Organisation of Pharmaceutical Producers of India (OPPI) is the premier association of research based pharmaceutical manufacturers, representing companies with international collaboration as well as large Indian companies. The association has been an active participant in the discussions and consultations that led to the changes in the Patent Rules of the country. Ranjit Shahani, President of OPPI, speaks to Pharmabiz in an e-interview on the changes that are taking place on the patent front and its implications on Indian pharmaceutical industry. Shahani is the vice-chairman and managing director of Novartis India Limited. Excerpts:
Are the changes proposed in the Patent Amendment Ordinance matching OPPI's expectations?
I welcome the new Patent Act Ordinance, introducing the long awaited product patents. The Ordinance includes several provisions aimed at rationalising timelines, allowing flexibility and reducing processing time for patent applications. The new Act will boost R&D and will help to bring in foreign direct investment in the industry and contribute to improved healthcare.
However, I feel there are three areas where India will continue to lag behind in ushering in World Class IPR standards. The first is that India should join other leading countries and progressive nations in moving away from pre-grant opposition. The Ordinance as announced will provide representation by third parties and lengthen time for grant of Patent.
The second area of concern for the Industry are the existing Compulsory Licensing (CL) provisions that go much beyond national emergency and extreme urgent situations, public health crises and anti-trust situations. Broadening the scope of CL can lead to unfair commercial gains to favoured companies.
The third area of concern for the research based manufacturers is that a new proviso has been added in the Ordinance that treats patent holders in respect of mailbox applications on a discriminatory footing in so far as them being denied the rights and privileges from the date of publication retrospectively.
I hope that this Ordinance is, indeed, converted into a full-fledged law by Parliament. Decisions on fresh investment, focus on R&D, clinical trials and productive collaboration between Indian and international companies will all take place only if there is an assured climate of worldclass patent protection. When India is on the threshold of growth on all fronts, government should help to open up the healthcare sector as well.
What are the opportunities it promises the multinational pharmaceutical firms?
The major opportunity for the MNC pharma is improving their growth by launching patented new products. However, just having the Patent Law on paper will not be enough inducement to launch patented products. Once the TRIPS compliant law is in place the MNC's will monitor its implementation and if they find that it is being done in a transparent and fair manner only then they will launch their products.
MNC's are also requesting the government to provide data protection to the safety and efficacy data developed by them through costly and time consuming clinical trials. All over the world in countries such as USA, Europe, China, Korea, Singapore etc, data protection is in force. We have recommended to the government that at least 5-year of data protection is granted from the time of marketing approval. It is necessary for the government to provide an environment of IPR protection that fosters innovation and stimulates launch of patented molecules, which will result in better healthcare for all. Another opportunity for MNC's is to enter into alliances with domestic companies for generic drugs sourcing for use by their overseas formulations plants. Again the local manufacturing units of MNC's can be utilised to manufacture bulk drugs and formulations for global supply to other affiliates.
The global pharmaceutical industry is under tremendous pressure to reduce costs. While the drug discovery cost has ballooned to a reportedly US $ 1 bn per new chemical entity (NCE) the R&D productivity is continuously declining. The global industry, therefore, is looking for cost containment through outsourcing and India offers tremendous opportunity in the area of contract R&D, manufacturing, clinical trials, bio-informatics, custom synthesis, technical services etc.
Is the Patent Amendment posing serious threats to the Indian pharmaceutical firms? Is it going to result in a huge increase in essential drug prices?
Rather than threat I would say the Patent Amendment opens up vast opportunities for the Indian pharmaceutical firms. Large companies like Ranbaxy, Nicholas Piramal, Dr Reddy's, Wockhardt, Lupin etc, are investing heavily in R&D and in a few years should be able to launch their own patented molecules all over the world.
We also have the largest number of US FDA approved manufacturing facilities outside USA. Therefore, India is poised to emerge as a significant player in the area of generics.
There is an apprehension that medicine prices are going to go through the roof in the product patent regime. This is a myth propagated by some sections of the industry. Over 97% of the drugs in the World Health Organisation (WHO) list of essential drugs are already out of patent, and will continue to be available at current prices. And there are several therapeutic equivalents available for the rest. There are, for example, over a dozen categories of anti-hypertensives. Also, the National Pharmaceutical Pricing Authority (NPPA) will keep on monitoring medicine prices. As such, medicines contribute to only about 15% of healthcare expenditure. The bulk of the expenditure (85%) comes from diagnostic tests, hospitalization, doctor's consultation fees etc. Therefore, this obsession with medicine prices in India is not warranted.
What according to you would be the future shape of Indian pharma industry?
India will emerge as a leading country in the world pharmaceutical market. Presently we rank 4th in volume terms and 13th in value terms. We shall improve on both ranks in the coming 10 years. Many Indian companies like Ranbaxy, Dr Reddy's, Wockhardt etc, have begun international operations which will make a significant contribution to their turnover. Exports will be the major thrust of the industry, in the Post Product Patent Era.
Also, the manufacturing costs for formulations would be half of what it is in the developed world due to lower costs of inputs. MNC's may make their Indian manufacturing facilities "centers of excellence" for supplying to other countries.
Partnering for developing NCE's by outsourcing to India offers tremendous cost advantage without sacrificing on quality. The biopharmaceuticals market is also evolving very fast and the Indian market is flooded with biogenerics like erthropoetein, filgrastim, tPA, Interferons, human insulins, vaccines, etc. In fact India is likely to emerge as one of the largest producers of vaccines in the world in few years time.