Aids drug prices to fall if Gilead fails to defend patent application


NEW DELHI: Price of a crucial AIDS drug may fall further if Cipla and AIDS patients succeed in their challenge to a patent application filed here by US-based Gilead Sciences Inc.

Gilead Sciences Inc, which is set to defend its patent application for a block-buster AIDS drug before the government, has said that its Indian partners (10 Indian drug-makers) will not be required to pay the 5% royalty if it loses the case.

This is despite the fact that Gilead’s agreement with the Indian drug companies was inked well before the patent office started examining its application.

“As per our agreement with the Indian companies, we would not get any royalty if we do not get patent protection. We took the risk of giving our technology to Indian companies keeping the interest of patients in mind. We could have insisted on royalty even if we lost the case,” Gilead’s senior vice president and general counsel Gregg Alton told ET.

The hearing at the patent office, initially scheduled for Tuesday, has been postponed for a few days on technical grounds. “We are confident that we would get patent for Viread which has patent protection in 30 other countries including the US,” he said. “If we are granted a patent, there would be no change in the agreement with Indian companies.

They can continue to sell the drug in India and in 95 other countries for a 5% royalty. They are also free to make different dosage forms and combinations of the drug,” he said.

The agreement is valid till the life of the patent (20 years from grant of patent), after which the partners need not give any royalty.

To many, Gilead’s strategy of not demanding royalty if it fails to get a patent looks risky. In fact, the company was responsible for forcing Cipla to lower the price of its version of the drug by half (from about Rs 32,000 or $700) recently, by announcing non-exclusive manufacturing and marketing deals with the Indian companies.

“Cipla has already dropped the price 10 times since the drug was introduced in Indian market in 2000. With more manufacturers, the price would further drop noticeably,” Cipla joint MD Amar Lulla said.

Indian companies are expected to launch the generic version of Viread by the year end. There are about 50 lakh identified HIV patients in India, of which about 30 lakh are on treatment.


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