Compulsory licensing provisions under the Indian Patent Act will be put to test soon, as local drug makers are planning to use it to make low-cost versions of patented drugs.

At least six blockbuster drugs of foreign drug multinationals — Novartis, Pfizer, Merck and Bayer, among others — may be shortlisted by the domestic makers, industry sources say. The first compulsory licensing application should reach the patent office by mid-2011, they add.

Under the Patents Act, domestic companies can approach innovator companies with a request to permit them to manufacture and sell generic copies of medicines that enjoy patent protection in India after a minimum period of three years. If the innovator company fails to reach an agreement, which primarily involves a royalty fee for each generic drug sold, to be paid to them, the generic manufacturer can approach the patent office for a compulsory licence.

Two domestic drug makers, Cipla and Natco, are known to have already written such requests to global pharmaceutical MNCs for such a contract to manufacture an AIDS drug and a cancer drug, respectively. Natco’s request for permission to manufacture a generic version of cancer drug Sorafenib has been rejected by Bayer. Cipla is awaiting a response from Merck on AIDS drug Raltgravir. The next step, following an unsuccessful attempt to enter into a contract, will be to apply for a compulsory license.

According to sources, three cancer drugs — Nilotinib, exclusively marketed by Novartis under the brand name Tasigna; Sunitinib, marketed by Pfizer as Sutent; and Bristol Myers Squibb’s Dasatinib (brandname Sprycel) — are the other products eyed by domestic pharma companies for compulsory licensing opportunities.


The industry estimates the combined annual turnover of such medicines to be around Rs 300 crore. “Most of these are sold through direct channels and the market size is difficult to be assessed at the moment. However, entry of generic products, if and when it happens, can increase the affordability of these medicines by at least 10 times, thus benefiting lakhs of critically ill patients,” a domestic industry representative said.

The commerce ministry, which administers patent laws, is awaiting such compulsory licensing applications. “Companies had not been approaching the government to apply for compulsory licensing and foreign companies are finding an easy way out to enter the India market with joint ventures and takeovers,” said a government official. The official also said the government was planning to revive the country’s drug manufacturing capabilities in the public sector to enable life-saving drugs at an affordable cost.