Investment Frustrations of Global Pharma/Biotech Giants & The challenge of Protecting Intellectual Property in India

3rd December 2009
Bangalore—Its been a journey without a destination so far for the global pharma/Biotech majors who invested billions in R & D in India. Whether its Roche or Novartis, all are becoming victims of

  • Counterfeiting
  • No guaranteed protection for Intellectual Property
  • Bottlenecks in Regulatory approval

While the current visit by Our prime Minister to USA has one of the objectives as encouraging Global Biotech Companies to invest in Indian R & D sector, There has been several cases in the past where well reputed companies have not been able to protect their interests in India.

To quote Novartis is in its fourth year of litigation with the Indian authorities over its novel treatment, Glivec. The drug, which has become the treatment of choice for chronic myelogenous leukemia and other cancers, notably gastrointestinal stromal tumors, brings in annual revenues of near $4 billion in worldwide sales.

But the Indian Authorities ruled the drug was only an improvement on an existing product rather than a patentable innovation. Since then Novartis has challenged ruling after ruling and today the issue is before the Indian Supreme Court, but resolution continues to be maddeningly slow. (That is a peculiarity of Indian System)

The newly formed Intellectual Property Appellate Board (IPAB) ruled earlier this year that no patent would be granted to Glivec as there was no evidence that a significant increase in therapeutic efficacy had been achieved. However, at the same time, the IPAB decided that new evidence of the drug’s efficacy could not be heard.

Roger Bate is the Legatum Fellow in Global Prosperity at the American Enterprise Institute.recently commented in his article

“Investors in India also risk having their products faked by cheerfully unscrupulous “businessmen” such as Pavel Garg of Haryana Province. This gregarious Person has been filmed discussing bribing of ministers, and delights in explaining how he adulterates medicines to fool basic quality tests. Fakers like Garg ignore that the medicines they produce can harm individuals and may even build drug resistance for diseases such as tuberculosis and malaria.”

Another case of Counterfeiting has been observed in case of Swiss Drug Giant Roche. Its lung cancer drug, Tarceva, was granted a patent, but when a large local generic manufacturer broke the patent, Roche received no protection.

While this is one of the many examples where in Global Biotech/Pharma majors are preferring China as their R & D destination. There could be possible after effects to the Indian talent Pool.

What does it means to Indian Research/Student Community?

Lesser investments from these noted Pharma/Biotech majors in India certainly means that there will be lesser Jobs generation, Under-utilization of Indian Researcher’s Ability and above all the unrest and unsatisfaction among this community. Is it not the duty of Our Government to ensure the interest of these companies and make sure that a sense of security prevails among the researcher. Is the Government Listening?

Why India Could be a preferred R & D Destination when compared to China?

  • Science can not be harboured in a Country where there is a restriction on people’s rational thinking eg China. However India has this basic Requirement of Freedom of Speech
  •  India is a democracy having an independent judiciary. This is a land where every step can be questioned (no matter even if its govt decision)
  • Change is being driven by the increasingly excellent Indian companies (Ranbaxy, Piramal, and Reddy in particular), which will be the ones ensuring improved intellectual-property protection
  • There is the nagging worry, of course, that China’s Marxist leaders could arbitrarily undermine intellectual property, or, perhaps most likely, not provide the right intellectual and personal freedoms required for first-rate science

If Indian scientists/Researcher community is allowed the freedoms and protections they demand, India will become the place for future investment and future biotechnological breakthroughs.

Further Reading: Intellectual Property Protection And Investing In India