Innovation vs cheap healthcare: What is the priority?

It's one of the biggest battles to be fought in India's over Rs 60,000 crore pharmaceutical industry -- a battle that pitches innovator rights against affordable healthcare. Global pharmaceutical giant Bayer has challenged the compulsory license granted by India's drug regulator to local generic firm Natco and the hearing begins on the August 21. In the run up, CNBC-TV18's Archana Shukla examines the many issues at stake -- from the legal soundness of a compulsory licence, to India’s image as an IP protector, to the impact on MNC drug companies, to what happens to patients.

A 47-year old Meghalaya resident Kalyani Chetry was diagnosed with progressive kidney cancer two years ago. Since then she has battled not just the disease, but mounting treatment costs as well.
Kalyani Chetry, patient says, “We have to face inconveniences at home and spend Rs 50,000-60,000 on visits every two-three months. We even had to take out a loan.”
When Kalyani's cancer failed to respond to treatment, she was put on the only available life-extending drug - Nexavar - a drug discovered by German Pharma company Bayer. But, at Rs 2.8 lakh, a month's dosage of Nexavar cost more than Kalyani's annual family income.
Then, in March, Indian drug company Natco was granted a compulsory license allowing it to sell a generic version of Nexavar at 8,800 rupees for a month's dosage. That's a 97% price cut.
Chetry adds, "The burden has reduced significantly with the medicine price coming down. Our problems have eased. Compared to over Rs 2 lakh, the cost is just Rs 6,000 to Rs 7,000 now."
Chetry has Section 84 of the Indian Patent Act, 2005 to thank. It allows a Compulsory License to be granted in cases of national emergency or unavailability of affordable life-saving or critical drugs.
Dilsher Kalha, Pharma Secretary explains, "1 in 3 people in India borrow or lease their assets for hospitalisation expenses. Around 20 million people are pushed to poverty every year because of out of pocket spending on healthcare."
Submissions to the patent office suggest that less than 200 patients in India were able to use Bayer's patented Nexavar in 2011. However, the CL has brought it in the affordability bracket of many patients. However, Bayer and the international Pharma fraternity is alarmed with this move. Not just because Natco was given a compulsory license for a cancer drug, and not an epidemic or national health emergency.
Kevin Craig, MD, Political Lobbying & Media Relations adds, "New drugs don't develop on its own and a company like Bayer spends billions of dollars every year into R&D."
But patient advocates say the compulsory license order will force innovators to look beyond just profits.
Jamie Love, Knowledge Ecology International stresses, “If you have a product on the market and you are charging the price and only a tiny fraction of people who need it are only receiving it, you haven't really met the legal standards or also in terms of healthcare standards.”
This is India's first compulsory license and only the second one globally for a cancer drug. And while drug companies and their lawyers lock horns with the Indian government, cancer patients like Kalyani now have the means to fight the deadly disease with dignity -- at least for a little while longer.