Lifesaving drugs, patented after ’95, will not come cheap
While India’s IT industry hogged media limelight for its breathtaking pace of growth over the last decade, the pharmaceutical industry too kept up the momentum, marching at a decent pace of around 13-14 per cent annually in a market that is estimated to be around $11 billion. The catalyst that got the juices flowing for the pharma industry was the Patent Amendment Bill (2005), which in line with the WTO agreement, got the ball rolling for both MNCs and indigenous companies in the sector. The Bill gave MNCs a strong regulatory framework that acted as a bulwark against cheap copy of their discovered drugs while local companies benefited by getting opportunities to tap the off-patented medicines. Indian pharma companies got another shot in the arm with the new Patent Act stating that only drugs invented after January 1, 1995, can be considered for product patenting.
Eight years hence, India is one of the five biggest pharmaceutical producers in the world, contributing to 10 per cent of the world’s drug production, amounting to $22 billion, up from $7 billion in 2005. And if growth comes can employment generation be far behind? A Department of Pharmaceuticals report indicates an employment figure of 340,000, which is split among 20,000 pharma companies across the country. Armed with such growth opportunities, India could become the potential pharma-superpower over the next two decades – a credit that goes singularly to the Patent Bill, 2005.
However, the Bill has had its fair share of controversies too. The main apprehension has been that it would allow the patenting multinationals to charge high prices for their drugs! The low elasticity of demand for pharmaceutical products, coupled with the aggressive marketing by big pharma companies, entails the risk of encumbering the low and middle income groups with financial stress. However, the recent Supreme Court ruling denying patent rights to Novartis’ anti-leukemia medicine, Glivec, has given reasons to belie such concerns. For instance, Glivec costs an unaffordable Rs. 1.2 lakh per month. But its generic formulation, made by domestic manufacturers, costs no more than just Rs. 8,000. The SC ruling came on the basis of the drug being developed before 1995, which made it ineligible for protection under the new Patent Act.
But the jubilation at the SC verdict is ephemeral. With the passage of time, chances of a drug being formulated before 1995 will gradually grow rarer. And that’s where the danger lurks. Abnormally high priced lifesaving drugs, formulated after ’95, will no longer be affordable.
While India’s IT industry hogged media limelight for its breathtaking pace of growth over the last decade, the pharmaceutical industry too kept up the momentum, marching at a decent pace of around 13-14 per cent annually in a market that is estimated to be around $11 billion. The catalyst that got the juices flowing for the pharma industry was the Patent Amendment Bill (2005), which in line with the WTO agreement, got the ball rolling for both MNCs and indigenous companies in the sector. The Bill gave MNCs a strong regulatory framework that acted as a bulwark against cheap copy of their discovered drugs while local companies benefited by getting opportunities to tap the off-patented medicines. Indian pharma companies got another shot in the arm with the new Patent Act stating that only drugs invented after January 1, 1995, can be considered for product patenting.
Eight years hence, India is one of the five biggest pharmaceutical producers in the world, contributing to 10 per cent of the world’s drug production, amounting to $22 billion, up from $7 billion in 2005. And if growth comes can employment generation be far behind? A Department of Pharmaceuticals report indicates an employment figure of 340,000, which is split among 20,000 pharma companies across the country. Armed with such growth opportunities, India could become the potential pharma-superpower over the next two decades – a credit that goes singularly to the Patent Bill, 2005.
However, the Bill has had its fair share of controversies too. The main apprehension has been that it would allow the patenting multinationals to charge high prices for their drugs! The low elasticity of demand for pharmaceutical products, coupled with the aggressive marketing by big pharma companies, entails the risk of encumbering the low and middle income groups with financial stress. However, the recent Supreme Court ruling denying patent rights to Novartis’ anti-leukemia medicine, Glivec, has given reasons to belie such concerns. For instance, Glivec costs an unaffordable Rs. 1.2 lakh per month. But its generic formulation, made by domestic manufacturers, costs no more than just Rs. 8,000. The SC ruling came on the basis of the drug being developed before 1995, which made it ineligible for protection under the new Patent Act.
But the jubilation at the SC verdict is ephemeral. With the passage of time, chances of a drug being formulated before 1995 will gradually grow rarer. And that’s where the danger lurks. Abnormally high priced lifesaving drugs, formulated after ’95, will no longer be affordable.
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