Industry ministry suggests mandatory third party licensing of patented drugs

The industry ministry has suggested mandatory third-party licensing of production of patented drugs in the country in order to check the random acquisition of Indian pharma companies by multinationals and the jacking up of prices.

Alternatively, foreign direct investment in the sector should be restricted to bring down cost of medicines in the country, commerce and industry minister Anand Sharma said in a communication to minister of health and family welfare Ghulam Nabi Azad.

At present, 100 per cent FDI is allowed in the sector through automatic route.

In a discussion paper released today, the Department of Industrial Policy and Promotion (DIPP) has suggested the introduction of compulsory licensing under the Indian Patent Act.

Compulsory licensing mechanism helps to achieve two objectives  - rewarding inventions while making them available to the public during the term of the patent. Such an intervention mechanism helps balance the rights of the patent holder with its obligations to ensure working of patents, availability of the products at a reasonable price, promotion and dissemination of technological invention and protection of public health and nutrition, the paper noted.

The proposed policy review comes in the wake of rising public concern over rising prices of essential drugs in the country and the large-scale acquisitions of Indian pharmaceutical companies by foreign multi-nationals in the recent past.