Govt?s decision to follow the compulsory licence path could hurt pharma R&D and drug availability
On the face of it, the government?s decision to follow through with its compulsory licensing (CL) plan in the pharmaceutical industry?it has started the process of issuing CLs for three commonly-used anti-cancer drugs Trastuzumab, Ixabepilone and Dasatinib?seems like a good move. Cheaper drugs?the earlier grant of a CL of Bayer?s liver and kidney cancer drug Nexavar to Indian firm Natco lowered its cost from R2.8 lakh a month to R8,800?are definitely an attractive proposition, especially with drug prices spiralling as they are. But a short-term solution like this could very well start posing challenges in the longer-term. One potential fall-out is that pharma majors may just decide to stay away from high-cost drugs in the Indian market for fear of their costly formulae being taken away from them. A second and potentially more serious fallout is the damage R&D will take if CLs become the norm. For most pharma companies, each successful drug formula is accompanied by a large number of failed ones, the cost of which is often passed onto the price of the drug. Cheaper drugs are all well and good, but whom does it really help if research for new medications starts to slow?
There is no question that drugs need to be cheaper, but a more viable method of achieving this could be through a compromise between pharma companies and the government. If pharma companies don?t negotiate for more reasonable returns, the government will have no choice but to threaten them with more CLs. The government, on its part, can help defray some of their R&D costs, offer them lab space, etc. Also, CLs should ideally be restricted to mass diseases?swine flu, bird flu, etc?not when a drug?s impact is limited to a smaller percentage of people. And finally, if the government really is keen on reducing drug prices, why not buy drugs in bulk and price them as it wants?
