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Indian court backs patent stance

A patent bill that would prevent domestic pharma companies in India from making low-cost generic copies has been approved by the country's lower parliament.

A controversial drug patent bill, which would prevent domestic pharma companies in India from making low-cost generic copies of branded drugs, has been approved by the country's lower parliament.

While multinational pharma companies have given the news a cautious welcome, international aid groups say the new law will deprive millions of people access to life-saving medicines.

India has passed the bill in order to comply with World Trade Organisation Trade Related Intellectual Property Rights (TRIPS) requirements. Until now, the country had operated a system that issued patents for the process of manufacturing drugs, rather than for the drug itself.

Reaction among the Indian pharma industry was mixed. ìWe are glad that India has met the TRIPS commitments,î said Satish Reddy, managing director of Dr Reddy's Laboratories, the country's largest pharma manufacturer. ìThe amendments will encourage innovation in the pharmaceutical industry by ensuring that [patents] are protected.î

However, small and medium domestic companies have serious misgivings about the bill, particularly those that have built their business around copying in-patent drugs.

ìOur existence has been brought into question by the enforcement of a new excise regime,î said V S Chakravarthi, vice-president of the Organisation of Pharmaceutical Manufacturers representing smaller pharma firms. ìI think prices of life-saving drugs will go up initially, which will cause hardship for Indian consumers.î

Around 12,000 patent applications have been filed by multinational pharma companies for their patented drugs that are currently sold in India as generics.

International aid groups said the legislation would curb the supply of cheaper generic drugs to impoverished nations in Sub-Saharan Africa, Asia and Latin America, threatening the survival of hundreds of thousands of AIDS and cancer patients.

ìBecause India is one of the world's biggest producers of generic drugs, this law will have a severe knock-on effect on many developing countries which depend on imported generic drugs from India,î said Samar Verma, regional policy adviser at Oxfam International.

The Paris-based Medecins Sans Frontieres described the Indian move as ìthe beginning of the end of affordable genericsî.

The Indian parliament has added some amendments to the bill, which it says will curb potential abuses by multinational companies. These include exemptions of certain key drugs from patent protection after a waiting period.

Meanwhile, Dr Reddy's has secured $56m of funding as it plans to expand its generics pipeline in the US amid a climate of mounting costs.

Under the terms of the agreement, private equity firm ICICI Venture will fund the development, registration and legal costs related to the majority of Abbreviated New Drug Applications Dr Reddy's will make over the next two years.

30th September 2008

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