licenses under its clause of 'compulsory licensing'. That, being an officer that deals with patents, she wasn't aware of a famous clause, that has existed for ages, and that has even been invoked by the US government in the past (when Indian generic drugs saved the day for the US), speaks of the grip of the lobbying groups on her office.

Later, after being made aware of the clause, she conceded that it is indeed allowed under TRIPS, but that she would oppose it.

There are signs that India may face similar pressure under the EU-India Free Trade Agreement, which is being negotiated for a few years now, to give up its rights to issue compulsory licenses for critical generic medicines, in exchange for easier short-term access for Indian professionals to Europe (which actually is an obligation on Europe anyway, under mode 4 of the General Agreement on Trades and Services of the WTO).

Various agencies like Oxfam, Médecins Sans Frontières, UNITAID are warning that such a move will have massively grave consequences for the supply of essential life-saving generic medicines in poor countries around the world. ("Millions of people in sub-Saharan Africa would likely now be dead or dying if it had not been for the cut-price Aids drugs manufactured in India.")

The owner of Cipla has said that 95% of Western pharmaceutical firms’ profits come from developed markets like Japan, Europe, America, so these giants don't really lose out because of the compulsory licenses, in which they are entitled to only a set fee.

(On an unrelated note, GlaxoSmithKline was fined $3 billion, last week, for encouraging the prescription of unsuitable antidepressants to children by bribing the doctors, among other unethical acts.)

The firms reasonably claim that the research on drugs (besides bribing the doctors and various agencies around the world) needs large investments. Public funding of such research will thus become increasingly important to overcome the private monopolies on drug research, if the patent laws in India and around the world continue to be increasingly restrictive.