Posted by: Audrey Erbes | June 11, 2012

China Institutes Compulsory Licensing Policy plus Events and Jobs

Our biopharma industry is changing rapidly as result of the patent cliff’s associated losses in blockbuster revenues not being replaced by income from new drugs due to the continuing poor productivity of Big Pharma R&D relative to the growing costs. At the same time there’s a slowing of revenue growth in the Western markets, there is a rapid growth in demand in the BRIC countries as millions become able to afford drugs. We are aware that jobs are being eliminated in the U.S. and the savings are being spent overseas in the BRIC countries where Big Pharma is developing new plants in the hope to sell their existing drugs to large populations just entering the middle class as well as to the masses who are becoming eligible for health care benefits from their governments. The lower cost of labor is not the only source of motivation as most recognize that the differentials are rapidly disappearing. The objective is to increase sales by taking advantage of this explosive growth expected in these highly populated countries. But the promise of a higher volume of sold drugs at prices that might end up too low to be profitable in order to compete with Chinese cheap generics is a great risk.

It’s no surprise that the governments of these same countries who have started to fund health care for this citizenry would prefer to purchase product at a cheaper price from their own companies than higher priced Western company drugs. This again not surprising development conflicts with the international corporations’ expectation to make up for lost revenues in the West with gains from this rapid expansion of sales based on much larger patient populations.

India has made it clear they don’t plan to pay Western prices for critical drugs and will resort to compulsory licensing for drugs still on patent to avoid this. They have just done this with Bayer’s Nexavar. They are willing to take away patent rights of international companies selling in their country in favor of a local generic company.

China has now followed the example of India but goes beyond India’s policy.  In addition to just providing lower prices for patented drugs sold in their country through compulsory licensing to a Chinese company, they expect to sell these drugs internationally as well. This will be a nightmare for international companies whose strategic business plans have just received a deadly shot across their bow. They trusted the government officials not to do something like this! See  details provided about this latest development in IP law in article written by Ed Silverman for Pharmalot blog entitled “China Changes Patent Laws To Get Cheap Drugs,” on June 8.

I just learned about this newest development in IP protection or rather lack of it this weekend while attending a CBA workshop. I had thought the expectation of replacing lost revenues by selling higher priced generics in China based on their citizens greater confidence in the safety and efficacy of Western products was a pipe dream. But now the environment will be even worse if Western drugs still on patent lose sales to cheap generics.

The upcoming Life Science Business Development course, June 21-22, in downtown San Francisco will offer section on intellectual property trends by Ginger Dreger, JD, MS, Partner in Arnold & Porter LLP’s Intellectual Property Practice Group when a discussion of this change will likely arise.

Now let’s switch to upcoming Bay Area meetings where you can learn about international developments that affect your business as well as discuss them:

  • BioCentury TV Today, See new program Webcast Starting Sunday, June 10, 2012, Continuously available starting at 9:00 a.m. EDT; Topic: “Breaking the Locks: Sharing the Clinical Trial Data;” Speakers: Dr. Peter Doshi, Post-Doctoral Fellow at Johns Hopkins Medical School and Professor Ruth Faden, Director of the Berman Institute of Bioethics at Johns Hopkins
  • Bio2Device Group, Tuesday Evening, June 12, 2012; Topic: “Antibiotic Resistance: A Mounting Threat of Epidemic Proportions;” Speaker: Deepti Jaggi, Ph.D., Co-founder, President and Chief Medical Officer, Vivonyx Inc.
  • GABA, Tuesday Evening, June 12, 2012; Topic: Wearable Devices: Hype or Help? Speakers: Skip Fleshman , Partner, Asset Management Ventures; Julia Hu, CEO, Lark; Monisha Perkash , CEO, LUMOback; Woody Scal , Chief Revenue Officer, Fitbit; Moderator: Steffen Bartschat, Co-chair, Software IG & COO LUMOback
  • East Bay AWIS, Tuesday Evening, June 12, 2012; Event: June Chapter Networking Social
  • Bold Workshop, Wednesday Morning, June 13, 2012; Event: “Positive Psychology at Work: New Approaches to Organizational Success”
  • San Francisco Business Journal, Thursday Morning, June 14, 2012; Event: Bay Area Biotech Forum: One-on-One with Tony Coles & Biotech Reporter Ron Leuty *N. Anthony Coles, President & CEO, Onyx Pharmaceuticals; Panel One: Biotech’s Next Move– *Craig Muir, Partner, Third Rock Ventures; *Glenn Oclassen, President & CEO, Transcept Pharmaceuticals; *Lissa Goldenstein, President & CEO, Auxogyn; *Gideon Bollag, Senior Vice President for Research, Plexxikon Inc.; Panel Two: The Next Big Thing*Tom Chalberg, President & CEO, Avalanche Biotechnologies; *Minnie Sarwal, Co-founder, Organ-I; *Andrew Gengos, President & CEO, Neuraltus Pharmaceuticals; Moderated by Ron Leuty, biotech reporter, San Francisco Business Times; Opening remarks by Christie Smith, Principal, West Region Life Sciences Leader, Women’s Initiative Leader, Diversity & Inclusion Leader, Deloitte Consulting
  • HBA, Thursday Morning, June 14, 2012; Event title: “Executive Breakfast & Panel Discussion: Commercialization in a Changing Environment;” Speakers: TomWiggans, Founder & CEO, Dermira; Scott Garland, Executive Vice President, Chief Commercial Officer, Exelixis; Chris Ehrlich, General Partner at InterWest Partners;  John Orwin, CEO and Member of Board Of Directors, Affymax
  • San Jose Biocenter, Thursday Afternoon, June 14, 2012; Topic: “The rise of Big Pharma VC Funds: Dream coming true or total nightmare?” James Schaeffer, Ph.D., Executive Director, Worldwide Licensing and External Research, Merck Research Laboratories; Jennifer Friel Goldstein, Director, Pfizer Venture Investments; Brad Vale, Ph.D., DVM, Vice President, Head of Venture Investments, Johnson & Johnson Development Corporation (JJDC) (TBC); Simeon J. George, Partner, SR One (GlaxoSmithKline);Lead Facilitator: Gregory W. Heibel, Partner, Corporate Group, Emerging Companies Group Member, Orrick, Herrington & Sutcliffe LLP
  • RAPS San Francisco Chapter, Thursday Evening, June 14, 2012; Topic: “The Steps to Preparing for a Successful FDA Advisory Committee Meeting;” Speaker: Jim DiBiasi, partner, 3D Communications

I’ll be at the Tuesday evening Bio2Device Group meeting in Palo Alto to hear about a new company with potential products for the infectious diseases and the Thursday afternoon Biocenter meeting in Menlo Park to learn more about the promise or nightmare of pharma VC funds. Hope to see some of you then.

You can download the full list of meetings Audrey’s Picks through August with details. Just right click on the highlighted title and open the pdf file for downloading. I’ve also imbedded a flyer with details about my upcoming Life Science Business Development course.

I’ve been concerned by the confused state of the biopharmaceutical industry and its very negative impact on the allocation and location of career positions in the Bay Area and the U.S. I’ll be addressing this more in the future as I research what’s happening. Meanwhile, here is my most recent Jobs That Crossed My Desk list.



  1. Ref: Akash Bhavsars recent visit to San Jose Bay Area/Fremont & RedwoodCityPort biotech-pharma company:

    Please introduce your services and your Edu Courses on IP at UCSC-Silicon Valley

    ***China Institutes Compulsory Licensing Policy plus Events and Jobs
    ***The upcoming Life Science Business Development course, June 21-22, in downtown San Francisco will offer section on intellectual property trends by Ginger Dreger, JD, MS, Partner in Arnold & Porter LLP’s Intellectual Property Practice Group when a discussion of this change will likely arise.

    • Hi, I no longer teach at UCSC Extension but only at UC Berkeley Extension.

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