Activists say law will make HIV/AIDS drugs unaffordable for most people.

The Indian government has passed a new law forbidding local companies from manufacturing copies of drugs patented elsewhere. Although last-minute changes to its wording loosened many restrictions, critics say the law will eventually raise the cost of generic drugs for millions of people in developing countries.

Companies in India, the world's leading supplier of generic medicines, were required to fall in line with World Trade Organization (WTO) rules by 1 January 2005. The government initially proposed a bill that was widely seen as favoring multinational pharmaceutical companies even beyond the WTO's mandate. But following widespread protests from groups such as Médecins Sans Frontières and left-wing political parties, the ministry of commerce amended the wording.

According to the revised version, generics manufacturers can oppose patents before and after approval and export patented medicines to countries facing a public health crisis. Patents can also be revoked in the event of “public interest.” The new version also forbids 'evergreening,' meaning that patents would be granted only to new products and not for the new use of a known product.

The law only affects patents filed after 1 January 2005. It has no effect on generics introduced before 1995, and companies can continue to copy drugs discovered between 1995 and 2005—for which patents are pending—after paying a “reasonable royalty.”

The new law will lead to monopoly and India cannot afford monopoly. , Yusuf Hamied, Cipla

AIDS activists say the ruling will cut the supply of second-generation generic drugs to poor patients. “If half of the 700,000 HIV-positive people in developing countries are able to afford antiretroviral treatment it is because of the Indian industry's ability to churn out copycats,” says Anand Grover, a lawyer with the Mumbai-based Affordable Medicines and Treatment Campaign.

But some generics manufacturers say the new law will in the long run be good for Indian science—and for business. “The amendments will encourage innovations,” says Satish Reddy, managing director of the Hyderabad-based Dr. Reddy's Laboratories.

In anticipation of the rule, several Indian companies have ramped up their research operations (Nat. Med. 11, 3; 2005). The expiry of patents on several drugs is expected to open up a multibillion dollar market in six years for Indian generic companies.

Still, some companies such as Cipla, a leading manufacturer of generic AIDS drugs, are unhappy about the new regulations. “The new law will lead to monopoly and India cannot afford monopoly,” says Yusuf Hamied, Cipla's managing director.