Indian pharma industry despite being one of the fast-growing sectors lacks requisite infrastructure and sponsorship, and these factors act as a hindrance for the innovators, said Ajay Bhargava, Partner, Khaitan & Co.

The industry would only succeed if there is sufficient support from the government for research and development with respect to infrastructure and if encouraging policies are formulated. This is where the country’s patent regime is seen to positively encourage innovation, he added.
 
To encourage R&D in India, the Union government’s draft National Pharmaceutical Policy, 2017 wherein the import of active pharmaceutical ingredient (API) for manufacturing drugs in India are proposed to be taxed at higher rates. The intent is to ensure Indian industry will be able to manufacture their drugs at home.
 
Patent persuades an inventor to disclose his innovation. It offers the reward for the labour, skill and monetary investment to bring it to the stage at which it could be commercially practicable. It encourages to invest capital in new lines of production which might not appear profitable if many competing producers embark on them simultaneously, Bhargava, told Pharmabiz in an email.

India became a signatory to Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement), in order to fulfill the commitment to World Trade Organisation (WTO), Indian Patents (Amendment) Act, 2005 was enacted to introduce product Patents in India and marked the beginning of a new patent regime aimed at protecting the Intellectual property rights of patent holders. As part of its WTO-TRIPS regime obligations under Articles 70, India created the ‘mail-box’ to withhold patent applications which had pharmaceutical products as a subject-matter.
 
After the amendments in the India Patent Act, the need to balance protection of patents and maintaining the competition between the pharmaceutical companies arose. Before the new product patent regime, it was easy to get patents for the process of making a drug but now the regime has made it difficult for the pharmaceutical industry to get patents on products as the criteria for patentable subject matter has become stringent, said Bhargava.
 
But the introduction of the concept of product patenting has changed the scenario. In a judgment of Novartis v. Union of India (2013) 6 SCC 1 on the issue of whether the former could patent Gleevec in the Supreme Court interpreted Section 3(d) of the Indian Patent Act, 1970.
 
 This is one of the landmark cases where it can be seen that the criteria for getting patents for a drug has become stringent. It can be said that the product along with the process has to be novel, non-obvious and inventive for a grant of patent, said Bhargava.