Will new IP policy ensure Sabka Vikas?

In our last issue, we highlighted Swati Spentose’s quiet rise to become a Rs 40-crore speciality API manufacturer

20151130ep02In our last issue, we highlighted Swati Spentose’s quiet rise to become a Rs 40-crore speciality API manufacturer. (See story: Swati Spentose: Small is the next big? in the November 1-15, 2015 issue: http:// http://www.financialexpress.com/article/pharma/cover-story/swati-spentose-small-is-the-next-big/160972/)

Continuing our quest for the hidden gems in the pharma sector in India, we present another one in the November 16-30, 2015 issue: Bliss GVS. Clocking a shade over Rs 400 crores in consolidated revenues in FY2014-15, the media shy promoter SN Kamath, who had to be coaxed into a photo shoot, anticipates a growth of 25 per cent in this fiscal, up from 18 per cent y-o-y in the previous year.

Bliss GVS’ route to this growth has been to forge an unbeaten path. It chose to specialise in suppositories and pessaries, a dosage form that has never quite taken off in India but has a large following across the world. The company claims to be the world’s largest manufacturer of suppository dosage form by volume, with their leading brand contributing to about 40 per cent of revenues. (See story Bliss GVS: Carving out a niche, pages 22-23 in the November 16-30 2015 issue)

Companies like Swati Spentose and Bliss GVS reflect the diversity of India’s pharma industry, with companies at different stages of their lifecycle contributing to the overall vibrancy of the sector. There is no doubt that the country’s regulations have fostered this growth over the past decades but calls for a global harmonisation of regulations, particularly when it comes to trade, intellectual property rights (IPR) and manufacturing standards, are now getting more strident.

Take for instance, the signing of the Trans-Pacific Partnership (TPP) deal in early October. Ratification by the individual signatory countries has not been a smooth process. Detractors of the TPP in Australia have highlighted how one of the provisions relating to ‘investor state dispute settlement (ISDS)’ process, allows foreign investors to block governments from introducing legislation that they deem harmful to their business/ investment.

The Labour Party and the Greens in Australia have objected to this provision, pointing out that this would effectively mean that the Australian government could be sued for enacting policy designed to protect its environment. This means that governments will have to choose between adhering to the TPP and potentially harming their interests, or facing action.

But countries are forming their own push back groups. After months of tough negotiations by least developed countries (LDCs), the TRIPS Council’s decided to extend the transition period from pharma patents and test data protection for LDCs for 17 years. But health groups point out that this hard won battle is by no means over; it will have to be sustained as individual governments of LDCs will need to use this window of opportunity to build safeguards into their own IP policies.

What will be the impact of such trade pacts? Dilip G Shah CEO, Vision Consulting Group says that the net outcome would be ‘a poorer image of the brand-name industry’ while ‘the generic industry too will suffer on several counts slowing down its growth and earnings.’ In an article published in CPhI Annual Industry Report 2015, titled ‘Mega Trade Pacts and Their Impact On the Pharmaceutical Markets’, he predicts that the full impact of mega trade deals like the TPP and the Trans-Atlantic Trade and Investment Partnership (T-TIP), in terms of an increase in the price of medicines and healthcare, will be felt by 2020.

Shah also predicts that this success will embolden the United States Trade Representative (USTR) to seek amendments to the TRIPS Agreement and push for more for ‘maximalist standards of protection and enforcement in the TRIPS Agreement.’ His conclusion however has the kernel of a solution: would BRICS or any other new alignment of the developing countries be able to ‘thwart this grand design?’

By all accounts, India’s draft national IP policy is doing the final rounds of touching up, and is due to be released this December. Prime Minister Modi himself alluded to it in his speech at the Indo-German Summit 2015 on October 6 in Bengaluru, assuring the audience that it ‘will be a progressive, and forward looking policy.’ This assurance was evidently not enough. In a roundtable at the same meet, concerns were again raised about India’s IPR policy and DIPP Secretary Amitabh Kant had to reiterate this message, saying that India would be coming out with ‘one of the finest IPR policies’ in the world in the next two months.

The overall impression is that India is on the defensive as far as the IP policy is concerned. IP policy experts have slammed the leaked version of the draft national IP policy, as being ‘generic, obvious and lacking in originality’ (See Spicy IP blog post by Prashant Reddy: http://spicyip.com/2015/10/16795.html). PM Modi is already on the back foot after the wipeout in Bihar state elections and the winter Parliament session promises to be a stormy one. Will the government bend to accommodate global trade or push back to ‘thwart this grand design’? Will the new IP policy ensure Sabka Vikas? We won’t have to wait to long to know the answer.

Viveka Roychowdhury


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