Indian patent court licenses generic copy of Bayer’s blockbuster anticancer drug

By Dr. Ananya Mandal, MDMar 20 2012

Last week an Indian patent court shocked the $600 billion global pharmaceutical business by ordering Bayer, the German health care giant, to allow a tiny Indian generic drug company to sell cheap copies of the blockbuster cancer drug Nexavar – even though everyone agrees that the drug is protected by a patent. Instead, the court decided that Bayer had an obligation to make Nexavar available to people in India who needed it.

Pharmaceutical companies have a right to charge high prices for new, innovative medicines. Because more than 90% of experimental drugs fail to be proven safe or effective, it’s necessary for medicines to generate billions of dollars in sales in order to entice investors and companies to sink money into research.

But in this case, the Indian patent court and Natco Pharmaceuticals, which brought the case, have a point. The many thousands of Indian patients suffering from kidney or liver cancer could not get their hands on Nexavar. Knowledge Ecology International, a group that campaigns for people in developing world to have better access to new medicines, says Nexavar was priced at $69,000 for a year of treatment, 41 times the per capita income in India. For comparison, a drug that cost 41 times the U.S. per capita income would cost $1.6 million. The Natco price is just $177.

In the U.S., Nexavar actually costs even more in real dollars. The average liver cancer patient would pay $80,000 for a ten-month course if he were paying the wholesale acquisition cost of Nexavar; kidney cancer patients pay $96,000 a year. But they do not need to pay. The insurance does. Bayer and partner Onyx Pharmaceutical, which split sales duties in the U.S., have a program to make sure that eligible patients aren’t responsible for more than $100 of co-payment.

Yet no amount of compulsory licenses will help the millions of poor Indians suffering from diseases like cancer, because even the generic version of Nexavar will be priced beyond the reach of India's poor, experts and medical professionals say.

Increased state spending on free and accessible healthcare and policies to extend insurance cover to its poorest citizens would be far more effective weapons. ”The government has to start taking cancer seriously. They haven't done anything,” said Dr M Krishnan Nair, an award-winning Indian oncologist. “Even at generic prices, the drugs are too expensive for the poor. They don't get anything.”

India allocated 268 billion rupees for healthcare in 2011-12, around a sixth the size of the defense budget. That represents 2.13 percent of total government spending, or $4.50 for each person in the country. With around 40 percent of the population living below the poverty line, healthcare is an upper-middle-class luxury in much of India where spending in private clinics is four times the amount of that in government hospitals. The poorest would-be patients literally beg for treatment on the outside of a chronically underfunded and overstretched health system. As chairman of a committee tasked with formulating India's cancer strategy in the five years to 2012, Nair advocated 23 billion rupees for cancer control. Around $40 million was eventually spent, he says.

“The compulsory license system might not really work because poor people cannot even afford the discounted price,” said G. Balachandhran, former head of the National Pharmaceutical Pricing Authority (NPPA), India's drug price watchdog regulator. “Instead of dealing on a case-to-case basis, India needs to have a policy that will bring more and more people under medical cover...We need to increase the health insurance penetration, so that even poor people can afford treatment,” he added. Only 15 percent of India's 1.2 billion population is covered by health insurance, according to business lobby group the Federation of Indian Chambers Commerce & Industry, meaning even at a lower price, Nexavar will be out of reach for many.

India has around 2.5 million people living with cancer, or about one in every 500 people, according to government reports and medical organizations. That figure might be below the mark. “This is a gross underestimation,” said Nair, who is the country's only representative on the advisory committee for the World Health Organization’s Director General. “Suppose someone in a rural area has cancer of the stomach,” Nair explained. “He will have pain for 2-3 months. He will try indigenous medicines. Finally he will die. No one will record his true cause of death.”

There is a growing focus among global healthcare campaigners on the burden in poor countries of non-communicable diseases (NCDs) - chronic diseases like cancer and heart disease that kill millions who would survive with Western-style treatment. The scale of the problem is immense. More than 36 million people die every year from NCDs - 80 percent of them in poor nations where access to diagnosis and treatment is very limited, according to the World Health Organization.

United Nations (UN) Secretary-General Ban Ki-moon told a high-level UN meeting in New York on the subject last September, “NCDs hit the poor and vulnerable particularly hard and drive them deeper into poverty.”

India has joined Thailand as only the second country to grant a compulsory license for a cancer drug, and legal experts say compulsory licensing could follow for other expensive treatments, including the latest types of HIV/AIDS medicines.