Compulsory license, India and universal health insurance

India recently approved a compulsory license for the cancer drug sorafenib. Bayer sold this drug for about $5500 for a month's supply. A generic version in India will sell for $180 . The move by India has been widely applauded by international NGOs involved in health policy. They justify the decision by pointing out that most people in India have very low incomes and simply cannot afford the drug at the price that Bayer wanted to charge, thus denying them access to this life saving intervention. For public health reasons, therefore, the only solution is breaking the patent monopoly through issuing a compulsory license, allowable by international law.

Nobody supporting the move, however, has pointed out that the drug was deemed to be too expensive also for the public health system in the UK. In 2009 the National Institute for Health and Clinical Excellence (NICE) ruled against the use of sorafenib within the NHS. The drug, providing an increase in life expectancy of a few months on average, was not cost-effective compared with other health care interventions, given the price Bayer charged for the drug. We therefore have the paradox that the drug is deemed a high public health priority in India, but not in the UK.

Let us assume for the sake of argument that Bayer had legitimate development costs to get the drug approved, and that these are more than the 6% of the net sales during the patent period, which is what Natco, the Indian generic drug maker, is required to pay to Bayer. After all, somebody has to pay for the research and development. This will now be the general population in countries where there are no compulsory licensing for this drug. The part of the Indian population who is as wealthy as this general population will not be required to pay for the research and development costs. While this may be entirely appropriate, an argument that this is in accordance with our sense of justice is required before we can accept it.

More important, however, is the question whether funds should be used to buy this drug in India at all, given the state of its health care system. There is no reason to believe that sorafenib will be equally available to everyone in India. Only those with influence and access to the system will get it. In addition, other interventions, with much higher health benefits, are not available to the vast majority of the Indian population. Should not the funds to produce sorafenib be used to fund these interventions, for those in India who now do not have access to these high benefit interventions? Instead, those who already have good access will receive a drug with marginal health benefits.

This is not to argue that compulsory licensing is wrong or should not be used. It is only meant to show that the issue of compulsory licensing cannot be seen in isolation from the wider issue of access to health care in resource poor settings.