In the absence of a full-fledged product patent regime, and an assurance and implementation of data confidentiality of the innovator companies, no major investments would come to India.
OPPI president Ranjit Shahani told FE, “Now is the time for the Indian companies to come out of their reverse engineering mode and move forward into the era of ‘innovative and R&D mode’ clinching the global opportunities.”
As far as the apprehension that the prices of drugs will go up post-2005, Mr Shahani said, “It is a myth that the prices of patented medicines in India will be high. A study by the National Economic Research Associates (NERA), Washington in nine countries across six therapeutic segments says that strengthening IPR does not have a measurable impact on real or nominal prices of existing drugs.”
“The prices of branded formulations are not affected as patent protection does not apply retrospectively to drugs already marketed in a country, therapeutic competition exists in each country; and regulatory environment in a country also dictates drug prices. So is the case in India,” Mr Shahani added.
He added that the Indian customer stands to gain in the form of medical advances without therapeutic substitutes.
“The real spur of research including contract research activities will come forth only in 2005. The current spend on R&D in India is hardly 2 per cent of turnover. This compares very poorly with 15-20 per cent in Western countries. Hindrances like lack of world standard Intellectual Property Rights and low returns on investment due to rigid administrative price control do influence MNCs’ decision to take up R&D in India,” Mr Shahani said. As far as China is concerned, Mr Shahani said it has made strenuous efforts to become a member of the World Trade Organisation. The speed and efficiency of reforms, infrastructural facilities and business-friendly approach help China steal a march over India.
He also allayed fears that the Indian industry will die a slow death. “It is not true and not supported by the experience of other countries. In Italy, for example, the Italian Pharmaceutical companies reacted to the introduction of pharmaceutical patents by entering into licensing arrangements for new products from abroad; developing off-patent products; concentrating their R&D efforts and resources in ‘niche’ sectors; and joining forces for common R&D projects through joint ventures. This can happen on a large scale in India as well,” Mr Shahani stressed.
Mr Shahani said, “Certainly enough has not been done. Although the government has time to introduce product patent regime by December 2004, it could have given a positive signal by introducing a sunset clause in the present Act.” Although the pharma body has welcomed the initiative by the government, it is concerned that a number of provisions in the Act dilute intellectual property protection to the detriment of the patent holder and favours local manufacturers who do not hold patents.