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Work Hard, Play Hard (Not Really): Foreign Patent Law Harms American Drug Innovation

While most people believe that if you work hard you should be able reap the rewards, the Supreme Court of India thinks otherwise. In a recent ruling by the court, Bayer was denied the patent of their advanced kidney and liver cancer drug, Nexavar, and will be required to license their product to Indian generic drug company Natco Pharma. Though Bayer is guaranteed to receive a 6% royalty from the generic, this case is just one of many others representing the fight between intellectual property rights of innovator drugs and affordable generics.

 

P.H. Khan, the Controller of General Patents in the Indian government, claims that by law, innovator drug patents can denied if the resulting product is not “reasonably affordable” to the general public. Comparatively, Nexavar in the American market costs patients $70,000 per year, far out of the range that can be afforded by many Indians. Though Nexavar costs $5,500 per month in India, supporters of the ruling forget that pharmaceutical companies, like Bayer, sponsor programs that provide patients in developing countries steep discounts on needed medications.

 

Intellectual property rights should be an important concern because of the innovations they serve to protect. Companies like Bayer invest billions of dollars in research and clinical trials in order to bring safe and effective drugs to market. Such large investments require certain protections so that companies are be able to recuperate their costs in order to continue in groundbreaking pharmaceutical research. Without the patent protection, Bayer will have a difficult time recuperating losses as the cost of research and testing is shifted to the U.S.

 

Without granting patents, India is doing a great disservice to their own people who could be benefiting from innovator drug companies. The ruling is setting precedent for numerous other innovator drugs also likely to be denied over affordability charges. Gilead Sciences and Roche, two companies producing H.I.V. and cancer medication, are currently appealing or arguing to maintain their patents in India. India’s growing middle class is becoming an attractive emerging market to drug companies, but with very little incentive in sight it is hard to determine how much these companies are willing to invest in India.