The Centre needs to frame guidelines to facilitate licensing arrangements between companies to bring critical drugs into the country, according to Cipla Chairman Dr YK Hamied.

“We have to devise policies that secure people’s right to access affordable quality medicines without monopoly. A favourable and pragmatic licensing policy should be provided for drugs under monopoly,” he said in his acceptance speech after receiving the Lifetime Achievement Award from the Indian Drug Manufacturers’ Association (IDMA).

Stressing the need for companies to be able to partner with innovator companies, he said it is important that the latest therapies are available in our country. “If companies are unable to get licences for drugs under monopoly, the Government of India should intervene on behalf of the country for a non-exclusive compulsory licence with a fixed royalty to the innovator, so that patients are not denied life-saving medicines,” he said.

The licensing policy should fix the royalty (that a generic drugmaker would pay to make the innovator’s medicine) at 4 per cent of net sales, Hamied later told BusinessLine .

Patent landscape The recent in-licence agreement on a hepatitis-C drug was voluntarily given to 11 drug companies in India on a suitable royalty payment. As a result, the drug sold in the US at $1,000 per tablet is available here at between $4 and $7 per tablet, he told the IDMA gathering.

This is an example of a good equilibrium between access and rewarding innovation, he said, referring to the alliance between Gilead and several Indian companies including Cipla on hepatitis C drug sofosbuvir.

Tracing the patent landscape into three phases, he said the clock had been set back to the pre-1972 era, when product patents were allowed.

Turning point The enactment of the Indian Patent Act, 1970 in September 1972, was a turning point for the industry, he observed. India had abolished product patents and preserved only process patents in health, food and agriculture. As a result, the domestic pharma industry could legally manufacture and market medicines within the country and internationally.

Referring to the 1972-2005 period, he said it was the “golden era” for the national industry, where local drugmakers made active pharmaceutical ingredients (APIs) and the finished medicine.

The Patents Act was amended to allow product patents in 2005, and “the adverse effects of this will plague India and, indirectly, the world’s healthcare scenario for decades to come,” he said.

In another 10-odd years, more local companies will sell out, go in for mergers or see better opportunities outside the country, he told BusinessLine , urging the Centre to bring in policies that encourage indigenous industry and stability.

For instance, price control, if exercised, should be for a fixed period, of a few years, he said. And it should be exercised only if the medicine holds a monopoly in the market. If there are more than five companies making the drug, there should be no price control, he added.

“Water finds its own level,” he said, indicating that competition will keep prices in check.

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