India’s War On Intellectual Property Rights May Bring With It A Body Count

Last month, drug maker Roche withdrew its patents for the breast-cancer drug Herceptin in India — and thus gave tacit approval to other companies to make low-cost generic versions of the drug.

But the withdrawal of those patents was not completely voluntary. If the Swiss pharmaceutical firm had not relinquished its intellectual property rights, the Indian government likely would have taken them by force — and allowed anyone to manufacture less expensive generic copies of it.

Why should Americans care about patent fights halfway around the world? Because India’s war on intellectual property rights harms the patients, workers, and investors of today — and will undermine research into the innovative cures of tomorrow.

The Indian government hinted that it would revoke Roche’s patents on Herceptin, which were supposed to protect the drug from competition until 2019. The drug-maker could have taken India to court. But it had good reason to think it would lose.

Over the last two years, the Indian government has attacked pharmaceutical patents with increasing aggression. In March 2012, it issued its first “compulsory license” for a kidney-cancer drug made by Bayer AG. A compulsory license allows firms to make generic copies of drugs supposedly still protected by patents in exchange for a licensing fee set by the government. The patent holder has no say in the matter.

Later that year, the Indian government revoked Pfizer’s patent on Sutent, which treats gastrointestinal tumors and advanced kidney cancer. No other country has taken such an action.

And in early 2013, India’s Supreme Court denied patent protection for Glivec, which is used to treat leukemia, despite the fact that it continues to be protected by patents in almost every other country.

To date, India has issued compulsory licenses or revoked patents for eight advanced pharmaceuticals.

Supporters of Indian-style activism argue that patented drugs are too expensive — especially for patients in developing countries.

But patents ensure that these drugs can be invented in the first place. On average, it takes 10 to 15 years and $1 billion to develop one new drug. Just one in every 10,000 compounds that enters the drug-discovery process actually makes it through the U.S. Food and Drug Administration’s regulatory review process — and onto the market.

Without the period of exclusive sales that patents guarantee, pharmaceutical firms would not have enough time to recoup their ten-figure investments. And if drug-makers cannot attract the investment they need to seed their research operations, innovation will grind to a halt.

Further, the Indian government is not really playing Robin Hood — robbing rich Western drug firms to furnish the poor with affordable generic medicines. India has ulterior motives — namely, boosting its generic-drug manufacturing sector, now one of the largest in the world.

In March 2012, for instance, India justified a compulsory license for a cancer medication by claiming that it was imported rather than manufactured locally. That smacks of state-driven industrial policy — and is at odds with the rules governing international trade.

India engages in similar behavior in other sectors of the economy. The country requires that some “clean energy” technology and IT equipment, for example, be 100-percent supplied by domestic manufacturers — and thereby freezes out imports of these products.

It is no surprise, then, that India comes in dead last in terms of protecting intellectual property rights, according to a ranking by the Global Intellectual Property Center.

Earlier this year, the heads of more than a dozen of America’s industry associations — from the National Association of Manufacturing to the Semiconductor Industry Association to several leading pharmaceutical associations — wrote to President Obama pleading for action against India’s attacks on industries that rely heavily on intellectual property.

Given that India’s economy now tops $4.7 trillion and that it trades close to $1 trillion in goods and services each year, this is hardly an idle concern for these U.S. industries, which employ about 40 million Americans and make up more than 60 percent of merchandise exports.

And if nothing is done to discourage India from abusing intellectual property rights, other developing countries may follow suit, under the assumption that doing so will help them secure cheap copycat drugs for their citizens — and simultaneously develop their own domestic drug industries.

If India’s way becomes the global norm, there may soon be no more innovative drugs with patents to infringe upon. And that’s bad news for patients the world over.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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