A brief history of the Indian Patent System from Indian Pharmaceutical Industry perspective, the concerns and opportunities.

Although a comprehensive Act on Patents and Designs allowing product patents of drugs came into force in India in 1911, the first Patents Act of India was enacted in 1856.This Act gave a head start to the global pharmaceutical companies in this business primarily through imports into India. As a result, in no time the global pharmaceutical companies curved out a sizeable chunk of the Indian pharmaceutical market capturing over 80% of the total domestic consumption of drugs and pharmaceuticals.It has been reported that in 1959 an American Senate Committee headed by Senator Kefauver wrote in its report:

“…in drugs, generally, India ranks amongst the highest priced nations of the world”.

In 1970 the Indian Patents Act was amended abolishing the product patent system, based on ‘Ayyangar Committee report, 1959’, which examined the factors influencing the high prices of the drugs and pharmaceuticals in India and concluded:

“.. high prices resulted from the monopoly control foreign based pharmaceutical companies exercised over the production of drugs.”

The Indian Patent Act of 1970 was, once again, amended under the TRIPS agreement and the Indian Patents Act, 2005 came into force effective January 1, 2005 , re-introducing product patents for the drugs and pharmaceuticals, as a part of the globalization process of the country including the pharmaceutical industry of India.

This is perhaps the testimony of India’s realization that research and development is the bed rock for the progress of pharmaceutical industry in any country in the long run, as this industry, unlike many other industries, relies quite heavily on product patents.

Indian Pharmaceutical Industry to build on its acquired strength:

Reverse engineering with high calibre skills in process chemistry emerged as one of the key strengths of the domestic Indian pharmaceutical industry since 1970. The industry has to build on this strength and move towards ‘incremental innovation model’ of R&D, which is less expensive and more cost effective starting with a known substance, to meet the unmet needs of the patients.

The product patent regime has given a boost to pharmaceutical R&D in India:

Many medium to large Indian pharmaceutical companies, like Ranbaxy, Dr Reddy’s Lab (DRL) and Glenmark etc. have already started shifting their focus on R&D. The large number of patent applications filed by these companies to the Indian patent offices will vindicate this point. As a result of the new focus, one observes business initiatives like, spinning off the R&D units into a separate company and many R&D driven mergers and acquisitions by these domestic Indian companies.

R&D investments are also being made in traditional chemistry based screening. Moreover, companies like Biocon, Panacea Biotech, and Bharat Biotech etc. have engaged themselves in the space of biotechnology research.

Increasing opportunity to collaborate with the global companies:

Increasingly more and more Indian companies have started collaborating with the global companies in collaborative research and cost efficient process development to leverage their human capital and infrastructural facilities. The collaborative arrangement towards this direction between GSK and Ranbaxy provides a good example.

Contract research and manufacturing:

Some other domestic companies like Divi’s Lab, Suven Pharma, Dishman Pharma, Piramal Healthcare, Shasun Chemicals, Jubilant Organosys etc. are moving into the space of contract research and manufacturing services (CRAMS) establishing world class facilities and collaborating with the global players like, GSK, Pfizer, Merck, Eli Lilly, Bayer, Sanofi Aventis, Novartis etc.

Public-Private Partnership (PPP) in R&D:

Initiatives by the Indian companies in collaborative research with government research institutes like CSIR and NIPER have already commenced, though much lesser in number. Some companies like, Shasun have already derived benefits in the field of biotechnology out of such collaborative research under PPP. It is expected that more such projects will see the light of the day in not too distant future.

Some concerns in the new regime:

Some serious concerns are being raised as the country is in the process of settling down in the new paradigm. The key concern is about the affordability of patented products by those who are currently having access to other modern medicines.

To address such concerns related to public health issues in general, there are already provisions in the TRIPS agreement for price control of patented products.

At the same time, one finds, the government has exempted those patented products from price control, which are domestically produced with indigenous R&D. Many feel that these differential measures will not help improving affordability and access to such patented medicines by the common man.

Keeping prices of essential medicines under the lens of price regulator is more important:

Even over last sixty years of independence, the access to modern medicines in India is meager 35 percent. 65 percent of the nation’s population does not have any access even to off patent essential drugs. In a country like India where there is no adequate social security cover towards healthcare, it will be important to keep the prices of essential medicines for treating common diseases under the close vigil of the drug price regulator.

Will the prices of medicines spiral in the product patent regime of India?

While addressing this question one will need to keep in mind that around 98 percent of drugs, which are generic or branded generic, manufactured in India and costs cheaper than their equivalents available even in our neighbouring countries like Pakistan, Bangladesh and Sri Lanka, will continue to remain unaffected. Hence, it is very unlikely that prices of such medicines will go up significantly because of the new product patent regime in India.

Conclusion:

The key concerns raised in the new product patent regime are that it will further deteriorate the current poor access to modern medicines to a vast majority of the population.

It is undeniable that one of the key reasons for poor access to essential medicines in India is lack of buying power of a large number of both rural and urban poor. This problem gets compounded by the poor public health infrastructure, delivery system and financing system, despite sporadic initiatives taken by the government towards this direction.

To be successful in the new regime by improving access to modern medicines to those who do not have means to satisfy such basic needs, the country should take a rational and holistic approach in this matter. It is high time for all the stakeholders to ponder and flesh-out the real factors, which have been responsible for such a dismal rate of access to modern medicines to a huge 65 percent of the country’s population over decades, even when the product patent law was not in place in the country.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion

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