Foreign drug companies have warned that the use of compulsory licensing provisions to allow local companies to produce low-cost variants of patented essential medicines can adversely impact the flow of foreign direct investment in the pharmaceutical sector.
It may also affect product supply partnerships and reduce incentives for local companies to innovate, said Intellectual Property Federation (IPF), a UK-based lobby group that comprises drug majors Eli Lilly, GlaxoSmiKline, Merck Sharp & Dohme as members.
Responding to the discussion paper on compulsory licensing floated by the Department of Industrial Policy and Promotion (DIPP), the IPF said it will not accept the tenor of the paper that suggests extensive, systematic, compulsory licensing, particularly with a view to reduce prices of patented products.
"The grant of a compulsory licence to reduce prices or stimulate local production is rarely an appropriate policy tool and should only be contemplated in extraordinary circumstances," it said.
The multinational drug industry views were also reflected in submissions by Pharmaceutical Research and Manufacturers of America, Japan Pharmaceutical Manufacturers Association, Japan Intellectual Property Association, USINDIA Business Council, INTERPAT and Organisation of Pharmaceutical Producers of India, among others. The world's largest drug maker, Pfizer, has also echoed similar feelings in a separate response to DIPP.
The discussion note seeking public views, put out by DIPP a month ago, has attracted response from about 25 stakeholders. While the groups and firms representing foreign multinationals were against frequent use of "compulsory licensing" provisions, patients groups such as Cancer Patients Aid Association, NGOs such as Oxfam India and a Congress party Lok Sabha MP Jyoti Mirdha were supporting the need for compulsory licensing.
Indian Drug Manufacturers Association, Indian Pharmaceutical Alliance, Federation of Indian Chambers of Commerce and Industry, Association of Clinical Research Organisations, Biotechnology Industry Association have already responded to the DIPP discussion note.
Discussion notes are part of the central government's policy-making strategy through active stakeholder consultation.