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In what would likely be a windfall gain for India 's generic drug companies, the Kenyan government is learnt to have initiated a process to issue a compulsory licence to procure antibiotic azithromycin, a new generation drug on which Pfizer holds the patent rights. This licence, to be issued under paragraph 6 provision of the Doha Declaration on Trips and public health, will have a substantially bigger size compared to the first such licence, which domestic major Cipla has recently obtained from the Malaysian government.

Indian drug companies which manufacture and market generic versions of azithromycin include Wockhardt, Alembic and FDC. One or more of these companies are likely to be the beneficiaries of the Kenyan licence which is expected to be an omnibus one, covering supplies of the drug to the entire Sub-Saharan African countries, according to sources tracking the Kenyan move.

Sources said the licence to be issued by Kenya will aim to get from the CL holder azithromycin formulations in quantities that are enough to treat over 2m likely cases of pneumonia in sub-Saharan Africa .

Patent on Azithromycin is held by Pfizer. The MNC, which markets the drug in world markets that recognise product patents under the brand name Zithromax is, however, yet to launch the drug in India for want of patent protection. A macrolide antibiotic with varied uses, including for treatment of opportunistic infections caused by HIV/AIDS, the market for azithromycin is close to $1bn at present, and it is expected to grow considerably in next few years.

The compulsory licence which Cipla has obtained from the Malaysian government is for supply of four specified anti-retroviral drug formulations. The licence is being regarded as a test case regarding the enforceability of para 6 provision. The provision is meant to enable a generic drug manufacturer to manufacture and export a patented drug to a country with insufficient/no manufacturing capacity in the pharmaceutical sector. The facility can be used subject to specified conditions and safeguards formulated under the August '03 Geneva drug deal, which was alleged to be tilted in favour of the patent holders.

Under the licence, Cipla is empowered to export and sell the medicines under fixed ceiling prices to the government of Malaysia for exclusive supply to government hospitals for two years. According to the compulsory licence issued by the Malaysian government, compensations to the patent-holders require to be paid within two months of the date of import. The compensation amount is yet not known. Cipla is understood to be making its first shipment of the drugs under the Malaysian licence shortly. Among the APIs, the patents of Didanosine is held by Bristol-Myers Squibb, while GlaxoSmithKline owns the patent of Lamivudine and Zidovudine.

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