State funded ‘Universal Healthcare’ in India: A laudable initiative of the Government

Posted on August 29, 2011 by Tapan Ray

January 11, 2011 edition of ‘The Lancet’, in the article authored by Prof. K. Srinath Reddy et al titled, “Towards achievement of universal health care in India by 2020: a call to action”, proposed creation of an Integrated National Health System in India through provision of universal health insurance, establishment of autonomous organizations to enable accountable and evidence-based good-quality health-care practices and at the same time reduce the high out-of-pocket expenditure on health care through a well regulated integration of the private sector within the national health-care system of India, by 2020.

About six months later, in its August 16, 2011 issue ‘The Times of India’ reported that the Planning Commission of India is currently framing up the blue print for a universal health insurance scheme which would provide a minimum cover to everyone in the country. It is expected that a surcharge will be levied for this Universal Health Care (UHC) initiative.

Though UHC is indeed a very commendably initiative for India as a nation, some dubious and self-styled ‘healthcare crusaders’ have already started raising the bogey of ‘the inadequacy’ of the scheme as a diversionary measure to misguide the easily vulnerable common man of the country.

Efforts being made to sensationalize the current status of the Indian healthcare system:

Even in the backdrop of UHC initiative, the following sensational headlines could be fallacious at times, which more often than not are being misused by the vested interests:

“About 1.8 million children under age of 5 die in India every year; 68,000 mothers die due to maternal causes, and 52 million children in the country are stunted”.
“With 70% people living in more than 600,000 villages across rural India, not more than an estimated 30% have access to modern medicine”.

It is unfortunate that many key stakeholders, interested in improved healthcare system, are continuously engaged in an eternal blame game of ‘it is not my monkey’. At the same time, taking advantage of this confused situation, some other groups plan to facilitate their vested interests by projecting a ‘weaker India’ with contentious planted reports both overtly and covertly.

In this prevailing scenario, which has been continuing since the last several decades, there is no dearth of people who would attempt to hijack the health interest of the nation to harvest mega commercial benefits.

While all concerned should keep a vigil on such sinister design, let me now try to place some hard facts before you on the current healthcare scenario in India in the context of UHC.

The facts on access to ‘round the year’ healthcare facilities in India:

As reported by the Government of India in 2004, access to healthcare infrastructure and services for the rural villages in terms of percentages were as follows (Source: India Health Report 2010) :

Primary Health Centers: 68.3
Sub-Centers: 43.2
Government Dispensaries: 67.9
Government hospitals in urban areas: 79
Private Clinics: 62.7
Private Hospitals: 76.7

I reckon, after implementation of National Rural Health Mission (NRHM) and National Urban Health Mission (NRUM), this situation prevailing in 2004 has improved. However, the scope for further improvement in all these areas still remains very high. UHC could be a key facilitator.

In any case, the shrill voice highlighting around 65% of population of India does not have access to healthcare or medicines seem to be highly misplaced.

‘Access to Modern Medicines’ is improving in India, slowly but surely:

Contrary to the above propaganda, in the real life situation the access to modern medicines by the common man in the country even in the rural India is steadily increasing.

This is evidenced by the facts, CAGR (volume) of the pharmaceutical industry since the last ten years has been around 13%, leaving aside another robust growth factor being contributed through the introduction of newer brands, every year. Encouraging growth of the Indian Pharmaceutical Market (IPM), since the last decade, both from the urban and the rural areas, certainly signals towards significant increase in the domestic consumption of medicines in India.

IPM maintained a scorching pace of 16.5% growth in 2010. A recent forecast of IMS highlights near similar growth trend in 2011, as well.

In addition, extension of focus of the Indian pharmaceutical Industry, in general, to the fast growing rural markets, which are currently growing at a much faster pace than ever before, clearly supports the argument of increasing ‘Access to Modern Medicines’ even in rural India. The improvement in access may not exactly be commensurate to the volume growth of the industry during this period, but a major part of the industry growth could certainly be attributed towards increase in access to modern medicines in India.

For arguments sake, out of this rapid growth of the IPM, year after year consistently, if I attribute just 5% growth per year, for even the last nine years over the base year of 1998 (as reported in 2004 by WHO) to improved access to medicines, it will indicate, at least, 57% of the population of India currently has access to modern medicines and NOT just 35%, as I wrote in my blog earlier, quoting the numbers from the above WHO report of 2004.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend. Official communications of the government still quote the outdated statistics, which states that 65% of the population of India does not have ‘Access to Modern Medicines’ even today. No wonder, why many of us still prefer to live on to our past.

Be that as it may, around 43% of the population will perhaps still not have ‘Access to Modern Medicines’ in India. This issue needs immediate attention of the policy makers and can be resolved with a holistic approach. UHC initiative together with improvement of healthcare infrastructure and delivery systems are the needs of the hour.

So called ‘Diseases of the Poor’ are no longer the ‘Leading Causes of Death’ in India:

As stated above, the disproportionate diversionary focus on the diseases of the poor by the vested interests, being the leading causes of death in India, should be re-validated with the data available with the office of the Registrar General of India (2009). This report highlights a totally different scenario, where the top five leading causes of death in terms of percentage, have been reported as follows:

Cardiovascular diseases: 24.8
Chronic Obstructive Pulmonary Disease (COPD): 10.2
Tuberculosis: 10.1
Cancer: 9.4
Ill-defined conditions: 5.3

Thus the diseases of the developed world, like cardiovascular diseases, COPD and Cancer cause over 45% of the total deaths in India, whereas Tuberculosis, Malaria, Diarrhea and digestive diseases cause around 23% deaths in the country. I reckon, UHC will take care of this emerging disease pattern in India.

The key reasons for not seeking medical treatment are not always poor ‘Access to Healthcare’:

While promoting the UHC, the government should take note of the key reasons for not seeking medical treatment, across socioeconomic milieu in the country. These reasons are not predominantly due to ‘Poor Access to Healthcare ‘. The following data will vindicate this point:

Reason	Rural Poorest 20%	Rural Richest 20%	Urban Poorest 20%	Urban Richest 20%
*Financial Reasons*	39.7	21.2	37.2	2.3
*Ailments not considered serious*	27.2	45.6	44.3	84.4
No Medical facilities	12.8	10.0	1.6	_
Others	20.3	23.2	16.9	13.3
Total	100	100	100	100

(Source: India Health Report 2010)

All these are happening probably because we do not have, as yet, any ‘well-structured healthcare financing system’ for all section of the society. The UHC initiative could well be a very significant part to the solution of this long standing problem together with other specific important measures, some of which I have already deliberated above.

While addressing the healthcare financing issue of India, January 11, 2011 edition of ‘The Lancet’ in its article titled, “Financing health care for all: challenges and opportunities” commented:

“India’s health financing system is a cause of and an exacerbating factor in the challenges of health inequity, inadequate availability and reach, unequal access, and poor-quality and costly health-care services. The Government of India has made a commitment to increase public spending on health from less than 1% to 3% of the gross domestic product during the next few years…. Enhanced public spending can be used to introduce universal medical insurance that can help to substantially reduce the burden of private out-of-pocket expenditures on health.”

I reiterate in this context, UHC initiative brings a breadth of fresh air to the prevailing rather gloomy healthcare financing scenario in India.

A comparison of private (out of pocket) health expenditure:

Look at it from, any angle, the general population of India is most burdened with high’ out of pocket healthcare expenses’ compared to even all of our neighboring countries:

1. Pakistan: 82.5% 2. India: 78% 3. China: 61% 4. Sri Lanka: 53% 5. Thailand: 31% 6. Bhutan: 29% 7. Maldives: 14%

(Source: The Lancet)

This factor itself, in case of just one or couple of serious illnesses, could make a middle class household of India poor and a poor could be pushed even Below the Poverty Line (BPL). UHC initiative of the Government is expected to change this scenario significantly in the years ahead.

The key unresolved issue of ‘affordability’ will get partially unresolved with UHC:

The above edition of ‘The Lancet’ highlighted that outpatient (non-hospitalization) expenses in India is around 74% of the total health expenses and the drugs account for 72% of this total outpatient expenditure. The study has also pointed out that 47% and 31% hospitalization in rural and urban areas respectively, are financed by loans and sell off assets.

This critical issue of ‘affordability’ of modern medicines is expected to get, at least partially resolved with the UHC scheme of the Government.

Around 32% of Indian BPL population can’t afford to spend on medicines:

While framing the UHC scheme, the government should keep in mind that a population of around 32% in India, still lives below the poverty line (BPL) and will not be able to afford any expenditure, however minor it may be, towards medicines. Proper implementation of the RSBY scheme with military precision, will be the right approach to this marginalized section of the society.

National Health Entitlement Card:

According to the Planning Commission, to enable the citizens availing the facilities provided by the ‘Universal Healthcare,’ the government will issue a ‘National Health Entitlement Card’, which will guarantee free access to relevant healthcare packages designed for the primary, secondary and tertiary healthcare for all. This scheme will be fully funded by the Central Government and cover both inpatient and outpatient services.

Conclusion:

Thus in the current scenario, the initiative of ‘Universal healthcare’ to provide access to healthcare to all citizens of India by addressing the critical issue of high incidence of ‘out of pocket’ expenses towards health care, is indeed a laudable initiative and ushers in a breadth of fresh air, despite all motivated comments against it.

We need also to keep in mind, although the ‘Universal healthcare’ is a fascinating mega initiative by the Planning Commission of India, this may not resolve all health related maladies of the country in one stroke.

Even in the changed scenario, a large section of the population both rich and poor and from both urban as well as rural India, may continue to not seek medical treatment assuming initially many of their ailments are not serious enough. Such a situation will definitely not materially improve the healthcare scenario of India, quite adversely affecting the economic progress of the country.

Such a situation, if continues, will necessitate continuous disease awareness campaigns with active participation of all stakeholders, including the civil society across the country, sooner than later, in tandem with all other measures as may deem necessary from time to time.

Disclaimer:The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Pharmaceutical R&D in India: Issues and Challenges

Posted on August 15, 2011 by Tapan Ray

Research and Development (R&D) initiatives, though very important for most of the industries, is the life blood for the pharmaceutical sector, across the globe, to meet the unmet needs of the patients. Thus, very rightly, the Pharmaceutical Industry is considered as the ‘lifeline’ for any nation, in the battle against diseases of all types.

Drugs and Pharmaceuticals not only cure diseases and improve the quality of life of patients, but also help reducing the ‘burden of disease’ significantly. A study on five illnesses like AIDS, Cardiovascular, Cancer, Alzheimer’s and Rheumatoid-arthritis showed that drug research will save more than US$ 750 Billion in the treatment costs alone _[1].

Similarly, treatment with drugs for schizophrenia can save more than US$ 70,000 per patient per year, due to avoidable hospitalization _[2]. All these highlight the critical role that R&D could play in the healthcare system of any country.

R&D is not a threat to cheaper generic medicines:

More number of incoming patented medicines from the R&D labs will ensure faster growth of the generic pharmaceutical industry too, after the former will go off-patent. Even in the USA, which offers the highest number of innovative medicines across the globe, has a vibrant high growth generic pharmaceutical industry in place. The market penetration of cheaper generic drugs in the US is amongst the highest in the world and stands at more than half of all prescription medicines.

R&D process:

Over the years, pharmaceutical R&D process, though has evolved into a highly sophisticated and complex science, it still calls for enormous resources in terms of money, materials and skilled manpower, besides years of precious time.

Over a period of so many years, the small-molecule blockbuster drugs business model made pharmaceuticals a high-margin industry. However, it now appears that the low hanging fruits to make blockbuster drugs have mostly been plucked.

These low hanging fruits involved therapy areas like, anti-ulcerants, anti-lipids, anti-diabetics, cardiovascular, anti-psychotic etc. and their many variants, which were relatively easy R&D targets to manage chronic ailments. Hereafter, the chances of successfully developing drugs for cure of these chronic ailments, with value addition, would indeed be a very tough call. Even in this environment, India’s investment in R&D still remains very modest by the international standard.

Global R&D investment and Asia-Pacific Region:

It has been reported that in the global pharmaceutical industry_[3] 85 % of the medicines are produced by North America, Europe, Japan and Latin America and the developed nations hold 97% of the total patents worldwide.

Unlike the common perception, that China is attracting a significant part of the global investments towards R&D, latest data of MedTRACK revealed that only 15% of all drugs development is taking place in Asia-Pacific, despite the largest growth potential of the region in the world.

The key growth driver of any economy:

Innovation being one of the key growth drivers for the knowledge economy, creation of innovation friendly ecosystem in the country calls for a radical change in the mind set – from ‘process innovation’ to ‘product innovation’, from ‘replicating a molecule’ to ‘creating a molecule’. A robust ecosystem for innovation is the wheel of progress of any nation.

It is encouraging to hear that the Government of India is working towards this direction in a more elaborate manner in its 12^th Five Year Plan.

Indigenous capability for production of the country must give way to indigenous capability for innovation and discovery. Laws and policies need to facilitate, reward, recognise, protect and encourage all those who are or could be a part of this critical process.

Striking a right balance between the cost of research and affordability of medicines:

While the common man expects newer and better medicines at affordable prices, the Pharmaceutical Industry has to battle with burgeoning R&D costs, high risks and increasingly long period of time to take a drug from the ‘mind to market’, mainly due to stringent regulatory requirements. It will indeed be a very proud moment for India, when a drug, especially, for treating Non-infectious Chronic Diseases (NCD) comes out of its home-grown R&D centers.

R&D is an arduous process:

The dynamics of Drug Discovery are shown below:

Despite patent life being 20 years, effective period of exclusivity for the discoverer is only 7.5 – 8.5 years.

Stages of Development	No. of Years
Pre-clinical	3.5
Clinical	6.5
Regulatory	2.5 – 1.5
Total:	12.5 – 11.5

Another report, as depicted in the chart below indicates the investment pattern in R&D by various countries in the developed markets of the world:

Where does the money go? (%)

US	36
Japan	19
Germany	10
France	9
UK	7
Switzerland	5
Sweden	3
Italy	3
Other	8

Where does the R&D investment go? (%)

Synthesis & Extraction	12
Screening & Testing	15
Toxicology & Safety	5
Dosage & Stability	9
Clinical Phase 1-3	26
Phase IV	6
Process Dev. & QA	10
IND & NDA	4
Bioavailability	2
Other	11

Looking at the long lead time before a new drug starts paying back and even if net profitability of 50% on sales are permitted, recovery of the entire R&D cost only from the Indian market would be virtually impossible. Hence, if Indian R&D is to pay back, we need to have access to overseas markets.

Harmonization of regulatory standards is a must for containment of R&D costs. Researchers in the country are currently following the ‘DRL’ or ‘Glenmark’ model of selling /out licensing the discovery for offshore development.

Strengths and weaknesses of India in Pharmaceutical R&D:

Following are the current strengths and weaknesses of the Pharmaceutical Industry of India from the R&D perspective:

Strengths:

Mature Industry with strong manufacturing base
Strengths in (innovative) process chemistry
Abundance of raw talent
Entrepreneurial spirit
Highly talented and skilled Indian scientists working abroad (great potential for networking)
Low cost of Manpower
Cost effective Manufacturing Facilities
Rich Biodiversity
Global Clinical Trials are now being contacted in India

Weaknesses:

Lack of funding and resources
Lack of a ready ‘talent pool’
Low profile of high quality work being carried out
Inadequate regulatory framework / infrastructure
Low investment in R & D
Missing Link between Research and Commercilisation

R&D Expenditure in India:

The following chart gives details of R&D spend of the major players of the Indian Pharmaceutical industry in 2009:

	FY 2009 (USD=INR46)
Company	Sales USD Mn.	R&D USD Mn.	As % of Sales
Ranbaxy Laboratories	1610	90.3	5.6
Dr. Reddy’s Laboratories	1572	83.6	5.3
Cipla	1152	51.2	4.4
Sun Pharmaceuticals	951	67.4	7.1
Lupin	847	48.4	5.7
Wockhardt	770	11.2	1.4
Piramal Healthcare	720	18.5	2.6
Cadila Healthcare	644	34.4	5.3
Aurobindo Pharma	557	24.5	4.4
Matrix Laboratories	500	46.6	9.3
Total	9324	476	5.1

(Source: Prowess: Business World, February 8, 2010)

Research Options for India:

Following are various research options available to India:

Basic Discovery Research:

Basic Discovery Research is capital intensive, costly and takes a long time for the return on investments. This could be made possible only if significant (NIH-type) funding is available.

Genetic & Proteomic Research:

Genetic and Proteomic Research involves many of these following procedures:

- Decoding Human Genetic Code

- Identification of Genetic Markers

- Personalized cards or chips that will contain each person’s genetic structure

- Genetic Manipulation to alter a person’s susceptibility to a particular disease

- Elimination of therapies that will not work on certain genotypes

This is probably the most exciting field of Research today, where the Industry will be able to “leap-frog” given the right priority. The International Center of Genetic Engineering and Biotechnology (ICGEB) is already a recognized center of excellence both within and outside the country. Hence international grants and funding must be aggressively pursued.

Biotechnology & Biosimilars:

Biotechnology & Biosimilar drugs could be yet another opportunity area for India to leapfrog. Biotech derived products are among the fastest growing in the world. These products being more expensive, if discovered and developed locally, could be affordable to many and also highly profitable. Immunological and DNA Vaccines could be the most cost-effective answer to healthcare problems in developing countries, including India and should, therefore, be given top priority. Here again, collaborative and international grants will be a critical success factor, just as the success of Biotech Companies in the US was fuelled by private venture capital.

Process Research:

While focusing on Product Research, the Process Research should not be ignored, as India possesses considerable skill base for this type of research, even better than China. Cost effective, more and more economical processes will always be necessary to make products more and more affordable to patients.

Natural Product Screening:

India’s rich bio-diversity should not go waste. The amount of work being done today is negligible as compared to the availability of “raw material” from the natural source. Indian bio-diversity should be captured and cataloged into a meaningful library to facilitate R&D in this area.

The ‘Open Innovation’ Model:

As the name suggest, ‘Open Innovation’ or the ‘Open Source Drug Discovery (OSDD)’ is an open source code model of discovering a New Chemical Entity (NCE) or a New Molecular Entity (NME). In this model all data generated related to the discovery research will be available in the open for collaborative inputs. In ‘Open Innovation’, the key component is the supportive pathway of its information network, which is driven by three key parameters of open development, open access and open source.

Council of Scientific and Industrial Research (CSIR) of India has adopted OSDD to discover more effective anti-tubercular medicines.

Other Areas:

Epidemiological Research: The Industry needs good reliable data on the burden of human diseases. In the absence of this data, it will be difficult to allocate resources and predict outcomes of new therapies.
Clinical Research (including toxicological / animal testing): This area needs to be made world class, sooner than the later, not only to bring down the cost of drug development, but also to ensure that the data thus produced are acceptable in other countries. India has the potential to emerge as the most sought after global hub for pre-clinical and clinical drug development processes.

Success of Indian pharmaceutical companies in R&D:

Following are the details of success of some major domestic pharmaceutical players in their pharmaceutical R&D initiatives:

Company	NCE Pipeline	Key Therapeutic Area
Biocon	Preclinical – 2Phase II – 2Phase III – 1	Inflammatory Diseases, Oncology, Diabetes
Piramala Healthcare	13 Compounds in Clinical Trials	Oncology, Infectious Diseases, Diabetes, Inflammatory Diseases
Glenmark	Discovery – 4Preclinical – 5Phase I – 1Phase II – 3	Metabolic Diseases, Infectious Diseases, Respiratory Diseases, Oncology
Suven Life Sciences	Discovery – 2Preclinical – 4Phase I – 1	Neurodegenerative Diseases, Obesity, Diabetes, Inflammatory Diseases
Dr. Reddy’s Lab	Preclinical – 1Phase II – 2Phase III – 1	Metabolic Disorders, Cardiac, Oncology
Advinus	Preclinical – 3	Diabetes, Cardiac, Lipid Disorders
Worckhardt	Preclinical – 10Phase II – 1	Infectious Diseases
Lupin	Discovery – 2Preclinical – 1	Migraine, Psoriasis, T.B.

(Source: Financial Express, March 13, 2009)

Basic pre-requisites to encourage R&D in India:

Innovation friendly ecosystem
Adequate Funding
World class Infrastructure
Ready talent pool

The key elements of creating an ecosystem conducive to R&D:

Knowledge and learning need to be upgraded through the universities and specialist centres of learning within India.
Science and Technological achievement should be recognized and rewarded by the sanction of grants and the future funding should be linked to scientific achievement.
Indian scientists working abroad are now inclined to return to India or network with laboratories in India. This trend should be effectively leveraged.

Key role of Universities:

Most of our raw talent goes abroad to pursue higher studies. International Schools of Science like Stanford or Rutgers should be encouraged to set up schools in India, just like Kellogg’s and Wharton who have set up Business Schools. It has been reported that the Government of India is actively looking into this matter.

R&D funding:

Access to world markets is the greatest opportunity in the entire process of globalisation and the funds available abroad are a valuable source of “funding” to boost R&D in India. Inadequacy of funding is the greatest concern.

The various ways of funding R&D could be considered as follows:

Self-financing Research: This is based on (i) “CSIR Model” i.e. recover research costs through commercialization – collaboration with industries to fund research projects and (ii) “Dr Reddy’s Lab / Glenmark Model” i.e. recover research costs by selling lead compounds without taking through to development – wealth creation by the creation of Intellectual Capital.
Overseas Funding: By way of joint R&D ventures with overseas collaborators; seeking grants from overseas Health Foundations; earnings from Contract Research as also from Clinical Development and transfer of aborted leads (‘Killing Fields” of the West) and collaborative projects on Orphan Drugs. Multinational companies could be encouraged to deploy resources, as this is where the real money is.
Venture Capital & Equity Market : This could be both via Private Venture Capital Funds and Special Government Institutions. If regulations permit, foreign venture funds may also wish to participate. Venture Capital and Equity Financing will emerge as important sources of finance once track record is demonstrated and ‘early wins’ are recorded.
Fiscal Support & Non-Fiscal Support: Will also be valuable in early stages of R&D, for which a variety of schemes are possible as follows:

Customs Duty Concessions: For Imports of specialised equipment, e.g. high throughput screening equipment, equipment for combinatorial chemistry, special analytical tools, specialised pilot plants, etc.
Income tax concessions (weighted tax deductibility): For both in-house and sponsored research programmes.
Soft loans: For financing approved R&D projects from Government financial institutions / banks.
Tax holidays: Deferral, loans on earnings from R&D.

Government funding: Government grants though available, tend to be small and typically targeted to government institutions or research bodies. There is very little government support for private sector R&D.

All these schemes need to be simple and hassle free and the eligibility criteria must be tight.

Infrastructure for R&D:

Scientific infrastructure needs of the country require to be urgently strengthened. Many of our Research Institutions require immediate upgradation. All research laboratories should be encouraged to be profit driven and plough back earning in modernization.

Quality of life (proximity to schooling, hospitals, recreation) and ambiance is important, particularly for scientists working abroad, who could be encouraged to return to India.

Setting up of world class Clinical Pharmacology Laboratories and Toxicology Centers must be considered. All clinical trials carried out in India must conform to GCP standards. At the same time, Indian registration procedures should be harmonized and simplified in order to minimize duplication of efforts and time loss.

Indian Patent infrastructure:

Indian patent infrastructure needs to be strengthened, among others, in the following areas:

Enhancing patent literacy both in Legal and Scientific Communities, who must be taught how to read, write and file a probe.
Making available appropriate Search Engines to our scientists to facilitate worldwide patent searches.
Creating world class Indian Patent Offices where the examination skills and resources will need considerable enhancement.
Advisory Services on Patents to Indian scientists to help in filing patents in other countries.

Partnering for Drug Discovery:

Many Indian pharma companies have entered into international collaborative arrangements, including R&D for development of new drugs for disease areas like cancer, diabetes, malaria and nervous system disorders.

DRL has partnered with ClinTec International for clinical trials and co-development of its anti-cancer drug. ClinTec International will possess the marketing rights for European markets while the commercialization for the rest of the world and US markets would be retained by DRL. It has also tied up with Torrent Pharma for the exclusive marketing rights of its two hypertension drugs in Russia, where Torrent has a strong market hold.

GSK and Ranbaxy set up an early-stage partnership in drug research, under which GSK will provide the Indian firm with leads, Ranbaxy will conduct lead optimization and animal trials, and GSK will take the drug through human trials. GSK will have exclusive rights to sell any resulting product in developed-world markets, and the two firms will co-promote it in India.

Conclusion:

- It is essential to have balanced policies offering equitable advantage to all stakeholders, including patients.

- Globalization brings opportunities like, access to markets, which are far more profitable than ours. Any policy of isolation or retaliation in an increasingly more global environment, could go against the general interest of the country.

- Acceptance by the Government of the benefits of privatization, market liberalization and rationalization of Government controls, will add speed to R&D initiatives.

- The trade policy is another important ingredient of public policy which can either reinforce or retard R&D efforts.

- Empirical evidence across the globe has demonstrated that a well balanced patent regime in the country encourages the inflow of technology, stimulates research and development, benefits both the national and the global pharmaceutical sectors and most importantly benefits the healthcare system.

- The Government, academia, scientific fraternity and the Pharmaceutical Industry should get involved in various relevant Public Private Partnership (PPP) arrangements for R&D to ensure wider access to newer and better medicines in the country, providing much needed stimulus to the public health interest of the nation.

References:

The Process of New Drug Discovery and Development, Second Edition, Charles G. Smith and James T. O’Donnell, 2006, p. 422, published by Informa Healthcare.
Goddamn the Pusher Man, Reason, April 2001
Abhinav Agrawal, Kamal Dua, Vaibhav Garg, U.V.S. Sara and Akash Taneja, 27- Challenges and Opportunities for The Indian Pharma Industry, Health Administrator vol. xx number 1&2 : 109-113
“Food & Drug Administration, Generic Drugs: Questions and Answers”. Food and Drug Administration, January 12, 2010.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Credible role of CCI and NPPA should allay fear of possible ill effects of FDI in Pharmaceuticals

Posted on August 8, 2011 by Tapan Ray

On August 3, 2011, ‘The Hindu Business Line’ reported, “Domestic drug-makers worried by side-effects of MNC buyouts.” It opined, “Acquisitions in the pharma industry came in for sharp focus, after several domestic drug-makers sold their operations partially or entirely to overseas companies – raising concerns of, among other things, increase in medicine prices.”

However, on August 4, 2011 the same business daily retorted, “MNC drug-makers allay fears of rise in prices.” It asserted, “Multinational drug-makers have stressed that they are committed to achieving the country’s healthcare goals”.

March 18, 2011 issue of ‘Export Import News’ wrote, “FDI in pharma sector comes down during current financial year as debate on ‘Take-Overs’ rages on”.

The Union Health Minister Mr. Ghulam Nabi Azad is reportedly arguing in favor of putting a cap on the FDI limit for pharmaceuticals in India. This is based on an apprehension that such FDI would have an overall adverse impact on the health care scenario of the country, especially, on pricing and availability of medicines to the common man.

It has also been reported that the Commerce Ministry is in favor of reviewing the situation after taking into consideration of the report to be submitted to them by an international consulting firm. This seems to have been prompted by the request of the Department of Pharmaceuticals (DoP) based on the recent takeovers of Indian companies by the Multi National Pharmaceutical Corporations. It appears that the recommendations of the Ministry of commerce, prepared in consultation with the DoP, will then be forwarded to the Economic Advisory Council to the Prime Minister for a final direction on the much hyped and talked about issue.

Views of the Planning Commission of India:

Meanwhile, most of the daily business papers of India reported that on July 12, 2011, the Deputy Chairman of the Planning Commission of India Mr. Montek Singh Ahluwalia commented, “I don’t think there is any move anywhere to prevent the expansion of existing 100% foreign owned pharmaceutical companies or to prevent green field investment by foreign companies.”

A reasonable comment:

This comment of Mr. Ahluwalia seems quite reasonable, considering the fact that full control of powers on Mergers and Acquisitions of the Competition Commission of India (CCI) effective June 1, 2011, has already been notified.

CCI to address all possible adverse impact on competition due to M&A:

The Competition Commission of India (CCI) will now carefully scrutinize the possibilities of the market being less competitive due to Mergers and Acquisitions (M&A) of companies across the industry in the country. This concern becomes even greater, especially, in the horizontal mergers and acquisitions between the comparable competitors in the same products or geographic markets, as we have been witnessing also in the pharmaceutical sector of India, over a period of time.

However, the country is yet to notice any quantifiable ill effects of such horizontal or vertical M&A. Neither is there any major case pending with the CCI in this regard for the pharmaceutical sector.

Competition related scrutiny is nothing new in the developed markets:

Competition related scrutiny during M&A is nothing new in the developed markets of the world and is already being followed in the USA, the countries within the European Union (EU) and elsewhere.

Key concerns with M&A in pharmaceuticals:

Many believe that M&A even in the oligopolistic nature of pharmaceutical market in any country, if not abused will not do any harm to competition. Possibly for this reason, it will be rather difficult to cite many examples, the world over, where companies have been stopped from merging by the regulators because of anti-competitive reasons.

Another school of thought, however, believes that large M&A could ultimately lead to oligopolistic nature of the pharmaceutical industry with adverse impact on competition. Thus M&A regulations are very important for this sector.

Moreover, we need to remember that competition no longer depends only on the number of players in any given field. To explain this point many people cite the example of two large global players in the field of brown liquid beverages, Coke and Pepsi, where despite being limited competition, consumers derive immense value added economic benefits due to cut throat competition between these two large players.

It goes without saying, CCI must ensure that in any M&A process, even within the pharmaceutical industry of India, such rivalry does not give way to an absolute monopoly, directly or indirectly.

M&A activity in India:

In India, the consolidation process within the Pharmaceutical Industry started gaining momentum way back in 2006 with the acquisition of Matrix Lab by Mylan. 2008 witnessed one of the biggest mergers in the Pharmaceutical Industry of India, when the third largest drug maker of Japan, Daiichi Sankyo acquired 63.9% stake of Ranbaxy Laboratories of India with US $4.6 billion.

Last year, in May 2010, Chicago based Abbott Laboratories acquired the branded generics business of Piramal Healthcare with US$3.72 billion. This was soon followed by the acquisition of Paras Pharma by Reckit Benkiser.

The ground realities:

In India, if we look at the ground reality, we find that the market competition is extremely fierce with each branded generic/generic drug (constituting over 99% of the Indian Pharmaceutical Market, IPM) having not less than 50 to 80 competitors within the same chemical compound. Moreover, 100% of the IPM is price regulated by the government, 20% under cost based price control and the balance 80% is under stringent price monitoring mechanism.

In an environment like this, the apprehension of threat to ‘public health interest’ due to irresponsible pricing will be rather imaginary. More so, when the medicine prices in India are the cheapest in the world, cheaper than even our next door neighbors like, Bangladesh, Pakistan and Sri Lanka.

CCI and NPPA will play a critical role:

One of the key concerns of the stakeholders in India is that M&A will allow the companies to come together to fix prices and resort to other anti competitive measures. However, in the pharmaceutical industry of the country this seems to be highly unlikely because of effective presence of the strong price regulator, National Pharmaceutical Pricing Authority (NPPA), as mentioned above.

Thus even after almost three years of acquisition, the product prices of Ranbaxy have remained stable, some in fact even declined. As per IMS MAT June data, prices of Ranbaxy products grew only by 0.6% in 2009 and actually fell by 1% in 2010. Similarly post acquisition of Piramal Healthcare by Abbott USA and Shantha Biotech by Sanofi of France, average product price increases of these two Indian subsidiaries were reported to be just around 2% and 0%, respectively.

However, even if there is any remote possibility of M&A having adverse effect on competition, it will now be taken care of effectively by the CCI, as it happens in many countries of the world, Israel being a recent example involving an Indian company.

‘Competition Commission’ does intervene:

In the process of the acquisition of Taro Pharma of Israel by Sun Pharma of India in 2008, being concerned with the possibility of price increases due to less competitive environment in three generic carbamazepine formulations, the Competition Commission in Israel intervened, as happened in many other countries. As a result, Sun Pharma was directed by the regulator to divest its rights to develop, manufacture and market of all these three formulations to Torrent Pharma or another Commission approved buyer.

There are many such examples, across the world, of Competition Commission playing a key role to negate any possible ill effect of M&A.

Will the new Competition Law delay the M&A process?

Some apprehensions have been expressed that the new competition law could delay the process of a Mergers and Acquisitions (M&A) . However, it is worth noting, in case the CCI will require raising any objection after the voluntary notification has been served, they will have to do so within 90 working days, otherwise the M&A process will deem to be solemnized.

Conclusion:

I reckon, in the M&A process, the entire Pharmaceutical Industry in India would continue to act responsibly with demonstrable commitment to help achieving the healthcare objectives of the nation.

Global players will keep on searching for their suitable targets in the emerging markets like India, just as Indian players are searching for the same in the global markets. This is a process of consolidation in any industry and will continue to take place across the world.

Adverse impact of M&A on competition, if any, will now be effectively taken care of by the CCI. In addition, the apprehension for any unreasonable price increases post M&A will be addressed by the National Pharmaceutical Pricing Authority (NPPA).

Thus, there are enough checks and balances already being in place to avoid any possible adverse impact due to M&A activities in India.In this evolving scenario, it is indeed difficult to understand, why the FDI issue related to M&A in the Pharmaceutical space of India is still catching headlines of both in the national and international media.

Be that as it may, it goes without saying that as we move on, the role of CCI in all M&A activities within the Pharmaceutical Industry of India will be keenly watched by all concerned, mainly to ensure that the vibrant competitive environment is kept alive within this sector.

Medical Tourism: A key growth driver in the healthcare space of India

Posted on July 25, 2011 by Tapan Ray

Since the last several years medical tourism is fast evolving as one of the key growth drivers of the healthcare sector, especially, in the western world like, the United States of America (USA) and the United Kingdom.

Dr. Fred Hansen in his article titled, “A revolution in healthcare medicine meets the marketplace (January 2008)” highlighted that the increasing number of high-quality healthcare facilities in developing countries are catering to medical tourists from the developed countries. Among them there are many uninsured Americans. Medical services outside USA in the developing countries are much cheaper. On average it is around 80%. For example, a cardiac surgery, which will cost more than US$ 50,000 in the United States, can be availed for US$ 20,000 in Singapore, US$ 12,000 in Thailand and between US$ 3,000 and US$ 10,000 in India. For this reason, Dr. Hansen predicted that the number of Americans traveling abroad for healthcare is expected to increase from around 1.3 million in 2008 to 6 million by 2010.

It has been reported that about 500,000 foreign patients traveled to India for medical care in 2005 from an estimated 150,000 patients in 2002 mainly from USA, UK and the Gulf countries for low-priced high quality healthcare in various disease areas. More and more people from these countries are finding the prospect of quality and value added medical care in countries like India financially attractive.

The Global Market:

In 2006 the global market for medical tourism was around US$ 60 billion. According to McKinsey & Company, this market could expand to US$100 billion by 2012.

An evolving sector in India:

Thus, medical tourism is fast establishing itself as an evolving area of business in the global healthcare space. In that space, India is fast emerging as one of the most preferred medical tourism destinations in the world.

This healthcare sector in India, despite being smaller compared to the western world, is surging ahead both at the national and the regional levels with enormous potential for future growth, if explored appropriately with a carefully worked out strategic game plan from the very nascent stage of its evolution process.

Economic Times, in its January 6, 2009 edition reported, “Indian medical tourism to touch Rs 9,500 Crore (around US $ 2.1 billion) by 2015”. Another report titled “Booming Medical Tourism in India”, published in December 2010 estimated that the medical tourism industry will generate revenues of around US$ 3 billion by 2013, although with a market share of just around 3% the of global medical tourism industry. Thus, in medical tourism, India still remains a smaller player with enormous growth potential.

The key reason and influencers:

The most common reason for medical tourism globally is lack of (adequate) health insurance. The most common emerging destinations of medical tourism in the world are Thailand, Singapore, Costa Rica, Panama, Brazil, Mexico, Malaysia and India.

Other factors influencing Medical Tourism particularly in India are as follows:

Significant cost advantages.
High quality treatment and hospital stay with the world class medical technological support
Rigid compliance with international treatment standards
No language barrier with the western world
Government taking active steps and interest in the medical tourism sector.

In all these five areas the significant advantages that India offers will need to be adequately encashed in a sustainable manner.

Significant cost advantage in India: The patients from other countries of the world who come to India for medical care not only get world class healthcare services, but also are offered to stay in high-end ‘luxury’ hospitals fully equipped with the latest television set, refrigerator and even in some cases a personal computer. All these are specially designed to cater to the needs of these groups of patients.

Moreover, according to John Lancaster of The Washington Post ( October 21, 2004) Indian private hospitals have a better mortality rate for heart surgery than American hospitals.

Cost Comparison: India vs UK:

Nature of Treatment	Treatment Approximate Cost in India ($) *	Cost in other Major Healthcare Destination ($) *	Approximate Waiting Periods in USA / UK (in months)
Open heart Surgery	4,500	> 18,000	9 – 11
Cranio-facial Surgery and skull base	4,300	> 13,000	6 – 8
Neuro-surgery with Hypothermia	6,500	> 21,000	12 – 14
Complex spine surgery with implants	4,300	> 13,000	9 – 11
Simple Spine surgery	2,100	> 6,500	9 – 11
Simple Brain Tumor -Biopsy -Surgery	1,000 4,300	> 4,300 > 10,000	6 – 8
Parkinsons -Lesion -DBS	2,100 17,000	> 6,500 > 26,000	9 – 11
Hip Replacement	4,300	> 13,000	9 – 11

* These costs are an average and may not be the actual cost to be incurred.

(Source: Health Line)

Most popular treatment areas:

The most popular treatment areas are as follows:

Alternative medicines
IVF treatment
Bone-marrow transplant
Cardiac bypass
Eye surgery
Dental care
Cosmetic surgery
Other areas of advanced medicine

The key components:

The following four basic components constitute the medical tourism industry:

• Healthcare providers: Hospitals, mainly corporate hospitals and doctors • Payers: Medical/ Health insurance companies • Pharmaceutical Companies: for high quality affordable medicines • IT companies : operating in the healthcare space Key drivers and barriers to growth: Following are the key growth drivers:

Government support through policies and initiatives
High quality, yet low cost care
Much less or no waiting time
World class private healthcare infrastructure
Rich source of natural and traditional medicines. Ministry of Tourism is also promoting the traditional systems of medicines, like, Ayurveda, Siddha, and Yoga to project India as a the destination of choice for even spiritual wellness and healing

In future, the world class and low cost private sector healthcare services are expected to drive the growth of the medical tourism in India. However, any shortages in the talent pool and inadequate other basic infrastructural support like, roads, airports and power could pose to be barriers to growth, if not addressed immediately.

The PPP model:

Currently the government has started adopting a Public Private Partnership (PPP) Model to provide world class healthcare services through medical tourism both at the national and the state levels. This PPP model has been designed in such a way that continuous improvement in healthcare infrastructure takes place through the private sector resources ably supported by the public sector in terms of policy, budgetary and fiscal support towards such initiatives.

US apprehension about growing Medical Tourism of India:

India Knowledge@Wharton in its June 2, 2011 issue reported as under:

In the past, US President Barack Obama had singled out India for what he sees as the country usurping American jobs and business.
In May 2009, he removed some tax incentives for US companies who allegedly preferred to outsource rather than create domestic jobs. “Buffalo before Bangalore” was his rallying call at the time.
In April 2011, he told a town hall gathering in Virginia that Americans shouldn’t have to go to India or Mexico for “cheap” health care. “I would like you to get it right here in the U.S.,” he said.

Conclusion:

As we have noted above, due to global economic meltdown even many corporate business houses in the developed world are under a serious cost containment pressure, which includes the medical expenses for their employees. Such cost pressure prompts/ could prompt them to send their employees to low cost destinations for treatment, without compromising on the quality of their healthcare needs. This trend could offer an additional significant growth opportunity in the medical tourism sector in India.

India should keep in mind that other countries, in quite close proximity to ours, like, Thailand, Singapore and Malaysia will continue to offer quite tough competition in the medical tourism space of our country.

However, superior healthcare services with a significant cost advantage at world class and internationally accredited facilities, treated by foreign qualified doctors, supported by English speaking support staff and equipped with better healthcare related IT services will only accelerate this trend in favor of India.

Thus it is a time to say, ‘medical tourism in India – Ahoy!’

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Utility Models’: A process of winning in the world of innovation

Posted on July 11, 2011 by Tapan Ray

On May 13, 2011 the Department of Industrial Policy and Promotion (DIPP) uploaded in their website a Discussion Paper on “Utility Models (UM)”. It was reported that as a policy initiative on Intellectual Property Rights (IPR) and to encourage innovation in the country, without diluting the present strict criteria for patentability, this discussion paper intends to trigger a healthy national debate on a very relevant subject.

Benefits of UM:

A publication titled, Utility Models and Innovation in Developing Countries by International Centre for Trade and Sustainable Development (ICTSD), Geneva, Switzerland highlights the following benefits of the UM:

• Fosters local innovation for local industries to produce more goods and generate more employment.

• Protects valuable inventions which otherwise would not be protected under the patent law of the country.

• Prevents free-riding of inventions by copiers who do not make any investment in R&D.

• Generates additional revenue for the government in terms of fees towards registration, search, publication, etc.

• Acts as a source of valuable information via published specifications.

• Reduces incentives for industry to lobby for the inclusion of minor inventions in the patent regime, which in turn would limit the public domain much more than the less expansive utility model system.

Does India need UM Laws?

Though India is fast emerging as a global economic power to reckon with, the Micro, Small and Medium Enterprises (MSME) of the country still do not have adequate resources and wherewithal to invest in various R&D projects in the right scale. Thus many of them are unable to come out with the types of inventions, which would have global potential and also conform to the prevailing Patents Act of India (2005).

Moreover, even today the benefits of acquiring ‘Intellectual property (IP)’ in the business process is still not widely understood and made use of, across various Indian industries. The requisite culture, appropriate ecosystem and thereby a groundswell for innovation are yet to take shape in our country.

Imitating or copying something new developed within or outside India is the order of the day in most of the industries in India. As the UM would require neither a high-tech infrastructural support nor high level of investments, coming out with a commercially relevant innovation with limited exclusivity period may not be as difficult, especially, by the MSME sector of India. UM could thus effectively help creating both an appropriate ecosystem and groundswell for innovation in the country.

As indicated in the DIPP Discussion Paper, many countries of the world like, Australia, China, Japan, Germany, France, Korea, Netherlands and others still find the UM as an extensively used tool to foster innovation within the local industries.

Utility models in some countries:

As indicated in the above DIPP Discussion Paper, I am quoting below examples of UM being practiced in some important countries:

COUNTRY	DATE OF FIRST LAW	DURATION OF PROTECTION	NAME	SUBSTANTIVE EXAMINATION
AUSTRALIA	1979/2001	8 years	Innovation Patent	no
AUSTRIA	1994	10 years	Utility Model	no
BELGIUM	1987	6 years	Short Term Patent	no
BRAZIL	1945	10 years	Utility Model	yes
CHINA	1985	10 years	Utility Model	no
FRANCE	1968	6 years	Utility Certificate	no
GERMANY	1891	10 years	Gebrauchsmuster	no
INDONESIA	1991	5 years	Simple Patent	yes
ITALY	1934	10 years	Utility Model	no
JAPAN	1905	not > 15 years	Utility Model	no
KOREA	1961	not > 15 years	Utility Model	yes – but deferred
MALAYSIA	1986	15 years	Utility Innovation	yes
MEXICO	1991	10 years	Utility Model	yes
NETHERLANDS	1995	6 years	Short Term Patent	no

(Source: Petty Patents by John Richards – updated version of Proceedings of the Fordham University School of Law International Intellectual Property Law and Policy Conference 1995,Juris Publishing and Sweet & Maxwell, 1998).

Therefore, keeping in mind of the needs of, especially, the MSME sector, I reckon, the UM should be seriously considered by the Government for expeditious implementation. As stated earlier, the UM would enable a large section of smaller entrepreneurs to get a limited commercial exclusivity for their inventions, which otherwise would not have been possible by them within the current patent regime of India.

Moreover, such inventions being incremental in nature, subsequent inventions would be triggered much faster with a cascading effect on continuous innovation in the country.

In this scenario, it will be very important to keep the registration cost for the UM within affordable limits by the Indian Patent Offices (IPO).

Scope of protection:

I reckon, all types of inventions, including mechanical and chemical ones, should be covered under the UM. If this does not happen the UM law will only be useful to a small section of the entrepreneurs.

Further, a large number of useful developments and improvements that may fall short of requirements of getting patents, could be well accommodated under the UM to encourage more and more innovations for rapid economic growth of the country.

In case of chemical or pharmaceutical innovations there will also be a chance for the smaller players to apply for the UM for incremental innovation, when such inventions would not pass the stringent qualifying criteria of Section 3(d) of the Indian Patents Act. I hasten to add that some contentious issues could possibly crop-up in this area, which needs to be resolved with well informed debates.

I would recommend that in India UM may be considered for innovations in areas of chemicals, pharmaceuticals, devices, tools, working instruments or apparatus with appropriate qualifying standards.

Parameters for consideration:

The inventive threshold for the UM would obviously be less than what is required by the patent laws of India. These should be very clearly enunciated by the policy makers without ambiguity whatsoever. However, the product novelty criteria in no case should be compromised, which should be similar to patents.

The period of exclusivity for UM varies internationally, for example, from 5 years in Indonesia to 10 years in China and 15 years in Korea. In India, the protection period should not ideally exceed 5 to 7 years from the date of grant of the UM with a much simpler registration process than the patent.

Section 8(1) of Patents Act may be suitably amended to include provision of UM. At the same time, providing details of corresponding UMs, along with related patent applications, if any, should be made mandatory.

An innovator should be allowed to apply for both patent and UM together. However, when only an application for patent will be filed and after scrutiny, if the same does not qualify for grant of patent, the concerned applicant may be allowed to convert the same application into UM, without any adverse impact on priority.

It is important to ensure that filing of a new UM nearer end of the term of patent is not allowed. The patent may, in such cases, be regarded as prior art by the IPO. Moreover, any provision for temporary protection of an invention as an UM pending grant of a patent should not be included in the legislation. Patent grant is usually a slow process in India, which quite often gets caught in the quagmire of delays and backlogs. In such a scenario, if any temporary exclusivity is granted by way of UM to the applicant, the entire patent processing system may get further slowed down.

Promoting domestic filings by MSMEs:

There does not seem to be any need to provide any specific provision to promote domestic filing by the MSMEs other than by way of providing for express provisions of disposal of infringement actions or other related contentious issues. Specific non-extendable time frames should be provided for all.

Currently the Courts in India have very little exposure to IP laws. Keeping this in mind UM laws should have simple wordings, free of ambiguity enunciating specific measures in case of infringement. Any invalidity should be clearly spelt out to avoid unnecessary appeals and unproductive, protracted and expensive litigation process.

To make Indian industries feel and understand the need for the protection/exclusivity for the UM, suitable awareness campaigns should be designed and championed by the government and the industry bodies with a focused approach to achieve this goal within a given timeframe.

UM and Traditional knowledge:

Traditional knowledge is something, which is already available or known to public at large and any protection to such knowledge would deny the civil society its legitimate rights in India. Thus, I shall strongly recommend that no exclusivity is granted to any person or industry on traditional knowledge.

However, rights to traditional knowledge may be provided through a different fail-proof mechanism to safeguard the interest of specific communities in India, who have inherited such knowledge through practice for generations.

The enforcement mechanism:

The enforcement mechanism for the UM should be similar to the Patent System or else a special ‘Utility Model Appellate Board (UMAB)’ may be considered for speedy redressal of infringement disputes.

Obviating monopolistic dominance:

Compensation / royalty rather than other methods of restrain could be a better option as most applicants would be MSMEs.

The UM law makers should, however, bear in mind that individual innovators although will have remedy within the law in case of a breach, due to sheer practical considerations, could at times feel helpless when a rich licensee will fail to compensate or pay royalty as per the order of a Court of law.

I would, therefore, suggest that there should be specific clauses in the UM law, which will be strong deterrent to such behaviour by unscrupulous elements, for example, payment of the compensation in an amount exceeding about 15 to 20 times of the original award in the event of default for no good reason. However in such a case the appropriate value may be properly decided to effectively avoid any attempt of ‘extortionary measures’ by anyone.

Conclusion:

It is believed by many that the UM framework with a lower threshold of invention will be able to encourage domestic incremental innovation in many areas of business. Thus, by providing protection to UM for about 5 years vis-a-vis 20 years, as provided by the patents, India can further stimulate the process of innovation, while discouraging monopolies in the country.

I reckon, a suitably designed UM framework will immensely encourage the domestic players to seek protection and obtain exclusivity for continuous incremental innovation in various facets of their respective businesses.

This process, in turn, will promote innovation based commercial business models within the country by offering low cost and affordable innovative products to the common man, adding simultaneously speed to the wheel of economic progress of the nation with inclusive growth.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Tracking MDG 6 in India – not a mean achievement to combat the dreaded disease

Posted on June 17, 2011 by Tapan Ray

At the turn of the new millennium, in 2000, 189 nations of the world under the banner of United Nations Development Program took a pledge to free people from extreme poverty and multiple deprivations.

This global pledge for humanity on eight key areas was termed as the ‘Millennium Development Goals (MDG)’, which the global community should achieve by 2015. Again in September 2010, the world reiterated its pledge to hasten progress towards achieving these goals within the same pre-scheduled time period.

Combating HIV/AIDS is the sixth of the eight MDGs that India, along with other 188 nations, is expected to achieve by 2015.

Looking Back:

Way back in late 1986, the first incidence HIV in India was diagnosed among the sex workers in Chennai. The origin of the infection was reported to be from the foreign visitors.

The National AIDS Control Organization (NACO) was constituted in the following year and by end 1987, around 135 persons were diagnosed as HIV positive and 14 were suffering from AIDS. Almost around the same time, a rapid spread of HIV was reported from within the ‘Injecting Drug Users (IDU)’ in Manipur, Mizoram and Nagaland. Incidentally, all these states have a common border with Myanmar.

According to the first joint survey conducted by UNAIDS and NACO in 2007, the number of people living with HIV in India was estimated between 2 million and 3.1 million. In 2009 this estimated number declined to 2.4 million.

As per the Government of India (March 1, 2011), there has been an overall reduction in adult HIV prevalence and HIV incidence (new infections) in the country. The estimated number of new annual HIV infections has declined by more than 50% over the last decade, from estimated 2.7 lakhs in 2000 to approximately 1.2 lakhs in 2009. Adult HIV prevalence at national level has declined from 0.41% in 2000 to 0.31% in 2009, although variations exist across the states.

Some actionable areas:

As reported by the National Aids Control Organization (NACO), ‘Injecting Drug Use (IDU)’ and sexual intercourse through homosexual route by some section of the male population have still remained the routes of transmission of HIV in different parts of India, which need to be addressed with a much greater detail.

In the North Eastern States, besides IDU, HIV prevalence among the Female Sex Workers (FSW) is increasing. This suggests a two-prong spread of the pandemic infection in the country.

Moreover, HIV prevalence within the women attending Ante Natal Clinics (ANCs) in North Indian states also needs to be addressed with utmost care.

HIV/AIDS and Drug Prices:

Pricing of HIV/AIDS drugs are globally a very sensitive issue. Currently, because of the availability of many generic drugs, intense competition between them and direct price negotiation for newer brands, there has been a declining price trend for many HIV/AIDS medicines in the developing countries, like India.

This situation has enabled about 5.25 million HIV positive persons from the developing countries to undergo treatment for the acquired infection.

In India, people living with HIV/AIDS have access to Anti-retroviral (ART) drugs, free of cost, through 292 ART Therapy centers and 550 Link ART Centers spread across the country.

As per the Ministry of Health (February 22, 2011), there is no gap between demand and supply of drugs for the HIV/AIDS patients in the country. About 3, 87,205 patients are on ART therapy through the above centers (2010).

Recently product patents for two key HIV/AIDS medicines namely, Lopinavir/Ritonavir and Atazanavir bisulphate were not granted by the Indian Patent Office giving reasons of ‘lacked inventive ingenuity’. Though, this is a patent law related legal issue, it has been hyped up as a ‘major victory for public health and access to affordable treatment’.

I hasten to add, despite this situation, all drugs used for the treatment of HIV/ AIDS are still not available at an affordable price to the poor, across the world.

Funding for HIV/AIDS treatment in India:

The Finance Minister of India in his Union Budget proposal for 2011-12 allocated a sum of Rs. 1700 Crore (around US$ 380 million ) as against an outlay of Rs.1435 Crore (around US$ 320 million) in 2010-11 for the treatment of HIV/AIDS.

Market Size of HIV/AIDS Drugs:

Current market size of HIV drugs is around Rs. 151 Crores (around US$ 36 million) growing at 11% over the previous year. As per reported data, around 10 HIV drugs are now being marketed in India with 162 different brand names by over 30 companies including, Cipla, FDC, Torrent, Hetero, Sun Pharma, Lupin, Ranbaxy, Zydus Cadila, Natco, Alkem and GSK.

Globally Gilead, Abbott, Pfizer, GlaxoSmithKline, Merck and BMS are among the key manufacturers of HIV drugs.

The world market size for HIV Drugs is estimated to exceed US $15.5 billion by 2015. The key growth driver is still increasing disease prevalence in some countries of the world. Treatment of HIV/AIDS with cheaper Anti-retroviral (ART) drugs has transformed the treatment of this dreaded disease into a manageable proportion.

Unique initiative of UNITAIDS:

For diseases like HIV/AIDS, one school of thought leaders feel that the way forward to resolve such pricing issue is by putting in place an alternative system of ‘remuneration and reward’ to further R&D initiatives in the key areas of public health interest, globally.

Towards this direction, in 2009 UNITAID, an international institution against AIDS, TB and malaria, proposed the ‘Patent Pools’ concept. This system of ‘pool’ will hold licenses on various patented HIV/AIDS drugs, which the generic manufacturers will be allowed to produce at a much lesser price for the least developing countries of the world.

National Institute of Health (NIH) of USA has now become the first patent holder to license a HIV/AIDS drug Darunavir to the patent pool. It appears, the ‘Patent Pool’ initiative to be successful, voluntary participation of larger global pharmaceutical companies is absolutely critical, though many innovator companies may not find any significant commercial benefit within this system.

Will HIV Vaccine be the ultimate answer?

Still with so many newly infected people with HIV every day in various corners of the world, a suitable vaccine to prevent the infection would indeed be indispensable to effectively control this disease. An affordable HIV vaccine could thus be an appropriate answer to fight against HIV/AIDS across the world.

Early In March 2011, the International AIDS Vaccine Initiative (IAVI) and the Translational Health Sciences and Technology Institute (THSTI), of the Department of Biotechnology, Government of India announced together to fund an HIV vaccine design program in India. This HIV vaccine initiative is estimated to cost around Rs.50 Crore (around US$ 12 million) over a five year period.

Recent Developments:

Early this year, UNAIDS/WHO/UNDP launched a new policy brief urging countries to use IP flexibilities under the TRIPS Agreement.

The brief includes flexibilities like, compulsory licensing, parallel imports exemption of ‘Bolar Provision’ and highlights the success achieved in reducing prices in Brazil through the threat of compulsory licensing. The brief also highlights India’s 3(d) provision.

Conclusion:

In India, although the overall progress of MDG initiatives is not satisfactory just yet, ongoing intense efforts to control and treat HIV/AIDS seem to be paying good dividends.

It is interesting to note, UNAIDS ‘Outlook Report 2010’ highlights, “Up to 80% of the cost of treatment isn’t for the medication but for the systems to get it to a person and to keep him or her on it. Globally, only one third of people who need treatment are on it.” I reckon, the situation is no different in India.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘India Taskforce’ takes the first step in an arduous task to bridge the trust deficit.

Posted on June 13, 2011 by Tapan Ray

To prepare a comprehensive long term strategy to unleash the growth potential of the Pharmaceutical Industry of India considering all its current issues, the Ministry of Health and Family Welfare announced constitution of a taskforce on March 15, 2011 involving all the stakeholders, as mentioned below. As per reports, the first meeting of the committee was held on June 6, 2011 to deliberate on the mandated goals.

Within 3 months the taskforce, under the chairmanship of V.M. Katoch, Secretary, Department of Health Research and Director-General, Indian Council of Medical Research (ICMR), is expected to work out and submit a short, medium and long term strategic path and goals to the Government, highlighting the key and specific policy measures required to achieve these objectives.

The taskforce will have members drawn from:

National Pharmaceutical Pricing Authority,
Department of Industry Policy and Promotion,
Indian Drug Manufacturers Association, Mumbai,
Indian Pharmaceutical Alliance, Mumbai,
Organization of Pharmaceutical Producers of India, Mumbai,
Federation of Pharmaceutical Entrepreneurs, Gurgaon,
Confederation of Indian Pharmaceutical Industry,
Bulk Drug Manufacturers’ Association, Hyderabad,
SME Pharma Industry Confederation, New Delhi
Drug Controller General of India as the Member Secretary.

The focus areas:

The report has been mandated to cover the following critical areas:

Evolving a short, medium and long-term policy and strategy to make India a hub for drug discovery, research and development.
Evolving strategies to further the interests of Indian pharma industry in the light of issues related to intellectual property rights and recommend strategies to capitalize the opportunity of $60 to $80 billion drugs going off-patent over the next five years.
Evolve policy measures to assure national drugs security by promoting indigenous production of bulk drugs, preventing takeover of Indian pharma industry by multi-national corporations, drug pricing, promotion of generic drugs
Recommend measures to assure adequate availability of quality generic drugs at affordable prices.
Recommend measures to tackle the problem of spurious drugs and use of anti-counterfeit technologies.

Estimates and Perspectives:

The pharma industry is growing at around 1.5-1.6 times the Gross Domestic Product growth of India
Currently, India ranks third in the world of volume of manufacturing pharmaceutical products
The Indian pharmaceutical industry is expected to grow at a rate of around 15 % till 2015
The retail pharmaceutical market in India is expected to cross US$ 20 billion by 2015
According to a study by FICCI-Ernst & Young India will open a probable US$ 8 billion market for MNCs selling patented drugs in India by 2015
The number of pharmaceutical retailers is estimated to grow from 5,50,000, to 7,50,000 by 2015
At least 2,00,000 more pharma graduates would be required by the Indian pharmaceutical industry by 2015
The Indian drug and pharmaceuticals sector attracted Foreign Direct Investments to the tune of US$ 1.43 billion from April 2000 to December 2008 (Ministry of Commerce and Industry), which is expected to increase significantly along with the policy reform measures and increased Government investment (3%-4%) as a percentage of GDP towards healthcare, by 2015
The Minister of Commerce estimates that US$ 6.31 billion will be invested in the domestic pharmaceutical sector
Due to low cost of R&D, the Indian pharmaceutical off-shoring industry is expected to be a US$ 2.5 billion opportunity by 2012

Key growth drivers: Local and Global:

Local: • Rapidly growing middle class population of the country with increasing disposable income. • High quality and cost effective domestic generic drug manufacturers are achieving increasing penetration in local, developed and emerging markets. • Rising per capita income of the population and inefficiency of the public healthcare system will encourage private healthcare systems of various types and scales to flourish. • High probability of emergence of a robust healthcare financing/insurance model for all strata of society. • Fast growing Medical Tourism. • Evolving combo-business model of global pharmaceutical companies with both patented and generic drugs is boosting local outsourcing and collaboration opportunities. Global: Global pharmaceutical industry is going through a rapid process of transformation. The moot question to answer now is how the drug discovery process can meet the unmet needs of the patients and yet remain cost effective.

Cost containment pressure due to various factors is further accelerating this process. CRAMS business, an important outcome of this transformation process, will be the key growth driver for many Indian domestic pharmaceutical players in times to come. Bridging the ‘Trust Deficit’ is one of the key Challenges:

Like all other industries, Pharmaceutical Industry in India has its own sets of challenges and opportunities under which it operates. Some of the challenges the industry faces are:

Unfortunate “Trust Deficit” between the Government and the Industry to improve access to affordable modern medicines.
Regulatory red tape and lack of initiative towards international harmonization.
Inadequate infrastructure and abysmal public delivery system.
Lack of adequate number of qualified healthcare professionals.
Inadequate innovation friendly ecosystem to encourage R&D and other non-product related innovation in the pharmaceutical value chain.
Myopic Drug Policies have failed to deliver.
Addressing needs of over 350 million BPL families who cannot afford to buy any healthcare products and services.
‘80% out of pocket expenditure’ of the common man towards healthcare.
Inadequate Public Private Partnership (PPP) initiatives in most of the critical areas of healthcare.

Urgent need to bridge the ‘Trust Deficit’ and improve public perception of the Industry:

Like many other countries of the world, in India too there is a negative public perception about the pharmaceutical industry. Recent reports on ‘clinical trials related patient’s compensation’ or the government intervention on allegedly gross ‘unethical’ marketing practices by the pharmaceutical companies, further strengthen such belief. Unfortunately, despite meteoric success of the generic pharmaceutical industry of India in the global arena, public perception of the industry still remains as one, which is being driven by profiteering motive at the cost of the precious lives of ailing common population of the country. This is indeed acting as a strong retarding force. As a result the regulators are also compelled to introduce more of growth stifling measures at a fairly regular pace.

A new ‘Harris Poll’ conducted in the US between November 8 and 15, 2010 reports as follows:

Top industries that largest numbers of people believe should be more regulated

Industry	% of respondents
Oil	47
Pharmaceuticals	46
Health Insurance	42
Tobacco	38
Banks	34
Managed Care	34

That an overwhelming 46% respondent in the US feels that the Pharmaceutical Industry should be regulated, only reflects a poor public perception of the industry in the USA.

Industries trusted by the fewest people

Industry	% of respondents
Tobacco	2
Oil	4
Telecommunication	7
Managed Care	7
Life Insurance Companies	10
Pharmaceuticals	11

(Source: Harris Poll 2010)

It is indeed an irony that a miniscule 11% respondents trust pharmaceutical industry in the USA.

Thus in the prevailing scenario globally, the Indian Pharmaceutical Industry should take more demonstrable self-regulatory measures to improve its public perception and make its growth more inclusive, in the best possible way that it can. Without active support of the government, media and other stakeholders, through conscious efforts to improve its image, all the efforts of the taskforce may ultimately get converted into a zero sum game.

Job Creation by the industry is of critical importance: Pharmaceutical sector in India has created employment for approximately 3 million people from 23,000 plus units. Accelerated growth in job creation, will not only open up more opportunities to pharmaceutical professionals, but will also fuel growth opportunities in allied business segments like Laboratory, Scientific instruments, Medical Devices and Pharma machinery manufacturing sectors.

Despite all these, it is worth noting that a major challenge still remains in getting employable workforce with the required skill sets. This issue will grow by manifold, as we move on, if adequate vocational training institutes are not put in place on time to generate employable workforce for the industry.

Government Initiatives, thus far, are still less than adequate: The government of India has started working out some policy and fiscal initiatives, though grossly inadequate, for the growth of the pharmaceutical business in India. Some of the measures adopted by the Government are follows:

Pharmaceutical units are eligible for weighted tax reduction at 175% for the research and development expenditure obtained.
Two new schemes namely, New Millennium Indian Technology Leadership Initiative and the Drugs and Pharmaceuticals Research Program have been launched by the Government.
The Government is contemplating the creation of SRV or special purpose vehicles with an insurance cover to be used for funding new drug research
The Department of Pharmaceuticals is mulling the creation of drug research facilities which can be used by private companies for research work on rent

Pharmaceutical Export going North: In recent years, despite economic slowdown in the global economy, pharmaceutical exports in India have registered a commendable growth. Export has emerged as an important growth driver for the domestic pharmaceutical industry with over 50 % of their total revenue coming from the overseas markets. For the financial year 2008-09 the export of drugs is estimated to be around US $8.25 billion as per the Pharmaceutical Export Council of India (Pharmexil). A survey undertaken by FICCI reported 16% growth in India’s pharmaceutical export during 2009-2010.

This trend needs to be encouraged and be given further boost.

Conclusion:

The newly formed taskforce will hopefully be able to address all these issues in an integrated way to guide this life-line industry to a much higher growth trajectory to compete effectively not only in the global generic space, but also with the global innovator companies, sooner than later.

So the ball game for the taskforce is to recommend strategy and policy measures to improve access to modern medicines by reducing ‘out of pocket’ expenses significantly through public/private health insurance initiatives, protect public health interest and foster a climate for innovation, simultaneously, and certainly not one at the cost of the other.

By: Tapan J Ray

In the cacophony of FDI in the pharmaceutical sector of India

Posted on June 6, 2011 by Tapan Ray

It is a widely accepted fact that Foreign Direct Investment (FDI) in the Pharmaceutical industry, just like in any other industry, is important for an emerging economy like India, mainly because of various important benefits that the country would derive out of such investments, like for example:

Job creation
World class infrastructure development
Transfer of modern technology
Help creating a talent pool through international training and development
Meeting unmet needs of patients through innovative medicines
Help imbibing the best practices of the world

Types of FDIs in the Pharmaceutical sector of India:

There are mainly three types of FDIs that we have witnessed so far in India:

Green field investment: Like, setting up new manufacturing facility at Vizag by Eisai of Japan
Brown field investment: Like, acquisition of Ranbaxy by Daiichi Sankyo of Japan, Piramal Healthcare by Abbott USA or Shantha Biotech by Sanofi Aventis of France.
Joint venture: Like, Bayer Healthcare and Cadila Healthcare or Sun Pharma and MSD etc.

Besides these, as mentioned below, there have been some collaborative arrangements, as well, between global and Indian Pharmaceutical companies in the last five years like, GSK with Dr. Reddy’s Laboratories (DRL), Pfizer with Biocon etc.

Key drivers for FDI:

Following are the key factors, which attract FDI in the pharmaceutical sector, especially in an emerging market like India:

Domestic market size, prospects for future market growth,
Cheaper operating cost
Cheaper input and English-speaking skilled manpower cost
Regulatory environment
Pricing environment
Robust IT infrastructure
Legal, IPR and financial framework

Relationship between FDI and Intellectual Property (IP) Environment:

Some recent media reports in various parts of the world including India had highlighted that China attracts more investment from foreign drug makers due to more robust Intellectual Property (IP) laws in that country.

US Trade Representatives (USTR) is one such agency which evaluates the adequacy and effectiveness of protection of Intellectual Property Rights (IPR) with US trading partners in various countries of the world through annual release of their ‘Special 301 Report’.

The report of US Trade Representatives (USTR 2011 Special 301) rates IPR regime of both China and India as unsatisfactory, so far as law enforcement, piracy prevention and transparency are concerned. The two main categories in the report are the ‘Priority Watch List’ and the ‘Watch List’. Both India and China fall under ‘Priority Watch List’ of this report.

An apparent contradiction:
The key question, in this context, that is being raised for quite some time now is, whether the decisions of foreign drug makers to invest in the emerging markets, like India and China are predominantly dependent on the IPR scenario in the respective countries.

If it is so, some would obviously like to know whether or not the ‘USTR 2011 Special 301 Report’ contradicts the above hypotheses.

Notwithstanding ‘USTR Special 301 Reports’ and being featured in their ‘Priority Watch List’ year after year, China continues to attract more and more FDI in pharmaceuticals over a long period of time. In any case, the FDI from USA in China was just around 12% of the total FDI that the country attracted in 2008. The same trend continues even today.

However, without going into the details of any report, relative robustness of IPR regime could at best be just one of the several key factors for a research based global pharmaceutical company to decide on FDI in any emerging market of the world.

Relatively speaking:

China is certainly attracting more FDI in the Pharma space than India. According to “The Survey of Foreign Investments in China’s Medicine Industry” of the Government of China, the FDI in the pharmaceutical industry of the country for a three year period commencing from 2006 to 2008 was around US $ 1772 million. The percentage of total investments made by the major countries is as follows:

Country wise pharmaceutical FDI % in China in 2008

Rank	Country	%
1.	Hong Kong	39.69
2.	United States	11.95
3.	British Virgin Island	11.64
4.	Bermuda	6.45
5.	Singapore	4.91

(Source: Invest in China 2009, Ministry of Commerce of the People’s Republic of China)

Whereas, as per Mr. Jyotiraditya Scindia, Minister of State, Ministry of Commerce and Industry, from the year 2006-07 up to September 2009, India attracted FDI of US $ 817.39 million, as follows:

FDI ( US$ million)

Sector	2006-07	2007-08	2008-09	2009-10 (upto Sept.09)	Cumulative
DRUGS & PHARMACEUTICALS	214.84	334.09	181.61	86.85	817.39

These figures would change significantly if FDI through M&A is taken into consideration.

In any case, this trend should not necessarily be exclusively correlated to the relative robustness of the IPR regime in India and China, notwithstanding the fact that 5.5% of all global pharmaceutical patent applications named one inventor or more located in India as against 8.4% located in China (Based on WIPO PCT applications)

Impact of FDI on the Indian Pharmaceutical Sector:

Some important FDI in India from 2006 to 2011

Year	Indian Companies	Multinational Companies	Value ($Mn)	Type
2006
	Matrix Labs	Mylan	736	Acquisition
	Dabur Pharma	Fresenius Kabi	219	Acquisition
	Ranbaxy Labs	Daiichi Sankyo	4,600	Acquisition
	Shantha Biotech	Sanofi-aventis	783	Acquisition
2009
	Orchid Chemicals	Hospira	400	Business Buyout
	Aurobindo Pharma	Pfizer	Not disclosed	Generic Development and Supply
	Dr Reddy’s Labs	GlaxoSmithKline	Not disclosed	Generic Development and Supply
2010
	Piramal Healthcare	Abbott	3,720	Business Buyout
	Paras Pharma	Reckitt Benkiser	726	Acquisition
	Claris Lifesciences	Pfizer	Not disclosed	Generic Development and Supply
	Biocon	Pfizer	350	Insulin Marketing Deal
2011
	Cadila Healthcare	Bayer	Not disclosed	Marketing Joint Venture
	Sun Pharma	Merck & Co.	Not disclosed	Marketing, Manufacturing Joint Venture

There is no published data, as yet, to justify that the inflow of FDI in the pharmaceutical sector of India, including acquisition of large domestic pharmaceutical players like, Ranbaxy, Piramal Healthcare etc., had any adverse impact whatsoever on the country.

However, the reality is that such apprehension, especially the acquisition of some ‘Pharma Crown Jewels’ of India by the Multinational Companies (MNCs), though not fact-based, are apparently getting reverberated as a ‘sinister and sordid design’ even in the corridors of power ranging from the Ministry of Commerce, Cabinet Committee of Economic Affairs (CCEA), Planning Commission of India to Joint Parliamentary committee for Commerce.

It appears that the government is adopting a ‘wait and watch’ policy in this area for now, presumably because of the fact that the newly formed ‘Competition Commission of India (CCI)’ from now onwards will keep a careful vigil on such mega acquisitions.

Poor healthcare coverage could be a key barrier:

As indicated above, relative size and growth of the domestic pharmaceutical market together with healthcare coverage and delivery mechanism of a country could well be the most critical factor to influence foreign investment decision of the global pharmaceutical companies.

In global ranking, China is currently the seventh (India: 14) largest pharmaceutical market and is expected to be the fifth (India: 10) largest market by 2015 and the third largest by 2020. Chinese pharmaceutical market is expected to grow by over 15% per annum in the next five years, which is higher than India, even without considering the current base of both the countries.
Even in Health Insurance space, “India ranks 136th on penetration levels and lags behind China (106), Thailand (87), Russia (86), Brazil (85), Japan (61) and the US (9),” reported ‘Indo-Asian News Service (IANS)’ on July 21, 2009, in a paper titled, “India’s insurance penetration lower than world average”, jointly prepared by Crisil and Assocham.

Moreover, ‘out of pocket’ healthcare expenditure in India is one of the highest in the world at around 80% against 61% in China.

Country Attractiveness Index (CAI):

‘A.T. Kearney’ developed a CAI for clinical trials, for the use of, especially, the pharmaceutical industry executives to make more informed decision on offshore clinical trials. As per this study, the CAI of China is 6.10 against 5.58 of India. This could mainly be due to prevailing lackadaisical regulatory environment in India.
Other reasons to influence FDI:
I would reckon, all foreign direct investments (FDI) by the global pharmaceutical companies are driven by a combination of key business factors, as mentioned above, IPR ecosystem in the country is just one of them. This is vindicated by a recent report, which is as follows:

“Novartis has signed an agreement to build a pharmaceutical manufacturing facility in St. Petersburg, Russia. The plant is part of a $500 million Novartis investment in infrastructure, health care initiatives, and R&D in Russia over the next five years”.

The reason behind this investment was reported as follows:
“The announcement follows a pledge late last year by Russian Prime Minister Vladimir Putin of some $4 billion in federal funding for pharmaceutical industry development over the next 10 years. The government has set a goal for local industry to produce 90% of Russia’s “essential medicines”—about half of the country’s total pharmaceutical sales—by 2020.”
Other recent examples of FDI made by the global majors in other countries, which will support my above statement, are as follows:

1. Novo Nordisk: US $100 million in Russia 2. Sanofi-Aventis: a plant in Saudi Arabia. 3. Eisai: relocated global Aricept manufacturing facility to India for worldwide export.

Conclusion:

‘The Journal of International Business Studies’ (1999) 30, 1–24 based on the results from an econometric analysis of 136 laboratory investments reconfirms that relative market size, growth and the strength of science base of a country would ultimately influence FDI in pharmaceutical research and development in an emerging market. The study also reiterated that these factors hold good for even Japanese, European and U.S. pharmaceutical companies.

Thus, to attract more FDI in the pharmaceutical sector and effectively compete with China, India should primarily focus in creating a vibrant and large domestic pharmaceutical product and services market reflecting sustainable high inclusive growth. A comprehensive ecosystem to provide healthcare to all, efficient regulatory mechanism, effective well balanced IP environment and a robust legal and financial framework will further hasten the process.

By: Tapan J Ray

PILMAN

A Tapan Ray Website

Tag Archives: in

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‘India Taskforce’ takes the first step in an arduous task to bridge the trust deficit.

In the cacophony of FDI in the pharmaceutical sector of India