India’s government is asking for comment on proposals that it should introduce compulsory licensing for medicines such as cancer drugs, which are unaffordable for the vast majority of patients.

India has 2-2.5 million cancer patients and around 700,000 are newly-diagnosed each year. A conservative annual estimate of the value of medicines needed to treat them would be 50 billion rupees, yet Indian sales of cancer drugs total only 1.5 billion rupees a year, says a discussion paper published last week by the Department of Industrial Policy and Promotion (DIPP). 

“The big gap indicates the near non-accessibility of the medicines to a vast majority of the affected population mainly because of the high cost of these medicines,” it notes.

Compulsory licensing could also enable more of India’s HIV/AIDS patients to be treated, says the discussion paper, which notes that while no compulsory licenses have been issued under India’s patent regime, about 52 developing and less-developed countries have done so since the World Trade Organisation (WTO)’s Doha Declaration. Wealthy nations have also issued compulsory licenses, including the US, Canada, Italy and the UK, where, it says: “compulsory licensing has been used by the National Health Service (NHS) in the past. It imported drugs, patented in the UK from countries where no pharmaceutical patent had been granted, on the ground of ‘Crown use.’ Such provisions continue to exist in British law.”

The DIPP discussion paper also considers the report of India’s Parliamentary Standing Committee on Health and Family Welfare, which was published in early August and expressed a number of concerns. The first of these is the high prices of newly-patented drugs which are not being regulated by the National Pharmaceutical Pricing Authority (NPPA) and the need to bring more drugs under its control.

Even for the 74 drugs which are regulated by the NPPA, drugmakers have increasingly been adopting “unorthodox practices,” under which they substitute regulated drugs with “new ingredients in popular brands to avoid regulation,” says the Committee.

The Standing Committee is also worried about the “super profits being generated by some drug companies who price their products significantly above cost, and the need to explore possibilities of capping profit margins for all medicines, including those not covered by the Drug Price Control Order (DPCO).

Finally, the Committee notes its concern at the takeover of Indian drugmakers by foreign firms, stressing the need to “generate policy options to ensure that major Indian pharma companies remain in Indian hands.”

Of the four possible responses available to the Indian government for dealing with these issues, only one – compulsory licensing – is immediate, says the DIPP, and it is asking for comment on whether changes are needed here, to be received by September 30.

It also puts forward three short-term policy options - on which the discussion paper is not seeking comment. The first of these would be to invoke the Competition Act 2002 to examine whether the price or availability of a drug is a consequence of an anticompetitive agreement or a “combination” which has an adverse effect on competition, or the abuse of a dominant position by a company, and to therefore initiate “suitable action.”

The second short-term option is to review the policy on foreign investment for pharmaceutical companies. “Presently, investment up to 100% in the pharmaceutical sector is on the automatic route,” says DIPP, which suggests that this could be “shifted to the government route so that proposals for mergers and acquisitions in this important sector could be scrutinised by the Foreign Investment Promotion Board (FIPB). This could be a way of monitoring whether new technology is being brought in by a foreign company while taking over an Indian company.”

The third short-term option, the Department suggest, is to expand the ambit of the NPPA and give it the power to regulate the prices of a larger number of drugs than the present 74.

65% of the Indian population still lacks access to essential drugs, and the need for affordable and high-quality medicines is critical for the sustainable growth of the Indian economy, says the DIPP.