Two Indian states, Maharashtra and Jharkhand, have requested for permission to import Remdesivir, the anti-viral drug from Bangladesh. With COVID cases exploding all over the country, particularly in major urban centres in Maharashtra, Delhi and other states, the frantic effort to source Remdesivir from all available sources has acquired greater momentum.
Remdesivir is the only drug approved so far, for the treatment of COVID patients in life-threatening stages. Though not a silver bullet for a definitive cure, the anti-viral drug has been tested on patients with positive results.
Indian Production of Remdesivir
Currently, Remdesivir is being produced by seven Indian companies under a voluntary licence agreement with Gilead Sciences, the California-based American biopharma company. Gilead, the patent holder of Remdesivir, has signed agreements with four more Indian Pharmaceutical companies for the manufacture and marketing of the drug.
Another Indian company has applied for producing the generic version.
The Drugs Controller General of India [DCGI] has yet to decide on giving permission for the manufacture and marketing of this drug by these Indian companies, though Gilead has received permission to market Remdesivir.
The extraordinary surge in COVID cases has created a shortage, forcing the government to ban its exports and urge manufacturers to increase production. The short-term gap between production and demand cannot be met immediately and the shortfall must be met by emergency imports.
Debate on Pricing of Remdesivir
The whole issue has now become mired in a debate on pricing between cost of manufacture of the patented drug under licence versus the generic imported version at a much lower cost. Bangladesh, as a Less Developed Country [LDC], as per the UN’s classification, has taken advantage of its LDC status to produce the generic version, even in the absence of any permission from Gilead to manufacture the drug under licence. LDCs have been given a carve-out in the Doha Declaration and do not have to implement the TRIPS patent laws till 2033. Thus, there are no international restrictions on Bangladesh to manufacture and sell copies of patented products and also export them. Since cost of production in Bangladesh is relatively lower, the generic versions of Remdesivir manufactured there are competitive in the international market.
Given the soaring demand and huge potential profits for the pharmaceutical companies, Gilead and its collaborators in India are likely to oppose the marketing of the generic version. With each dose of Remdesivir from Bangladesh expected to cost around USD 160-170, the Indian government will be under pressure to adopt policies that will make the drug more affordable.
It is likely that the Indian government and the pharma companies will have to reach an understanding on the pricing issue.
Why Compulsory Licensing for Remdesivir is Last Resort for the Govt
The government has the power to invoke Compulsory Licensing, as per Clause 92, Chapter XVI of 1970 of the Indian Patents Act and the international agreement on Trade Related Aspects of Intellectual Property Rights [TRIPS]. Compulsory Licensing permits waiver of Patents, under defined conditions in an emergency situation. This permits production and marketing of a patented drug without the consent of the patent holder. A pharma company can apply for compulsory licensing or the government can suo motu direct the Controller of Patents to issue a compulsory licence in an emergency.
Compulsory Licensing is the last resort for the government because it has been a controversial issue, with Western countries opposing this provision on the ground that pharma companies will be demotivated from funding innovative drugs if they cannot derive profits from their spending of research and development.
India and several other countries have asked the WTO for a waiver of patents on COVID vaccines. Western countries have opposed this move, though there is growing support for a temporary waiver even in the US.
Clones of Remdesivir in Bangladesh Market
Bangladesh has been very protective of its domestic pharma market. It has a mature pharma industry and this sector is technologically quite developed and enjoys stringent protection under various regulations. Domestic production meets 97 percent of the demand for medicines and the industry exports APIs and medicines to various countries, including developed ones in Europe.
Branded Indian drugs are usually smuggled into Bangladesh and it is not uncommon for a pharmacy in Dhaka to offer Indian-made medicines under the counter, at a higher price. India provides around 30 percent of API needs of Bangladesh’s pharma companies.
The other major player in APIs is China, which has 60 percent of the market. Sun Pharma, India’s largest manufacturer of generic drugs, operates a manufacturing plant near Dhaka under a company by the same name incorporated in Bangladesh.
Bangladesh’ s pharma companies have moved swiftly to manufacture Remdesivir clones.
Versions of Remdesivir have been launched by companies like Eskayef and Beximco under brand names Remivir and Bemsivir respectively. The patent holder Gilead has refused to verify the authenticity or effectiveness of the copycat drugs being produced in Bangladesh and confirms that no licence has been provided to any Bangladeshi company. Nor have these companies applied for permission to market their version of Remdesivir in India.
‘No Formal Request’ by India for Remdesivir
According to these companies, no formal request has been received by them from India and only informal enquiries on export price were received. Importing from Bangladesh may run into regulatory hurdles, as this may violate patent laws.
If the Indian government decides to import, for use in government hospitals distribution via government dispensaries, then exceptions, under the patent law, are available. Smuggling of these drugs into India have already started.
What Indian Govt Must Do
Time is running out and the supply of Remdesivir has to be ramped up. The Indian government has removed import duty on the drug and the APIs required to manufacture it.
Russia has offered to export Remdesivir. The issue for the government is to decide whether to allow import of Remdesivir or its clones that are manufactured in Bangladesh.
While imports will be on commercial terms by private companies, the Indian government can use its prerogative to import the drug, and the crucial aspect will be pricing. This will put pressure on Indian companies to lower prices which will also be decisive in approving imports from Bangladesh.
India’s demand is huge and will be leveraged by the government to reduce prices.
(The author is a former Secretary in MEA and a former Ambassador; a founder Director of DeepStrat LLP, a new think-tank, he is a Visiting Fellow at ORF, Delhi. This is an opinion piece, and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)
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