Archive for ‘Pharma’

19/01/2019

China pharma must swallow that jagged little pill called R&D as government slashes profit margins of generic drugs

  • New policy environment demanding cheaper drugs adds pressure to innovate
  • China’s hospital drugs market was US$118 billion last year
PUBLISHED : Saturday, 19 January, 2019, 12:33pm
UPDATED : Saturday, 19 January, 2019, 12:40pm

China’s pharmaceutical industry – shaken by drastic price cuts from Beijing’s recent pilot roll-out of state hospital bulk purchase open bidding – will need to go through painful restructuring and raise big sums to fund innovation, according to executives.

As Beijing’s pilot reform spreads nationwide to cut prices of drugs and improve their efficacy and safety, companies are under mounting pressure to invest in innovative drugs development and reduce reliance on low profit products that are the same copies of original drugs.

That is because the reform means generic drugs manufacturing – the cornerstone of the industry – has become much more competitive.

“The industry and investors need to get used to the new environment in China, where generic drugs are a tool for lowering medical costs,” China Pharmaceutical Innovation and Research Development Association executive president Song Ruilin said in an interview at the sidelines of the JP Morgan Healthcare conference – the world’s largest – in San Francisco last week.

“To survive this, companies need to innovate,” he said.

Early last month, the first round of price bidding in 11 cities saw prices slashed by 62 per cent on average, according to Guoyuan Securities, raising concerns about the industry’s profitability. Two drugs saw prices fall by over 95 per cent.

This sent Hong Kong-listed mainland pharmaceutical firms’ share price down sharply, extending a sector-wide correction that saw the Hang Seng Mainland Healthcare Index nearly halved in seven months from an all-time high in late May.

The stakes are high. The nation’s hospital drugs market is estimated to be worth 800 billion yuan (US$118 billion) last year and is forecast to exceed 1.2 trillion yuan in 2021, according to a Credit Suisse research report.

The winners will be given up to 70 per cent of the local hospital system’s procurement volume. That will only increase as the drugs become more affordable.

Most, except those in the extreme price cut cases, are expected to come out better off as volume gains and unit cost savings are expected to more than offset lower prices.

Direct, centralised procurement will also cut out layers of hefty drugs marketing and distribution costs, bringing additional savings.

Losers will not only be subject to price caps set by the winning bids, they will also have to contend with the need to fight among themselves for the remaining 30 per cent of market that requires significant marketing and distribution costs to serve.

The entire industry will see lower profit margins than the over 30 per centprior to pricing reform, Everbright Securities analyst Lin Xiaowei noted in a report.

“Many generic drug makers will be wiped out in the process if they can’t pass bioequivalence [efficacy and safety] tests, or be selected as winners in the bulk procurement tenders,” said cancer drugs developer Innovent Biologics co-founder and chairman Michael Yu Dechao. “The clean-up will leave more room for innovation.”

To thrive in the environment, drug makers will have to focus on a smaller number of generic products where they have a clear cost advantage, while investing to develop new innovative drugs that will enjoy patent protection from competition.

Although some of the price reductions appear excessive, Song believes regulators will fine-tune their policies, as overly low prices raise the risk of compromises on drug quality.

“Reform needs to be done step by step. Now we have had a start, and the sky has not fallen. It only created a scare,” he said. “I believe the authorities are also reflecting on the results … price reduction is not its only objective.”

For generic products where some Chinese companies have attained western or Japanese standards while others have not, Song suggested that regulators give a 10 to 15 per cent price increment above the winning bids to the winners with international standards, so as to encourage industry quality improvement.

As the pricing reform spreads nationwide, the better resourced companies will be driven to spend billions of yuan each year in attempts to be the first to come up with a new compound that act on a new biological target to treat a disease. They will be rewarded by multi-year legal protection against competition.

Others that failed to do so will try to find an alternative compound – so-called “me-too drugs” – to act on the same target, and sell at a lower price to grab market share.

Many will place bets on their drug candidates, which if successfully developed ahead of rivals, will become blockbuster products and multi-year cash cows thanks to a burgeoning middle class that can afford better and costlier medicine.

China’s drug makers still have a long way to go to become a truly innovative industry.

Song pointed out that even among the most advanced pharmaceutical companies in the nation, some 80 per cent of their enterprise value has been derived from generic products and the rest from new drugs development.

This proportion is reversed among the big drug firms in the US, the world’s largest and most innovative pharmaceutical market, he added.

This, together with demographic and economic trends, mean tremendous room for growth and investment.

“China has entered prime time for health care industry development, especially biotechnology, thanks to the gradual maturing of the nation’s 300 million-strong middle class as health care consumers, especially those born in the 1950s and 1960s who are wealthy and soon entering old age,” said Houston Huang Guobin, JP Morgan Chase & Co’s head of global investment banking for China.

This is especially the case for expensive therapies for cancer patients, whose number in China is projected by Frost and Sullivan to rise to 5.8 million in 2030 from 4.3 million last year.

The market for PD-1 and PD-L1 antibodies alone – a class of cutting-edge novel immuno-oncology therapies that stimulate the body’s immune system to kill cancer cells and cost half a million yuan per year – is forecast by the business consultancy to jump to 56 billion yuan in 2023 from nothing last year.

Three of the five companies so far listed in Hong Kong under revamped listing rules have completed clinical trials on their PD-1 antibodies, and submitted the results to regulators for commercialisation approval.

Hong Kong, a new overseas fund-raising conduit for Chinese companies to fund costly drugs discovery and development, stands to benefit from the industry transition, but not without its own growing pains.

Hong Kong Exchanges and Clearing, which last April revised listing rules to allow biotechnology firms that have yet to generate any profit or even revenue to list, has been busy marketing the new listing regime.

Its senior executives – led by chief executive Charles Li Xiaojia – this month embarked on a North America roadshow to meet listing hopefuls and investors covering Vancouver, San Francisco, New York and Boston, HKEX senior vice-president Issuer Services Michael Chan told the South China Morning Post by teleconference on Wednesday from New York.

A year ago, it only did marketing in San Francisco ahead of the regime’s launch late April.

“This time around we are getting more interest from US-based listed companies looking at the Hong Kong listing option to complement their China or Asia strategy … it is not just China-based US-listed firms considering coming back for a dual listing or business spin-off,” he said.

His comment came barely two weeks after Stealth BioTherapeutics, a US-based and Hong Kong investor-backed biotech firm, filed to list on Nasdaq and let its Hong Kong listing application filed six months earlier lapse.

Chan said he believes that is an individual case which by no means suggests that Hong Kong has fallen out of favour as a biotech listing venue, adding he has not received many enquiries about that case during his roadshow.

Stephen Peepels, head of US Securities Asia-Pacific, Hong Kong at international law firm Hogan Lovells, agreed.

“As the first couple of companies that took advantage of the new rules [in Hong Kong]didn’t quite perform as well as hoped, it might have prompted some companies to reconsider their choice of IPO venue,” he said. “It would be pre-mature at this time to look at individual examples and start concluding that everybody is going to change their mind and focus on Nasdaq again. It may just take longer to see a lot of deals than many people have expected.”

So far, five companies have listed in Hong Kong under the new rules, while five more have applied but yet to sell shares and list.

The first one, hepatitis drugs developer Ascletis Pharma, which listed early August, saw its share price halved just over two weeks after market debut, triggering criticism of overly aggressive pricing.

“It is an issue of supply and demand, but it also reflects a degree of immaturity on the investment banking and stock analysis sides which allowed this kind of pricing to happen,” said Samantha Du, chief executive of Shanghai-based drugs developer Zai Lab.

“In the US, where there are 2,000 biotech listed firms and stock prices are driven by companies’ performance, very rarely do you see that kind of volatility,” added the former venture capitalist who sits on a panel that assists the Hong Kong stock exchange in its review of biotech listing applications under the new rules.

“Everything needs to start from somewhere, it is hard to have it perfect right at the beginning … it is a process of trial and error … overall there are more positives than negatives,” she said.

JP Morgan’s Huang said it will take time to build up the “ecosystem” as Hong Kong lacks bankers, lawyers, auditors and investors experienced in biotech firms.

To capture the growth opportunities and to augment its market share in China where it is less prominent as a leading investment bank as in its home market the US in the health care sector, he said the bank plans to “increase significantly” its bankers headcount in the broad “health care services and technology” category in China.

While noting Shanghai’s plan to introduce a new science and technology innovation board this year, which may allow international investors to participate and feature a more market-oriented and less cumbersome listing vetting process, he said Hong Kong’s advantages as an open international market will stay and its role will not be taken away in the foreseeable future.

Shanghai-based PegBio, a drug developer for metabolic syndrome conditions such as diabetes, nonalcoholic fatty liver disease (NAFLD) and obesity that is seeking to go public within this year, is hedging its bets and will consider all three options – Hong Kong, Nasdaq and the proposed Shanghai board, said chief executive Michael Xu Min.

Having raised around US$60 million private capital since inception a decade ago, it aims to develop and commercialise three to five products within five years.

Some 10.9 per cent of China’s adult population was estimated to be diabetic in 2013 while 35.7 per cent was pre-diabetic – with high blood sugar and likely to become diabetic, according to a Peking University and Chinese Center for Disease Control and Prevention study with over 170,000 participants published in 2017.

Around half of patients suffering from nonalcoholic steatohepatitis (NASH) – a type of NAFLD – are also diabetic, Xu said.

PegBio aims to complete a phase two type 2 diabetes drug clinical trial involving 450 patients in China and the US by the end of this year, and commercialise it by 2022.

“Rising living standards and changing eating habits have resulted in major increases in incidences of metabolic diseases,” he said. “So far, there is no cure and drugs can only help control the symptoms and slow down their development.

“We aim to develop drugs that are better than current ones on efficacy, safety, ease of use and affordability.”

Source: SCMP

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27/07/2016

China’s Fosun to sign agreement for $1.4 billion Gland Pharma buy – paper | Reuters

Shanghai Fosun Pharmaceutical (Group) Co (2196.HK) will sign a definitive agreement on Wednesday to buy a controlling stake in India’s Gland Pharma in a $1.4 billion deal, the Economic Times newspaper reported, citing a source with direct knowledge.

In May, Shanghai Fosun had made a non-binding proposal to buy Gland Pharma, which is backed by KKR & Co (KKR.N), to boost its drug manufacturing and research and development capacity.

Fosun did not immediately comment, when contacted by Reuters. Gland Pharma made no immediate comment on the report.

The paper said KKR declined to comment.

Source: China’s Fosun to sign agreement for $1.4 billion Gland Pharma buy – paper | Reuters

28/06/2016

Pfizer to invest $350 million in China biotech hub, first in Asia | Reuters

Pfizer Inc (PFE.N) will invest $350 million to build a biotech center in China, the latest in a series of moves by pharma industry giants to set up shop in the world’s no. 2 drugs market with the aim of securing faster approvals for their products.

The facility in eastern Hangzhou region – Pfizer’s first biotech center in Asia – is expected to be completed by 2018, the firm said in a statement on Tuesday.

Global “Big Pharma” is increasingly looking for smart ways to tap China’s healthcare market, estimated by consultancy IMS Health to be worth around $185 billion by 2018. From investing in China facilities to acquisitions, licensing deals and joint ventures, the aim is to seek an edge in dealings with domestic regulators and government.

John Young, group president for Pfizer’s essential health division, said in the statement that the Hangzhou facility should “help support China’s aim to increase the complexity and value of its manufacturing sector by 2025”.

Pfizer said it would “work closely” with local regulators to bring the drugs “to market as soon as possible”. The center will mostly on biologic drugs – made from living micro-organisms rather than chemically synthesized – and lower-cost ‘biosimilars’, of generic versions of biologics.

Pharmaceutical executives have long complained about the slow process of getting drugs to market in China, while others have run up against regulatory roadblocks. Pfizer had to close its vaccine business in the country last year after a license for its top-selling vaccine Prevenar was not renewed.

China’s overall healthcare spending is set to hit $1.3 trillion by 2020, but drug market growth has slowed to a low single-digit percentage pace from over 20 percent just four years ago as branded generics have lost their shine and Beijing has looked to drive down prices to keep a lid on costs.

Source: Pfizer to invest $350 million in China biotech hub, first in Asia | Reuters

12/04/2015

Drugs for malaria, osteoporosis, diabetes: Harsh Vardhan – The Hindu

‘The “candidate drugs” for malaria, osteoporosis and diabetes were currently undergoing clinical trials’

The “candidate drugs” for malaria, osteoporosis and diabetes were currently undergoing clinical trials. Photo: V.V.Krishnan

The Indian pharmaceutical sector would soon be showcasing ‘candidate drugs’ for malaria, osteoporosis and diabetes, Union Minister for Science and Technology and Earth Sciences Harsh Vardhan said on Saturday.

With further R&D, important breakthroughs could be on the horizon for these diseases, he said following a visit to the Central Drug Research Institute (CDRI), Lucknow, a wing of the Council of Scientific and Industrial Research (CSIR).

Addressing scientists, he said Prime Minister Narendra Modi was committed to making India one of the world’s leading destinations for end-to-end drug discovery and innovation by 2020.

“I am confident that the drug laboratories under the CSIR are capable of backing up the Swasth Swachh Bharat Mission. Our scientists are focussing on both infectious and lifestyle diseases. We are developing next generation drugs, biologics, biosimilars, gene therapeutics, stem cell therapeutics, personalised medicine and multifunctional nanomedicine,” said Dr. Vardhan.

Indian R&D efforts in government laboratories like CSIR-CDRI, CSIR-Indian Institute of Chemical Technology (CSIR-IICT, Hyderabad) and CSIR-Indian Institute of Chemical Biology (CSIR-IICB, Kolkata) have a track record in making drugs for kala azar, filaria, leprosy and tuberculosis available at affordable rates to the common man, he said.

via Drugs for malaria, osteoporosis, diabetes: Harsh Vardhan – The Hindu.

03/04/2015

A New Cancer Drug, Made in China – China Real Time Report – WSJ

Xian-Ping Lu left his job as director of research at drug maker Galderma R&D in Princeton, N.J., to co-found a biotech company to develop new medicines in his native China. As the WSJ’s Shirley S. Wang reports:

It took more than 14 years but the bet could be paying off. In February, Shenzhen Chipscreen Biosciences’ first therapy, a medication for a rare type of lymph-node cancer, hit the market in China.

The willingness of veterans like Dr. Lu and others to leave multinational drug companies for Chinese startups reflects a growing optimism in the industry here. The goal, encouraged by the government, is to move the Chinese drug industry beyond generic medicines and drugs based on ones developed in the West.

Chipscreen’s drug, called chidamide, or Epidaza, was developed from start to finish in China. The medicine is the first of its kind approved for sale in China, and just the fourth in a new class globally. Dr. Lu estimates the research cost of chidamide was about $70 million, or about one-tenth what it would have cost to develop in the U.S.

“They are a good example of the potential for innovation in China,” said Angus Cole, director at Monitor Deloitte and pharmaceuticals and biotechnology lead in China.

China’s spending on pharmaceuticals is expected to top $107 billion in 2015, up from $26 billion in 2007, according to Deloitte China. It will become the world’s second-largest drug market, after the U.S., by 2020, according to an analysis published last year in the Journal of Pharmaceutical Policy and Practice.

via A New Cancer Drug, Made in China – China Real Time Report – WSJ.

07/12/2014

EU States Suspend Marketing of Drugs Tested at Lab in India – Businessweek

A European Union review of a contract lab in India hired by drugmakers to perform clinical trials pivotal to approval of certain generic medicines has led some member states to suspend marketing of those drugs.

The European Medicines Agency is reviewing findings GVK Biosciences, based in Hyderabad, India, didn’t comply with clinical practice standards, and the suspensions are a precaution until the review is finished, according to a statement yesterday from the agency. The EMA didn’t name the countries or the drugs being suspended, and its press representatives didn’t respond to a call and an e-mail after business hours.

The review is based on an inspection by the French medicine agency that raised concerns about the reliability of studies done at GVK Bio since 2008. The French agency inspected GVK Bio from May 19 to 23 and found falsification by at least 10 people between 2008 and 2013 of electrocardiograms in all of the nine trials they examined.

via EU States Suspend Marketing of Drugs Tested at Lab in India – Businessweek.

08/07/2014

Indian Budget 2014: Biocon chief wants more R&D incentives, fewer essential drugs – Reuters

India’s $15 billion healthcare industry has taken hits on several fronts in recent years, from slow approvals for drugs in clinical trials to several run-ins with the U.S. Food and Drug Administration over the quality of its generic drugs.

Market growth fell to less than 10 percent last year after the increase in the number of drugs that the government said should be subject to price caps so that poor and middle-class people could afford them (Only 15 percent of India’s 1.2 billion people have health insurance).

Now, with Prime Minister Narendra Modi hinting at a “bitter pill” to rescue India’s economy, the pharma industry wouldn’t want to be at the receiving end of tough decisions; it would be difficult for a business that’s used to making medicine instead of taking it.

via India Insight.

08/02/2014

Trade groups seek more U.S. pressure on India over patent protection | Reuters

The U.S. Chamber of Commerce on Friday called on the government to ratchet up pressure on India over intellectual property rights, in a move that could help prevent Indian companies from producing cheap generic versions of medicines still under patent protection.

A patient holds free medicine in Chennai July 12, 2012. REUTERS/Babu

In a submission to the Office of U.S. Trade Representative (USTR), the Chamber of Commerce requested that India be classified as a Priority Foreign Country, a tag given to the worst offenders when it comes to protecting intellectual property and one that could trigger trade sanctions.

Other trade groups, including those representing the pharmaceutical and manufacturing industries, echoed the call for a tougher stance on India.

The recommendations, which were due by Friday, were for a document known as a Special 301 Report prepared annually by the Office of the United States Trade Representative.

India is on the U.S. government‘s Priority Watch List for countries whose practices on protecting intellectual property Washington believes should be monitored closely.

via Trade groups seek more U.S. pressure on India over patent protection | Reuters.

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20/11/2013

Indian women in business: has the glass ceiling been shattered? – The New Silk Road, Stephenson Harwood

From: The New Silk Road, Nov 13 to Jan 14; Stephenson Harwood

http://f.datasrvr.com/fr1/413/26346/NSRissue17-interactivePDF-v15.pdf

India is a country of acute contrasts; and perhaps nowhere is the divide more pronounced than in the status of women. In terms of the big milestones, the country has a reputation for leapfrogging others – Indira Gandhi became the world’s second ever female prime minister way back in 1966 (pipped to post by Sirimavo Bandaranaike of Sri Lanka), and women have since served in multiple senior political roles.

They’ve also stormed ahead in the professions (notably medicine and law) and in the international corporate world. One might cite Indra Nooyi, who beat all comers to secure the top job at Pepsi-Co; ot her aptly named Padmasree Warrior, chief technology and strategy officer at Cisco Systems. Meanwhile, a generation of newly-empowered and highly-educated young women are going out to work in larger numbers than before.

Set against these achievements, however, is the increasingly troubling situation facing Indian women more broadly. A recent Reuters Trustlaw investigation – examining a wide variety of measures from male-to-female pay disparity, through female foeticide, to deaths in dowry disputes – ranked India  as the worst country in the G20 to be born female.

Assushma Kapoor, South Asia deputy director for UN Women sums up: “There are two Indias: one where we can see more equality and prosperity for women, but another where the vast majority of women are living with no choice, voice, or rights.”

Although more than two decades of economic liberalisation has opened up opportunities in progressive cities such as New Delhi, Kolkata and Bangalore, large parts of the country – particularly in the north – remain entrenched in feudalism. The upshot, according to The Economist, is that just 29 per cent of Indian women are currently in the workforce, compared with two-thirds of women in China.If deep-rooted changes in social attitudes are needed, who better to lead them than India’s companies? The willingness with which multinational companies (especially in the IT sector) have embraced the female graduates of India’s management schools is surely indicative of their quality. As well as Vanitha Narayan of IBM (profiled overleaf) the managing directors of both CapGemini India and Hewlett-Packard India are women. Female representation at the top of the banking profession is also much higher in India than many other countries.

The sectors in which women are currently thriving at senior levels – FMCG, retail, IT and retail banking – tend to be consumer-centric, says headhunter Ronesh Puri of Executive Access: reflecting the fact that household buying decisions are usually made by women and companies feel the need to ‘connect’. In more labour-intensive industries like mining, oil and gas, and aviation, women are still under-represented – as they are in the west – though that is beginning to change.

Indeed, demand for female directors at Indian companies across the board is growing at an estimated rate of about 10 per cent each year. That’s partly the result of new legislation mandating at least one board for certain classes of companies. But it’s also a response to the growing body of research suggesting a link between business growth and profitability, and gender diversity.Many women in corporate India might protest that there’s a long way to go. But the same is true in virtually every other developed nation. And one thing India is not short of is distinguished role models. Here we profile four inspirational women, who’ve made their mark across very different sectors.

Shubhalakshmi Panse

Chairman and managing director, Allahabad Bank

When Shubhalakshmi Panse’s became the first woman to lead India’s oldest bank last year, it marked the culmination of a near 40-year career at the financial coal-face. It almost never happened. Panse, 59, was pursuing a doctorate in embryology at Pune University when she stumbled across a recruitment advert from the state-owned Bank of Maharashtra. She took the qualifying exams “just for fun”. Having successfully climbed the professional ladder, Panse made the most of a sabbatical in the US in the early 1990s, completing a three-year MBA in twelve months flat before returning to India. The sizeable challenge she was hired to tackle at Allahabad Bank was to turn round the struggling institution in a year, ahead of her retirement next January. Panse admits “networking” isn’t her forte. She credits her success to her work ethic (“my commitment has always been 200 per cent”); and her parents. “We were raised as independent individuals. My mother would say ‘you can do it’.

Ishita Swarup

Founder, Orion Dialog and 99.labels.com

Ishita Swarup knew from an early age that she wanted to do “something of my own” rather than get stuck in “the cog in the wheel syndrome”. After completing her MBA, she joined Cadbury’s Indian brand management team, but stayed in the corporate cocoon just three years before starting the online phone marketing firm, Orion Dialog, in 1994 aged 27. The firm, which numbered Citibank among early clients, caught the rising tide of business process outsourcing. In 2004, Swarup exited in style: selling out to Aegis BPO (part of the Essar group). Still, she’s had much a choppier time with her second big venture, the ecommerce outfit 99.labels.com. Launched in 2009, the site was India’s first ‘flash sales’ shopping portal. But a proliferation of ‘me too’ competition and profitability concerns have dogged the firm and, in May, a big investor pulled out. Swarup hasn’t given up. She’s rejigging the business model and looking for new backers. “Seeing a venture take shape from idea to reality, and then taking it to a growth level, motivates me,” she says. “Making mistakes is part of that process.”

Kiran Mazumdar-Shaw

Founder, Biocon

India’s wealthiest self-made woman started Biocon aged 25 in 1978, out of the garage of a rented house with the bare minimum of capital because she could not get financial backing. The decision to strike out on her own – becoming India’s first biotech entrepreneur – was taken almost by default. She had hoped to get a job at Vijay Mallya’s United Breweries, but was shocked to hear that male colleagues wouldn’t accept her. “That’s when the hard fact hit me. There is a gender bias.” Biocon began life as an enzyme specialist, before moving whole sale into the lucrative bio-pharma sector in the late 1990s, ahead of the great ‘off patent’ bonanza. IN 2004, Mazumdar-Shaw too the company public, Now 60 and worth US$625 million, according to Forbes, she lives in an estate outside Bangalore. “You could be in California”, she said last year. “Then you step outside and see poverty. That’s not a nice feeling.” She has pledged to five away three-quarters of her wealth.

Vanitha Narayanan

Managing director, IBM India

In contrast, one woman who has thrived on corporate life is Vanitha Narayanan, an IBM ‘lifer’ who became responsible this year for all Big Blue’s operations in India and South Asia – one of the company’s fastest-growing regions. With 150,000 people on the payroll, IBM is the largest multinational employer in India. Naraythan, a graduate of the University of Madras, cheerfully admits that, apart from a brief stint in a department store, “IBM is my only job”. She joined the company’s US telecoms group as a trainee after taking an MBA at the University of Houston, and made her name working with just one client, the Southwestern Bell Telephone Company. “It helped me lay a foundation – you respect the industry of your client, and sometimes the client is your best teacher.” That certainly proved true in her case. She went on to become a global vice-president of IBM’s telecom solutions, and in 2006 moved to China to run the Asia Pacific Unit. At 54, Narayanan is modest about her achievements, preferring the word “influence” to power. “She’s no pushover,” says a colleague. “But she can build trust very easily”.

See also:

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16/05/2013

* India: Patents and precedents

FT: “Pharmaceutical companies fear that the battle raging in India over patents will inspire other countries to change their laws

Meena, a 45-year-old New Delhi widow with a 10-year-old son, was diagnosed with potentially fatal blood cancer in 2010. To control it, her doctors prescribed an Indian*- made generic version of Novartis’ leukaemia drug.

But her body stopped responding to it and Meena was advised to switch to a more expensive drug, Sprycel, a second-line cancer drug made by Bristol-Myers Squibb. Sprycel costs Rs160,000 ($2,900) per month, far out of reach for a woman living on her late husband’s Rs17,000 monthly pension.

A solution appeared to be at hand last May when Natco, an Indian generic drugs company, started selling its own version of Sprycel for Rs9,000 a month. A charity helped Meena to buy it.

But Meena’s ability to obtain potentially lifesaving medicine became tied up in a dispute pitting the interests of the world’s largest drugmakers – who spend $70bn annually developing drugs – and generic manufacturers in the developing world.

BMS, the US drugs group with revenues of $17.6bn in 2012, accused Natco of patent infringement, prompting the India’s Supreme Court to order the Indian drugmaker to stop making the medicine until a final verdict was reached. While some patients stocked up before the generic disappeared, Meena could only afford a few bottles.

The BMS “access programme” for the poor offered to sell her Sprycel for Rs15,000 per month – a big discount on the market price but still more than she can afford. Friends have chipped in to buy her a month’s supply but she is distraught about the future. “I don’t see a ray of hope,” she says. “Even if I use all my resources, I can only afford it for two months. It’s not sustainable.”

It is this struggle of educated, middle-class patients to obtain cutting-edge medicine that has led to a showdown between India and western pharmaceutical companies over the patents and prices of lifesaving drugs.

Western drugmakers fear India will inspire other emerging markets to challenge their patents. They have accused India of trampling on their intellectual property rights after a series of decisions overriding, revoking or refusing patents on cancer and hepatitis C drugs from Bayer, Pfizer, Roche and Novartis. The companies are also irate that New Delhi is considering compulsory licenses for another three patented cancer drugs, including Sprycel, and Roche’s breast cancer drug Hercepterin.

At a recent US Congressional hearing, Roy Waldron, Pfizer’s chief intellectual property officer, complained that New Delhi had “routinely flouted trade rules to bolster the Indian generics industry”.

Indian generics executives and patients activists say the reality is more nuanced. They argue that India’s courts are trying to balance drug companies’ intellectual property rights against the need for affordable medicine for 1.2bn Indians. India’s public healthcare system has virtually collapsed, with Indians paying 60 per cent of their healthcare costs from their own pockets.

This stand-off is taking place within the framework of a new patent law crafted to preserve India’s manoeuvring room to keep medicines affordable at home – and protect its exports of drugs abroad.

“The portrayal is that India doesn’t respect intellectual property rights but the reality is that it is balanced,” says Leena Menghaney, a lawyer with Médecins Sans Frontières, the humanitarian organisation. “The decisions that go in favour of the MNCs [multinational corporations] never get reported and decisions against them always hit the headlines.”

D.G. Shah, secretary-general of the Indian Pharmaceutical Alliance, which represents India’s biggest generics firms, rejects suggestions of protectionism for domestic companies.

via India: Patents and precedents – FT.com.

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