United States Commerce Secretary John Bryson raised concerns about India’s first compulsory drug license granting domestic drugmaker Natco the right to make and sell a copy of the patented cancer drug Nexavar. In a meeting with India’s Commerce & Industry Minister Anand Sharma, he said it would discourage new investments and dilute the international patent regime, according to a report in India’s Economic Times. He argued that the drug industry was very competitive and required sizable investment into research and development. “Any dilution of the international patent regime is a cause for deep concern for the U.S.,” he said according to the Times.

In mid-March, the Indian government took the unusual step of ordering a compulsory license of Bayer’s patented kidney cancer drug Nexavar because it deemed that too many cancer patients were dying because the patented drug was too expensive and not widely available in the country. The government ordered Bayer to license the drug to Natco Pharma, an Indian drugmaker. Natco will pay Bayer a 6 percent royalty and sell the drug for $176 a month. That compares to the $5,600 a month Bayer charges for the drug in India.

Sharma defended India’s decision as being in compliance with flexibility rules provided by TRIPS, or Trade-Related Intellectual Property Rights, Agreement of the World Trade Organization, which allows for such measures when a large number of patient lives are at stake. Under the rules, a compulsory license can be issued three years after a patent is granted without consent of the patent owner to address public health concerns. He said that Nexavar was too expensive for the majority of the Indian population and not widely available.

India’s action comes at a time when multinational pharmaceutical companies are seeking sales growth in emerging markets. It raises the possibility that government in other developing nations may begin to override other patents for costly but life-saving therapies they deem essential to national health.

The industry trade group Pharmaceutical Research and Manufacturers of America has also spoken out against the issuance of compulsory licenses as inappropriate. “Legitimate health emergencies that require making exceptions to intellectual property rights can and should be accommodated under the international framework, but only after exhausting all other efforts and under extraordinary circumstances,” says John Castellani, the group’s president and CEO.

“If countries begin to routinely use compulsory licensing, we could see a ‘race to the bottom’ in which governments in the developing world walk away from their responsibility to support research and innovation in public health,” he says.

India joins Thailand and Brazil as part of the small group of nations that have enacted compulsory licensing on drugs for public health reasons. Bayer is appealing the decision in the Supreme Court in India, which is also expected to issue a ruling in the long running patent dispute over Novartis’ cancer therapy Gleevec, which could have ramifications for many other drugmakers. Since 2006, India has contended that it is not a new medicine but a different formulation of an already patented drug that has not been show to have greater efficacy than the originally patented molecule. Novartis is contending that the efficacy clause in Indian patent law is discriminatory.

Companies may have to rethink their strategies for protecting their patent rights in India and other emerging markets and turn to partnerships with local companies to provide them with a solid footing. Just days after India’s granting of the compulsory license to Natco, Roche announced that it was cutting the price of two of its cancer drugs in India, Herceptin and Mabthera. Roche has partnered with the Indian company Emcure Pharmaceuticals, which will package the drugs and sell them under different brand names exclusively in the Indian market.