India Forces Drug Companies To Give Up Patents Early

It's part of a program to make pricey Western drugs affordable to Indian citizens, too.

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Nexavar, a kidney and liver cancer drug made by Bayer, costs an estimated $69,000 for a year of treatment, Forbes reported in 2012. That year, an Indian company got a license to make a generic version of the same drug and sell it at a 97 percent discount. The license came from the Indian government, without consulting Bayer. Now the government is preparing to give out more licenses for Indian companies to make expensive Western drugs for Indian citizens to take, Bloomberg News reports.

The Bloomberg and Forbes stories offer a glimpse into a fascinating practice that's got Western drug companies riled up and seems to have no easy solutions.

The license-giving program is the Indian government's way of making lifesaving drugs affordable to its people. Nexavar's $69,000 price tag is 41 times the per capita income in India, Forbes points out. The drugs the government committee is now considering for licensing include those for HIV and diabetes, which affect tens of millions of Indians. (Previously, the government committee only looked at cancer drugs, so the addition of these common diseases are a first, Bloomberg reports.)

At the same time, drug companies say the practice is unfair, with Bayer CEO Marijn Dekkers telling Bloomberg it is "essentially theft." The generics licensing, offered without the patent-protection period drug companies enjoy in the U.S. and other western nations, undercuts companies' ability to recoup the billion-dollar costs of researching new treatments. It discourages companies from making the investment needed to find new drugs, Merck told Bloomberg.