Entrepreneurial resilience, nothing else, assisted in part or occasionally, by well-meaning government officials and confusingly compounded Indian pharma policies, apparently drafted in National interest, keeps the Indian Pharma going, growing.

There is a general perception that Indian pharma industry has been growing at the expense of the multinational pharma companies. The fact is that a typical Indian Pharma Company (IPC) has more litigations with another Indian colleague than with an MNC.  Most IPCs are on the contrary longing to have tie-ups and alliances with MNCs.  In fact, this is in fashion today.  It also helps to boost the stock in the market and also the “business ego index”.  

It is often alleged that the pharma industry in India is a divided house. A closer look will, however, lead to contrarian view.  Except on patents – policy and practice – there is near unanimity on all issues, including on how to “grab” the “ethical” market share.  Working with MNCs and faulting them for all ills have been the practice for long.

Ever since the eighties, Indian Pharma gained expertise in good quality and management practices by such alliances and contract manufacturing (loan licence) relationships.  However, technology transfer instances and agreements has been rather dismal.   “Poor IP practices” in domestic arena has been blamed for lack of trust in liberal licensing of technologies.

However, it is an acknowledged fact, that Indian companies have largely been reliable, committed and dependable in contractual relationships and adherence to confidentiality, non-disclosure and non-compete agreements.  However, this available approach has not been adopted by MNCs especially since they wanted to continue to harp on poor IP and patent practices and blaming for falling short of TRIPs Plus expectations.  Blame it on ‘3d’ has been the excuse !  To add “insult to injury”, it is now “Blame it on CL”, the new excuse !

In fact a “SWOT” analysis will throw up surprising results.  Most of the weaknesses are strengths of the industry and vice versa.  So are the opportunities which are also perceived as threats.  “Fragmented” is how the Indian pharma is described in comparison with overseas pharma.  In fact, this large number of pharma industries in India is a strength.   Whenever a front-line Indian generic pharma company is acquired by an MNC, another smaller Indian company grows in to that space.

The diversity, plurality and multiplicity of Indian companies is the strength of Indian Pharma – the visibly invisible resilience.  Strengths in combination therapies (FDCs), new drug delivery systems (NDDS), Contract Manufacturing (CRAMS), herbal based dosage form development capabilities, equipment, excipient and packaging development capabilities of Indian companies have also assured their post-WTO resilient growth and survival.

Indian pharma companies do not spend enough on R&D, dailies and news channels report, day in and day out.  MNCs spend 10 to 20 per cent on R&D.  Average Indian company spends 1 to 2 per cent only on R&D, often nothing.  Is this a weakness or a strength. Laments galore abound on “drying new drug pipe lines”.  Who is crying about it?  

The innovator drug companies cry about loss of big time revenues leading to massive “cuts” and “lay offs”.  The “me too” generic companies cry that there will not be enough new drugs to copy post-2015.  While the consumers are the biggest beneficiaries of price reductions by generic pharma, including through compulsory licences and infringement risks, what has eluded the Indian generic pharma industry, is the appreciation for their steadfast resilience in addictively continuing their cut-throat competitive practices, in spite of all round criticism.

To laugh or cry, to praise or to bury, Indian pharma is a contradictions galore.  A relative of mine, who was in hospital suffering from dengue, whom I recently visited, was comparing Indian drug prices with overseas, where he was employed.

 Indian medicines are cheaper by one tenth, he said. Amoxi-clav (“Augmetin – innovator’s brand”) is around Rs.300 in India while it is equivalent of Rs.3,000 overseas, on an average.  Same day, the newspapers report the Indian Judiciary decrying high prices of drugs in India.

 Nobody likes to get sick and pay for medicines.  Purchase of medicines are always associated with negative sentiments and hence an avoidable evil, including having to visit a “doctor” or a hospital.  The statistics state that Indian medicines are one of the cheapest in the world, though the judiciary, the government and the people do not agree.  Contradictions galore ! to laugh or cry ?

Indian pharma manufacturers have for ages been at the dictatorial mercy (no one dares to speak out, though) of the AIOCD (All India Organisation of Chemists & Druggists) and the FMRAI (Federation of Medical Representatives’ Associations of India).  Even the Government of India ignored their unfair practices either for fear of their union strengths or for favours received.  Consequently, the distribution channels were larger beneficiaries of the pharma trade, with little or often meagre return on operations retained by the manufacturers.

 The larger Indian pharma companies, often leveraged their profits with contribution from overseas operations and exports.  The “Damocles Sword” of DPEA and other demands have always made it difficult for Indian pharma entrepreneurs, leaving little to spare for R&D projects.

Faith in WTO & TRIPs and other treaties and agreements originated from Uruguay Round was shot-lived for those who conceived them.  Intellectual Properties as a tool for dominating international trade is loosing its sharpness.  Newer forms of NTBs (Non-Tariff Barriers to Trade) and TBTs (Technical Barriers to Trade) are being devised and built up.  The EU threat in the garb of quality checks is one such measure.  The PIC (Pharmaceutical Inspection Council) membership which is being forced upon developing and least developed countries is another.  Need for Affordable access to life saving medicines will eventually force the tide.  Till such time, the Indian pharma industry need to work closely with the policy-makers to fight the NTBs & TBTs to continue to play the legitimate role as generic capital of global pharma industry.

More and more developing and least developed countries are being roped into these new treaties like ACTA (Anti-Counterfeiting Trade Agreement) and practices like PIC (Pharmaceutical Inspection Council)  to deprive India’s growth in generics.

Another burning issue for research by Indian companies or research institutions is the lopsided interpretations of Biodiversity and Traditional Knowledge. Global Biodiversity meet under Nagoya Protocol has just concluded in Hyderabad.  However, the concepts are clouded and the results are minimal.

The sustainable development of natural resources and benefit sharing objectives have taken a dismally back seat.  The definitions such as exemption for “value addition” is totally frivolous and unfair.  The interpretations of the Biodiversity Act and Rules are arbitrary and unjustifiable.  The Contract Agreements available on the website varies from party to party, including on the terms of royalties.

Sustainably developed resources such as 100 per cent self-cultivated herbs are also denied exemption.   Value addition is defined as (interpreted) “Value added product implies products containing portions/extracts of plants and animals in unrecognisable and physically inseparable form.

For example: Chyawanprash, Isabghol, Pudin Hara, Turmeric creams etc”.  There is no pharma industry representation in the committees.

In the absence of emphasis on sustainable development and utilization in a sustainable manner, the generation of income for benefit sharing is minimal.  Even though the Biodiversity Act is in force for nearly 10 years, the “benefit sharing” platform is yet to be built or designed.  

Who is suffering in the meantime?  The Indian herbal research community is deprived of the potentially rich access to newer “scaffolds” as building blocks for newer drugs.  In the interest of Indian herbal research, a relook at the procedures and interpretations of Indian Biodiversity Act & Rules will be very much welcome.  Accredition to Nagoya Protocol may be a good development, if only there will be harmonization of Act & Rules, interpretations, practices and procedures.

India claims to possess abundance of natural resources, biodiversity and traditional knowledge – Is denying access or opportunity for sustainable use, the right route to protect or provide benefit sharing?  A practicable model should be evolved to encourage research and extend the benefits to the mankind.

Continuing the crusade by NGOs and support by government and judiciary to keep the drug prices at the lowest level may be good for the patients and public in the short term.  Will continued artificially controlled low profits and lack of investible surplus for R&D help in the long run?  Is the strategy of low earnings going to help keep the MNCs disinterested in Indian market?  

The MNC goliaths have apparently deep pockets to continue to play the “low price” game.  The Indian pharma industry built and run so long by pure addictive resilience of the Indian pharma entrepreneur deserves better deals and returns.  Indian generic pharma deserves to move on to invest in serious drug discovery research, which if nurtured, will yield long term returns for the countries’ international trade and pharma thrust to technological leadership.  Are we throwing away the “baby with the bath water?  Are we setting our own house on fire to kill the rat?  Only time will tell, I hope it is not too late, by then.

(The author is CEO & Principal Patent Attorney, Gopakumar Nair Associates)