Her remarks were made three months after India’s Patent Office, for the first time, granted a generic drugmaker a compulsory license to make a copycat version of a patented medicine. The license was awarded to Natco to make a generic of a Bayer kidney and liver cancer drug called Nexavar, although only for domestic distribution, although Bayer is appealing (look here). Around the same time, China amended its patent laws in a way that would permit compulsory licensing (read this).
"Unfortunately, compulsory licenses dissuade pharmaceutical and biotech companies from innovating or from bringing their products into countries that grant these compulsory licenses. In the case of India, I was quite dismayed and surprised when they did, indeed, decide to grant that compulsory license for a reason that, I think, did not meet international standards and was not due to, for instance, a national crisis," she testified.
"The loser in all of this will be Indian people patients (because) major pharmaceutical companies will delay bringing pharmaceutical in those countries," she said in response to questions from committee member Bob Goodlatte, a Virginia Republican. "We're consistent in our efforts to (stop countries from) further granting these licenses." She added that, despite concerted outreach to Indian government agencies, "unfortunately, our education efforts on this issue, to date, have not been successful" (and here are her prepared remarks).
Her remarks are likely to spark additional debate not only about the Natco license in India, about the US government role in the ongoing battle over providing access to needed medicines to poor populations. Drugmakers and biotechs often argue their patent rights are not being upheld in various countries and seek to mitigate generic competition, while patient advocates maintain US negotiators are too aggressively advocating for the biopharmaceutical industry.
Under the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights, or TRIPS, agreement, which governs trade and intellectual property rules, compulsory licences are a legally recognised means to overcome barriers in accessing affordable medicines (read here and here).
[UPDATE: She later attempted to soften her position on a USPTO Director's blog by writing that, "although compulsory licensing can be permissible under the TRIPS Agreement, we encourage our trading partners to consider ways to address their public health challenges while maintaining intellectual property rights systems that promote investment, research, and innovation. The broad interpretation of Indian law in a recent decision by the Controller General of Patents of India regarding compulsory licensing of patents, in my view, may undermine those goals," which you can read here.]