Monday, June 25, 2012

Are Indians gradually losing access to best in class medical treatments?

We know that as per the TRIPS agreement, Indian pharma companies are not allowed to develop cheaper generic copies of drugs that have been approved post 2005 or whose patent has been filed after 1995. It is now seven years since the implementation of the product patent / TRIPS agreement in India and about 150 NME's/NBE's have been approved since then.  Many of these NME’s which offer substantial benefits over existing treatments  have been launched  by MNC’s in India, but due to the price tag, these drugs remain largely unaffordable for the masses. While complying with the norms of TRIPS, it is also important to ensure the availability of the best in class treatments to the needy. A case in point is new treatments of prostate, renal ,breast cancer, HIV, and diabetes where new drugs that have been approved offer breakthrough benefits over the older ones.  The route of compulsory licensing (CL) has been devised to ensure the availability of these drugs at  affordable prices, but it may not be effective in the longer run. CL deprives the MNC’s innovators of the rightful return on the R&D investments and it is likely that if there are more rulings in favor of Indian generic companies seeking compulsory license to launch cheaper copies of life saving drugs of MNC pharma, these companies would opt not to launch these drugs in the Indian market.

Globally the government of respective countries ensure availability of medical treatment to  their citizens, and  it is due time for the Indian government to take a leap in this direction. They can purchase these life saving drugs from MNC’s at a negotiated price and can provide it to the health care providers in India at subsidized prices.

1 comment:

  1. I am a fund manager and I sense an opportunity here. Is it not a a good idea to Invest in MNC's in India, as over years, the cumulative sales from these NME's would mean substantial revenues for these companies, which otherwise they have been losing to Indian companies over the years. In case the Indian regulators provide for reimbursement of these NME's it would bring further upside in investment,as we would see a larger population getting access these NME's translating into much larger sales.

    For domestic Indian pharma companies, we would see them competing for the same pie of products and hence in lure of new growth avenues, these companies may try to cut each other.