India bites world pharmaceutical industry - and why that may be a good thing

India is the pharmacy to the world's poor, and they affirmed that role on March 9, when they invoked compulsory licensing provisions under rules from the World Trade Organization (WTO) that allows them to produce and sell generic drugs when a patentee denies permission.

NEW DEHLI, INDIA (Catholic Online) - The drug in question is "Nexavar," a cancer fighting drug produced by the German pharmaceutical company, Bayer. The drug is used to treat liver and kidney cancer.

Compulsory licensing is a process whereby a generic manufacturer is permitted to create their own version of a drug if the cost of that drug is too high and the patentee will not permit its production elsewhere. By circumventing the patent regulations, India has been able to supply millions of its own people with critical life-saving medications, at a fraction of the cost of brand name.

This development is recognized as the first time that India, one of the world's largest generic drug manufacturers, has gone head-to-head with a major pharmaceutical company. The worldwide pharmaceutical business is worth about $800 billion. It's easy to understand, when one appreciates the cost associated with purchasing badly needed medications.

The cancer treatment drug Nexavar, can cost at least $5,500 for one month's treatment. This puts the drug out of reach for anyone who does not have premium insurance coverage. Insurance companies are also disinclined to pay such exorbitant prices for drugs. This is a chief part of the reason why health care is such a tremendous expense both in the United States, and abroad.

In fact, medical expenses are one of the primary contributors to household bankruptcy.

With India preparing to produce a generic version of Nexavar, the new cost of treatment is anticipated to be under $200 per month. This makes the drug affordable even for people who have no insurance. In India, they believe the generic Nexavar will prolong the lives of cancer patients for many months to years.

The pharmaceutical industry, unsurprisingly, has taken a critical stance on the matter. They claim that without allowing pharmaceutical companies to generate the profits they do, there will be less incentive for them to create new and improved life-saving medications. In other words, cutting into profits means cutting into research.

But the pharmaceutical industry does business in the hundreds of billions of dollars. How rich do they need to be? Furthermore, a significant portion of medical research is carried out by public and government institutions both in the United States, and abroad -- including India. This means that pharmaceutical companies have no monopoly on research and development of new medications and treatments.

Ultimately, this latest development opens the door for Indian manufacturers to produce an ever-growing list of generic medications to replace expensive brand-name medications produced by the pharmaceutical companies, under certain conditions. This may mean smaller profits for the pharmaceutical industry, but it also means greater profits for the generics industry, and most importantly --  it means longer lives for people who can now afford their medications.

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