Compulsory License for Nexavar: A Laudable and Revolutionary Step

The first ever compulsory license granted for the cancer drug Nexavar to the Indian Pharma company Natco, which has offered to sell the monthly dose of the medicine at Rs. 8,800 vis a vis Rs. 2,80,000 being charged by the Bayer AG of Germany due  to its monopoly is a welcome move of the Indian Patent Office. The bold ruling of P H Kurian, the Patent Controller of India  is the first ever step of the Indian Patent Office, ever since the change of law from, process patent to product patent on the drug molecules, invented after January 1, 1995. Indian Patent office has paved the way for the future course, for the patent administrators in India and world over, especially in the developing countries.

The multinational companies dubbing the decision ‘as disappointing and another blow to innovation’, should feel ashamed for profiteering more than 3300 percent out of human sufferings. The Indian generic company Natco would also invest in the R & D, to develop the process to synthesise that drug at its end, and earn profit even at a price just 3% of what is being charged by the monopoly manufacturer, the Bayer AG of Germany and that too after paying a royalty of 6 % to the Bayer AG, as ruled by the patent controller. There are a number of other drugs, which also fall in the category of monopoly drugs, even as per the definition of the Food and Drugs Administration (FDA) of the US. Most of which are patented and exhorbitantly priced. All these need to be contested for compulsory licensing.

Some such examples, out of scores of such monopoly priced drugs, need a mention here. A single 50 ml injection of Roche’s anti-cancer drug Herceptin is sold at  Rs. 1,35,200, Merck’s Erbitux costs Rs. 87,920, Bristol-Myers-Squibb’s Ixempra sells at Rs. 66,460, Pfizer’s Macugen is being sold at Rs. 45,350, and Sanofi-Aventis’ Fasturtec at a price of  Rs. 45,000. Most of these are used against Cancer, Chronic pain management, Diabetes, Cardio-Vascular disorders and other Chronic ailments.

There is a point to feel jubilant for the masses, yet, caution is also needed, and public-health-groups should be vigilant to join as intervener, if the Bayer moves to the Supreme Court. Otherwise, if the Bayer would move to the Supreme Court and get an injunction, the issue would hang in air for an indefinite period. One should not forget that when Novartis, which was charging approximate Rs. 11,00,000 for its anti-cancer drug ‘Glivec’, obtained a stay from the Chennei High Court for more than a year, against the economically affordable Indian version of its basic compound, the Imentinib and 24,000 blood cancer patients had to suffer for months during the period of  stay, obtained on false pre-text of the molecule being of a date later than January 1, 1995. While the molecule was older one and  the court vacated the stay after the hearing was over.

In this case also, a section of commentators are advising the Natco to go for a compromise with Bayer and not to insist to sell Nexavar at such a low price. But, since the Natco would already be paying 6 % royalty on its sales, as ruled by the patent office, to the Bayer for its  invention, even at this low price.  This 6 percent is a fair reward for Bayer’s invention. So, people should raise strong voice to strong then the hands of the patent office and the Indian Pharma company Natco, with the purpose, that other Indian companies  also come forward to apply for compulsory licenses to make the costly monopoly medicines available at affordable prices.

This single decision in the history of new post-WTO patents regime has already sent shivers down the spine of the foreign Pharma MNCS. Therefore the ‘ Roche Holding AG’  a swiss pharma MNC has within days of this decision, bowed down and has announced to sell cheaper versions of its two costly anti-cancer drugs the Herceptin and Mabthra.

The single injection of Herceptin is available at Rs. 1,35,000 and Mabthra at Rs. 76000. But the proposed prices for a cheaper version of the two, would not  be as low as is being offered by the Natco by virtue of its compulsory license . Hence, other Indian pharma companies should come forward to make the costly monopoly priced medicines available at affordable prices, including these two. Moreover, Roche has though announced to sell these two medicines at a lower price, by a different name in India, but that would be  too take i.e by the end 2012 or 2013.

 Moreover, such a move by the other Indian pharma companies would save costly foreign exchange for the country, help to improve country’s balance of trade, enhance R & D in the pharma sector and facilitate growth of the Indian pharmaceuticals sector. This would also pave the way for the Indian generic sector to improve its outreach world-wide, if the Indian players succeed in getting compulsory licenses in other countries as well, as has happened when the sun pharma of India had got a compulsory license from the US for the anti-cancer drug Lipodox, the monopoly drug of Johnson & Johnson.

So, the social organisations, government and all political parties should explicitly support the Natco and Indian patent office in order to pave the way for many more such compulsory license applications. It is also necessary, to ensure that the Bayer AG do not drag the issue to the Supreme Court to kill time and compel the Natco to agree to compromise with the monopoly firm Bayer. Moreover, pressure of public opinion is also necessary so that issue is not dragged to the Dispute Settlement Body of the WTO, some time later.

The US protest over this issue of compulsory license to the Natco for this life saving drug issued by the Indian Patent Office on the ground of public health problem, is altogether unwarranted. The allegation of the visiting US Commerce secretary that it would discourage new investments & dilute the international patents  regime is not sustainable on any count. The Natco has been asked to pay  a royalty of 6% to the Bayer AG is the fair reward for the Bayer AG, the inventor. Profiteering to the extent of 3300% in the name of promoting research cannot be justified, that too in case of medicine for deadly diseases like Kidney & liver  cancer. The Minister of Commerce & Industries of India, the Mr. Anand Sharma has rightly defended the issuance of the compulsory license, by the Indian patent office and  the Government of India should stay firm on this issue and continue to do so in other such cases too. The patent office has strictly complied with agreement on TRIPS of the WTO. Patent should be used only as a means for fair rewards for the R & D, instead being allowed to be used as a tool for monopoly profiteering.

The AIIB, India and Changing Economic Landscape

The global financial architecture is subject to experience a sea change in the aftermath of the decision of major Western powers to join the Asian Infrastructure Investment Bank (AIIB), being floated under Chinese initiative. The twin major economic powers viz. the Japan and the United States have already got isolated and their apprehensive displeasure too may come true after this new realignment of the global economic diplomacy wherein this present century may turn into a Chinese Century. The Chinese initiated twin development banks, viz. the BRICS bank and the AIIB may bring a major shift in the global power-balance by paving way for gradual replacement of the 'Washington Consensus' by a 'Beijing Consensus' as a pre-requisite in global economic affairs. India has though, agreed to be among the founder members of both the China-proposed ventures, but China would enjoy a relatively more affirmative influence in both the ventures by virtue of her greater capital contribution and GDP. So, it is quite imperative that the AIIB with 57 or more participating countries and dominated by China, can enable it (China) to have greater influence, to wean many countries away from India, if it would have greater influence over the Board for Approval of Infrastructure Loans. Though, India would have one of the vice Presidents in the governing Board of the AIIB, yet India and other major powers should ensure that the board of the AIIB for loan approvals does not come under more affirmative Chinese influence in loan sanctions. India should now even think to endeavor enhancing greater economic integration of South Asia at least to retain the traditional proximity of the countries of South Asia and Indian Ocean region with it. The Asian Development Bank founded in 1966 with the participation of 31 countries and regions from Asia, North America and Europe is headed by Japanese president alone wherein, Japan accounted for 15.67 percent, of its capital followed by the U.S. 15.56 percent, China 6.47 percent, India 6.35 percent, Australia 5.8 percent, Canada 5.25 percent, Indonesia 5.17 percent and South Korea 5.05 percent. Though it headquartered in Manila. Though the ADB is believed to maintain fairness and impartiality as applications being made to it for loans are screened by a Board of Governors, made up of representatives from all member nations wherein no single country exerts undue influence. But, with respect to the AIIB, the US and Japan apprehend that, it would be under strong Chinese influence and may not have such an impartial board for screening loan applications. Moreover, once the AIIB would start its operations, No country would then be able to stop Beijing from making unilateral decisions. So, its Articles of Association need to be cautiously balanced for neutrality. Any presumption of making the AIIB as an impartial international financial institution through inside efforts after joining it may sound genuine and feasible now, but would any member country endeavor to clash head-on with China, once the details are worked out.  

Especially when, China is believed to have proposed this new infrastructure bank with the  intent to compete with and overtake Euro-American controlled funding agencies, and securing decisive benefits for Chinese infrastructure developers. Moreover when, inspite of the U.S. opposition, 57 nations have already declared their intent to join it, including 14 members of the G-20. Shall any other country would have any superior influence than the US? It was inspite of U.S. objections, the U.K. Chancellor of the Exchequer, George Osborne, announced to join the AIIB, and the Germany, France and Italy immediately announced to join it. Israel’s decision to join the bank was all the more astonishing. Even Taiwan too tried to become a charter member, but China rejected her application, because the mainland considers Taiwan as a province of China. Indeed UK is believed to be having the ambition that London can evolve as a major clearing market for the Chinese yuan (CNY) if that currency ever becomes freely convertible, along with an apprehension as well that, if it stayed out of the AIIB then, other financial centers might overtake London in this regard.

Now, when the American economy has already gone down from occupying half the share of the world economy 70 years ago to occupying less than a fifth of it today. The writing on the wall is clear that the trend of decline would continue. Notably, the aggregate economic activity of the BRICS countries alone now equals that of the United States, and the Chinese GDP alone is more than 60 percent of the US in general terms and more than 120 percent of US manufacturing. China tops the world in global foreign exchange reserves too. So, with the growing influence of the "Beijing consensus" in global affairs, out of its growing economic clout, China would now expand its role in shaping the global financial architecture. Although China's actions won't immediately overturn the existing international economic and financial order, but, they are creating a grumpy imbalance among the major economic powers.

The 69^th anniversary year of creation of Bretton Woods Institutes (IMF and World Bank) after the, cessation of Second World War 70 years ago. The two new rival banks viz BRICS Bank and AIIB would redefine governance of the world economy as well as the global financial architecture, have a different ideological pretext. The fundamental ideals of the Bretton Woods system have been a free market economy and democracy. In contrast, the AIIB is being floated by an authoritarian market economy of China that does not permit democracy political opposition, freedom of expression and open space which ultimately might establish the hegemony of Peiking consensus. Besides, this new infrastructure bank of China may also help it to redeem its ambition for a globalized renminbi currency, most likely to upend the 70-year-old global economic order pivoted around Euro-American economies and currencies. So, India should be vigilant to ensure parity with Chinese might at all decision making for of the AIIB.

A Year of Economic Turnaround with Inclusive Growth

The economic upturn and financial inclusion achived in just one year after the landslide victory of the NDA on the promise of inclusive growth is almost  unprecedented in the 67 years' post-independence history of the country. Economy has rebounded on a growth trajectory of 7.5 percent, eclipsing even the China within a year, from the lowest ebb of last one decade. The wholesale and retail price indices are now reining at (-) 2.3 percent and 4.9 percent from a record high of 4.6 percent and 10.2 percent respectively. The current account deficit (CAD) too is now at less than one percent of GDP after hovering at a record high of 6.1 percent, only a year before.  On top of all, the new project announcements are picking up fast, with the promise of a sustainable revival. The NDA government has well excelled to bring down the double digit CPI inflation hovering at 10.2% level since 2007, to 4.9 percent now. The prices of food articles were up by 9.5% only a year ago in May 2014 over May 2013. The potato prices were up by 31% and onion prices too were surging fast at a time when monsoon was deficient by 12%  against a Long Period Average (LPA). So, the government then, restricted exports of onions and even dumped the imported onions in market at prices below the import cost and also raided onion hoarders. In July, it also took a major decision to liquidate 15 million tonnes of food grain stocks to curb food inflation and in September the APMC law was also changed in Delhi to allow trading of fruits and vegetables outside the mandi.

 But, the flip side of the story was also equally worrisome, where the falling global prices of agri-commodities were leading to a slowdown in exports of several commodities, causing almost a crash in domestic agri-prices, most notably of cotton. The government therefore, put the Cotton Corporation of India (CCI) into action, to procure more than 9 million bales at minimum support prices for giving  a breather to cotton farmers and avert a potential spate of farmer suicides in the cotton belt. Focus is also being laid now upon the development of irrigation facilities too, under the Pradhanmantri Krishi Sinchai Yojana to further help and support the farmers. A fund has also been proposed to be set up for marginalized farmers with a corpus of Rs. 25,000 crores in the NABARD.

The most praise-worthy feat of the Modi government is the attempt of financial inclusion of masses, wherein the 80 % of the Indian population was untouched hitherto till last year, by services like banking, insurance and pension for last 67 years, notwithstanding the nationalization of banks and insurance sector long back. Almost 68 percent of the population had no bank accounts only a year ago. The Jan Dhan Yojana has made a miracle of opening more than 13.2 crore bank accounts with the infusion of Rs 10, 500 crore into the system in such a short spar.  The three recently launched social security schemes viz. the Pradhanmantri Jeevan Jyoti Bima Yojna (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana have got nearly 6.5 crore subscriptions. The PMJJBY scheme offers Rs. 2 lakh cover for a mere Rs. 330 per year provided they are bank account holders and are from age 18-50. Under the PMSBY, a renewable one-year accident cum disability cover of Rs. 2 lakh is provided for a paltry premium of Rs.12 every year which an ultimate social security cover unheard any-where in the world. The Atal Pension Yojana is aimed to benefit people who work in the unorganised sector and do not fall under the ambit of regular pension. The scheme offers pension under various brackets depending on the contribution made over a period. The scheme is for people in the age bracket 18-40 years. The social focus of the government is quite unambiguous and explicitly evident from the very fact the government has continued with previous schemes and linked them with technology for targeted interventions through the JAM. The JAM (Jan Dhan Account, Aadhaar Cards and Mobiles number Trinity) as mentioned in the budget speech is an example of the same.

Government’s move for cooperative federalism is also well reflected in increased tax devolution from 32% to 42% to the states, in pursuance of  the report of the Fourteenth Finance Commission, which would  ease the central government stranglehold on states, hitherto  mandating them as to  which schemes to be run and how. Moreover, allocation of royalties from coal auction to states will also go a long way in bringing prosperity to mineral-rich states.

The index of industrial production (IIP) also reveals growth and revival in most of the important sectors like manufacturing, mining and electricity among others indicating a rapid turnaround in offing. The separate ministry for entrepreneurship, along with thrust on skilling would further bring a sea change on the front of fast overcoming unemployment and poverty. Industrial policy initiatives for 'Make in India' can also do wonder if focused on providing impetus for the development of indigenous products and brands under the scheme. Ultimately the government has to evolve ways to mobilize domestic resources as well, for investment in trade, commerce and industry. Impetus being given for greater domestic participation in defence production is a bold step towards and needs to be further stepped up  

In the area of education as well, the government in past one-year has come up with several new initiatives including the Beti-Bachao Beti Padhao Abhiyan, Swachh Vidyalaya and GIS Mapping of schools and has opened several new institutions. Moreover, with respect to higher education the government seems equally keen to have holistic development with several new AIIMS, IIM and IIT like institutions being opened in states that have a paucity of these.

 The focus of the government for up-gradation and development of infrastructure is well reflected in the push for railway up-gradation and improvement in customer service along with setting up of a target of 30 km roads a day by 2017. In March this year 11 km of roads were being laid. In the broad ambit of infrastructure covering the development of roads, highways, ports, airport, waterways, canals, and railways clearances for projects close to Rs. 6 lakh Crore across 10 key sectors shows sincere intent on the part of the government for infrastructure development. The successful auction of the coal mines, which is slated to rope in a massive 15 lakh crore over the 30-year timeframe if all the mines are auctioned and work at optimum output. With India Inc’s hesitation to invest in infrastructure the government has boldly said that it would finance infrastructure projects more directly till the PPP problem was sorted out—most PPP projects, across the board, are in all manner of trouble, ranging from lack of clearances to lack of funds with the promoter.

Rampant corruption and cronyism, that prevailed in  allocating mineral rights and other assets to favoured beneficiaries  is no more there under the  Modi government, which has changed that completely by holding fair auctions for both radio spectrum and coal mines, and enacting legislation for auctioning other minerals. Stashing of black money abroad has been proposed to be made punishable with deterring punishments. The much-needed de-freezing of defence orders and contracts and pruning the list of defence products that required licences, would also enhance growth. There has been a spate of other executive measures for improving the ease of doing business, including larger scope for self-certification, bringing together 10 licensing requirements on the single e-biz portal, setting up of new NMZs and an industrial corridor authority.

Modi government has swiftly ended the previous regime’s policy paralysis and cleared stuck projects worth Rs 7 trillion. The economy is therefore, now in quite a better shape today. Inflation is down; growth rate is up, foreign reserves have grown by 12% from $304 billion to $341 billion in a year; current account and fiscal deficits have been reined in and a series of investment projects have been cleared and new ones announced, especially in the public sector for quick impetus.

Maggie Muddle and Food Safety: Issues are much Bigger

The 100 billion dollar Swiss Foods Major Nestlé has ultimately been asked by the Food Safety and Standards Authority of India (FSSAI) to withdraw 9 variants of Maggi, for three alleged violations of the Food Safety Standards Act (FSS Act), all posing serious threat to food safety and Public Health. These three violations are: (a) presence of 'Lead' detected in the product in excess of the maximum permissible levels of 2.5 ppm, (b) misleading labeling  information on the package reading “No added MSG”, and (c) release of a non-standardised food product in the market, viz. “Maggi Oats Masala Noodles with Tastemaker” without risk assessment and formal grant of product approval. In the process, celebrities endorsing the product have also been found guilty for conniving in promoting such toxic products and are being booked for this malfeasance.

The Indian law with respect to Monosodium Glutamate (MSG), the flavour enhancer allowed to be added to food as per appendix A of the Food Safety & Standards (Food Products Standards & Food Additives) Regulations, 2011, specifically prohibits its use in certain specified food items including noodles (dried products). So, when MSG has been found in Maggi, the Nestle had to be booked long back for it.

Likewise with respect to Lead as well, the Food Safety & Standards (Contaminants, Toxins & Residues) Regulations, 2011, clearly state that no food article should contain any crop contaminants or insecticides which are not mentioned in the regulation. Under this regulation, a limit for Lead content has been imposed for certain specified items, and for all other non-specified food items a limit of 2.5 PPM by weight has been prescribed. Noodles are not specifically mentioned in the list of specified items, so the maximum limit for Lead content is 2.5 PPM. Therefore, Lead content found above this limit in lab-analysis is violation of the regulation and punishable.

The FSSAI needs to be even more pro-active and vigilant in dealing with safety, by laying down stringent standards for food articles and regulate their manufacture, storage, distribution, sale, import and labeling , to ensure availability of safe and wholesome food. In this regard, there are two more issues which need urgent attention and redressal through proper enactments. One of them is mis-describing the products for flouting the prescribed standards. Two of such examples of deliberate mis-describing are use of the term 'Frozen Dessert' instead of ice cream for substituting cream by hydrogenated vegetable oil and  the other one is the use of the term 'beauty soap' in place of toilet soap to reduce total fat matter (TFM) from 75% (prescribed for toilet soaps) to 50% for cost-cutting. The Anglo-Dutch company, Unilever's Quality Walls' brand of Ice-cream and the Lux beauty soap are an example of each of them. So how would one feel if a carton of ice cream has in a small, and inconspicuous corner of the label marked with the term 'frozen dessert'.  Today, in India, frozen desserts have taken over as much as 40% of the ice cream segment. Is it not a fraud? Frozen desserts are made with vegetable oils and usually those vegetable oils that we often avoid in our diet like coconut oil or palm oil. Ice-cream has to be made from milk and dairy fat instead of hydrogenated vegetable oil. The consumer gets confused that probably the beauty soap is superior to toilet soaps.

 The ministry of consumer affairs, food & public distribution too should have shown seriousness in claiming damages on behalf of innocent consumers, especially children, for misleading and deceptive advertisements by the food industry and making irrational claims through celebrities targeting children for creating a brand without any guilt which it had done though only now.

The other issue is of labeling genetically modified food being alleged to be all the more harmful and not allowed into European Union and several other countries. The ministry should also take a serious note of unlabelled genetically modified food (GM Food) for making the consumer aware of what is he going to eat. The FSSAI has to frame regulations relating to genetically-engineered or modified food in section 22. As consumers, we have the right to exercise our choice through a mandatory comprehensive labeling so as to distinguish between food derived from genetically-modified organism (GMO) and without GMO. A draft bill was developed more than a decade ago in the ministry to make it mandatory to label every food containing any GM content and state the names of countries where it was banned. But vested interested ensured that it could not be passed. The long-awaited definition of junk food based on WHO Standards on levels of salt, sugar and transfat found in the food also need to be made mandatory for labeling. The Maggi controversy should now trigger to better enforcement of food safety norms in all respects in our country.

Junk food needs to be marked so, as in the last twenty years ready meals have become a big business world-wide. In fact, we spent over $7 billion on them last year alone. As our lives are getting busier, ready meals have been fast replacing cooking from scratch. Therefore, intake of unhealthy ingredients like saturated fats, additives excess salt and sugar is on increase. There are six common reasons why one should avoid processed fast foods if one can. First, Vitamins and minerals are synthetic in ready meals, as the processes they (ready meals) undergo before being packed, ready meals become almost devoid of most naturally occurring vitamins and minerals. So, synthetic vitamins and minerals are to be pumped into such food. Second, they might make you fat, as the ready meals are more calorie dense than natural options and full of low quality unhealthy ingredients with high fat content. Three, they are full of sugar, fat or both, and make one obese. Four, they are packed with additives, preservatives and colouring pigments, all of which are mildly toxic. Five, they are full of excess salt which can cause fluid retention around the heart which may cause high blood pressure, heart failure, strokes and even heart attacks.

Sixth, they can cause Metabolic syndrome as the results from a study entitled  "Instant Noodle Intake and dietary patterns are associated with Distinct Cardio-metabolic Risk Factors in Korea", published in the Journal of Nutrition has shown that significant consumption of instant noodles increase the risk for Metabolic syndrome comprising a cluster of conditions which include increased blood pressure, high blood sugar level, excess body fat around the waist and abnormal cholesterol levels that occur together with increasing the risk of developing heart disease, stroke and diabetes. In recent years, South Koreans have been reported to be experiencing a rapid increase in heart disease with a growing number of overweight adults. Hyun Joon Shin, lead investigator of this study has found that eating instant noodles twice or more every week may cause metabolic syndrome, especially in women. He said that the gender gap can likely be attributed to biological differences (such as sex hormones and metabolism) between the genders, as well as obesity and metabolic syndrome components. Likewise, another potential factor in the gender difference is a chemical called bisphenol A (BPA),  present in the noodle containers is a well-known endocrine disrupter, and interferes with the way estrogen and other hormones send messages through body.

So it is high time that ready meals Industry takes cognizance of its social obligations towards public health and safety, and the statutory authorities come up with more comprehensive standards and are stringent from content to labeling.