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Healthcare Tourism: India needs to step on the gas

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Healthcare Tourism or Medical Tourism are the terminologies initially coined by the travel agents and the media when patients travel outside their national boundaries to seek either more specialized and/or cheaper but high quality healthcare available in other countries.

World Health Organization (WHO) defines Healthcare Tourism as an activity that covers:

  • Medical care
  • Sickness & well-being
  • Rehabilitation & recuperation

The reasons:

The main reasons of healthcare tourism are:

  1. High medical costs, especially for those patients who are under-insured or uninsured
  2. Long waiting period for elective surgery
  3. To avail technologically more advanced medical treatment and care

For example, USA though globally recognized as one of the technologically most advanced countries in providing high quality healthcare to the patients, the cost of comprehensive healthcare in the country is often beyond reach of many Americans.

In not too distant past (2000), the World Health Organization (WHO) ranked USA as the country with most expensive healthcare systems in the world. Moreover, it has also been reported that in the US, the fees paid to doctors for medical services are usually much higher for an ‘uninsured’ patient than one who is ‘insured’.

Such a scenario has given rise to situation where many Americans travel out of the country for a lower cost medical care, if not adequately insured.

‘Time Health’ in an article titled ‘A Brief History of Medical Tourism’ stated as follows:

-       In 2006: 150,000 US citizens underwent medical treatment abroad

-       In 2007: the number grew to an estimated 750,000

-       In 2008: it increased to 1.3 million

-       In 2010: the figure further swelled to an estimated 6 million citizens.

The article commented that “Patients are packing suitcases and boarding planes for everything from face lifts to heart bypasses to fertility treatments.”

The key influencers and preferred destinations:

The most common influencer for healthcare tourism globally, as stated earlier, is lack of or inadequate health insurance and the most common emerging destinations for healthcare tourism in the world are Thailand, Singapore, Costa Rica, Panama, Brazil, Mexico, Malaysia and India. This is mainly because of fact that the costs of availing high quality healthcare services in these countries are much cheaper- on an average around 80%. For example, a cardiac surgery, which will cost more than US$ 50,000 in the US, 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.

Other factors influencing Healthcare Tourism, particularly in India, besides significant cost advantages, are:

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

In all these four areas significant advantages that India offers will need to be adequately leveraged in a sustainable manner by the country.

Most popular treatment areas:

The most popular treatment areas are as follows:

  1. Alternative medicines
  2. IVF treatment
  3. Bone-marrow transplant
  4. Cardiac bypass
  5. Eye surgery
  6. Dental care
  7. Cosmetic surgery
  8. Other areas of advanced medicine

Evolving scenario:

Since last several years healthcare tourism is fast evolving as one of the key growth drivers of the global healthcare sector as a whole.

Dr. Fred Hansen in his article titled, ‘A Revolution in Healthcare’, highlighted that increasing number of high-quality healthcare facilities in the developing coun­tries are attracting medical tourists from the developed countries like the US and the European Union (EU).

Apprehension in the US about growing Healthcare 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.
  • In January 2012, President Obama reiterated the same intent in the run up to the forthcoming US presidential election for his second term.

The Global Market:

In 2006 the global market for healthcare tourism was around US$ 60 billion. According to McKinsey & Company, this market is expected to expand to over US$110 billion by 2012.

India – a contender for supremacy:

Healthcare tourism 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 charted strategic game plan in its evolution process.

Currently India is emerging as one of the preferred destinations for global health tourists. The country received 150,000 medical tourists in 2004, which grew by 33% to 200,000 in 2008, mainly from the USA, UK and the Gulf countries, primarily due to low-priced and high quality healthcare in wide ranging disease areas. More and more people from these countries are finding the prospect of high quality and value added medical care in India financially attractive.  As per estimates, India will receive over 500,000 medical tourists per year come 2015.

While visiting India for healthcare, patients not only get treated by the best medical professionals with western medical training, but also are able to stay in deluxe accommodations fully equipped with the latest television set, refrigerator and in some cases even a personal computer, without facing any language barrier and that too by paying just around 1/10th of the price charged in the developed nations.

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.

With over 8,500 beds ‘Apollo Hospitals’ chain runs 53 different hospitals across the country, followed by “Max Healthcare” that runs 8 medical centers in the National Capital Region (NCR) in India.

Indian Market:

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, though with a market share of just around 3% of the of global healthcare tourism industry.  Thus, in healthcare tourism, India still remains a smaller player with enormous growth potential.

New job creation:

Both Public and private sector studies estimate that healthcare tourism in India could attract around US$ 3 billion to the country by 2013 with around 40 million direct and indirect job opportunities.

Cost advantage in India:

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

Parkinson -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)

The key components:

The following four basic components constitute the healthcare 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

Growth drivers and barriers:

Following are the key growth drivers:

  1. Government support through policies and initiatives
  2. High quality, yet low cost care
  3. Much less or no waiting time
  4. World class private healthcare infrastructure
  5. Rich source of natural and traditional medicines. Ministry of Tourism is  promoting the traditional systems of medicines, like,  Ayurveda, Siddha, and Yoga to project India as a the destination of choice for 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 inadequacy in other basic infrastructural support like roads, airports and power could pose to be barriers to growth of this sector, if not addressed immediately.

Government Assistance:

The government of India is now supporting the hospitals to get the Joint Commission International (JCI) accreditation.

In 2009 the government announced a revised guidelines for ‘Marketing Development Assistance (MDA)’ scheme for approved Medical Tourism service providers like, representatives of hospitals accredited by Joint Commission for International Accredited Hospitals (JCI) and National Accreditation Board of Hospitals (NABH) and Medical Tourism facilitators (Travel Agents/Tour Operators approved by Ministry of Tourism, Government of India and engaged in Medical Tourism (MTSP) and to the approved Wellness Centers i.e. representatives of the Wellness Centers accredited by the State Governments.

All these measures are expected to accelerate the growth of healthcare Tourism industry in India.

List of JCI Accredited Hospitals in India:

Following are the JCI Accredited Hospitals in India till 2007:

Name and Place Accredited on
1. Indraprasta Apollo Hospital, New Delhi June 18, 2005
2. Wockhardt Hospital, Mumbai August 25, 2005
3. Apollo Hospitals, Chennai January 29, 2006Disease- or Condition-Specific Care (DCSC)Certification for Acute Stroke: 29 April 2006
4. Shroff Eye Hospital, Mumbai February 18, 2006
5. Apollo Hospitals, Hyderabad April 28, 2006
6. Asian Heart Institute, Mumbai October 20, 2006
7. Satguru Pratap Singh Apollo Hospital, Punjab February 3, 2007
8. Fortis Hospital, Mohali June 15, 2007

Source: Joint Commission International, 2007

The challenges:

Following are the key challenges that India will need to address to emerge as a healthcare tourism hub of the world:

  • Improving the infrastructure
  • Adequate training of the staff
  • Enhancement of the image of India as a corruption-free country
  • Continuous improvement of overall service to the patients

Conclusion:

While encountering the global economic meltdown many corporate business houses, even in the developed nations of the world, are under a serious cost containment pressure, which includes medical expenses for their employees. Such cost pressure has already started prompting many companies 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 growth opportunity in the healthcare tourism sector in India.

According to the ‘Medical Tourism Climate Survey 2010’ report, the leading medical tourism destinations are currently India, Thailand, Hungary and Malaysia and the leading source of patients being again the USA, UK and Russian Federation.

The survey rates Thailand, India and Singapore as the best in terms of quality of overall patients’ care. Insurance and liability issues for the patients from some major markets of the world could pose to be a challenge for speedy growth of this industry.

Countries like, Thailand, Singapore and Malaysia, located in quite closer proximity to India, will continue to offer a tough competition in the healthcare tourism space of the country.

In an increasingly heated-up fast evolving competitive scenario, the name of the game for India will be to ‘step on the gas’, sooner and effectively.

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.

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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:

  1. National Pharmaceutical Pricing Authority,
  2. Department of Industry Policy and Promotion,
  3. Indian Drug Manufacturers Association, Mumbai,
  4. Indian Pharmaceutical Alliance, Mumbai,
  5. Organization of Pharmaceutical Producers of India, Mumbai,
  6. Federation of Pharmaceutical Entrepreneurs, Gurgaon,
  7. Confederation of Indian Pharmaceutical Industry,
  8. Bulk Drug Manufacturers’ Association, Hyderabad,
  9. SME Pharma Industry Confederation, New Delhi
  10. Drug Controller General of India as the Member Secretary.

The focus areas:

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

  1. Evolving a short, medium and long-term policy and strategy to make India a hub for drug discovery, research and development.
  2. 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.
  3. 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
  4. Recommend measures to assure adequate availability of quality generic drugs at affordable prices.
  5. 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

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.

Centralization of the system of issuing ‘Certificate of Pharmaceutical Product’ (CoPP) by the DCGI is a welcome step.

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The ‘Certificate of Pharmaceutical Product’(CoPP), which is valid for two years, is issued by the drug regulatory authorities to a particular pharmaceutical product. CoPP is accepted as a proof of international quality by Latin America, Africa, CIS and other developing countries.
Why is this decision?

The decision of the Drug Controller General of India (DCGI) to centralize the issue of CoPP stems from a request to this effect made by the World Health Organization (WHO).

It has been reported that WHO in April, 2009 informed the Ministry of Health of the Government of India that the organization takes objection in using WHO logo in the CoPP by the Indian exporters of pharmaceutical products as the WHO formats and guidelines are allegedly not properly adhered to by various local issuing authorities of CoPP, in India. The DCGI indicated that WHO specifically requested India that such an important documentation procedure should be controlled at the central drug regulatory authority level and hence is this decision.

Why is the criticism?

By the states:

However, the state drug authorities have expressed their unhappiness and even challenged the power of the DCGI to effect such changes. They feel that there will be revenue loss to the states for this procedural amendment. In addition, they argue that as the manufacturing license to the exporters are issued by the state drug authorities, the CoPP also is to be issued by the same authority, which they feel is an age old practice and works quite well.

By the exporters:

So far as the exporters are concerned, they feel that with the existing inadequate infrastructure available with the Central Drugs Standard Control Organization (CDSCO), effective implementation of the new system is not possible. This change, they apprehend, would result in unusual delay in issuing the certificate.

The latest status:

On October 13, 2009, the Madras High Court issued a stay order on a petition filed by the Tamil Nadu Drug Inspectors Association, against the directive of centralization of CoPP by the DCGI.

On October 15, 2009 the same Madras High Court acting on a petition of the Federation of South Indian Pharmaceutical Manufacturers Association issued an injunction, which will remain in force until further orders, staying the same order of the DCGI.

On October 20, 2009, Karnataka High Court issued yet another stay order, which will remain effective for a period of four weeks, suspending this new directive on CoPP.

This is the third stay order against the new centralized system of granting CoPP.

Conclusion:

Many stakeholders genuinely feel that this change will help strengthening the regulatory framework of the country and improving confidence level on the high quality standard of generic drugs manufactured in India within the world trading community with a positive impact on pharmaceutical exports. This will also enable the DCGI to provide up-to-date details on CoPP to the international regulators, as and when required. In the previous system, the DCGI feels, it used to be quite challenging to quickly compile such data to respond to any national and international request for the same. In the new system there will be one uniform format and the details of all CoPP with their expiry date will be available in the CDSCO website for greater transparency.

The infrastructural issue including the manpower need of the CDSCO to handle this new initiative is being addressed with adequate speed. Overall, this is indeed a laudable move to ensure uniform high quality standard for the pharmaceutical products made in India. Ministry of Health of the Government of India should be complimented for this important initiative.

By Tapan 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.

Recent efforts to improve the functioning of the WIPO-administered Patent Cooperation Treaty (PCT) is a welcome step for the interest of India.

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As the third largest user among developing countries of the PCT system, India has a particular interest in ensuring that the PCT system supports its innovators and exporters in the most efficient manner possible.
What does PCT system do?

The PCT system allows reliance on international searches and examination in assessing patentability but it does not preclude national examination including decisions on patentability at a national level. In that regard, the Director-General Francis Gurry of WIPO made the following remarks at the opening of the WIPO Assembly on September 22, which clearly states that PCT reform is not a norm setting exercise and is voluntary:

“…I would like to make specific mention of one project, which I believe to be of great significance, the so-called Road Map for the improvement of the functioning of the Patent Cooperation Treaty (PCT), which will come up for consideration in the PCT Assembly during this meeting. This is not a norm-making exercise. The PCT makes it very clear (Article 27(5)) that nothing in it is to be construed as in any way limiting the freedom of each Contracting State to determine its own substantive conditions of patentability. Neither the PCT nor the Road Map in any way affects TRIPs flexibilities. The Road Map is about improving the functioning of a procedural treaty that links together the patent offices of the world. It is about finding ways to increase work-sharing, to decrease unnecessary inefficiencies, to improve the quality of the output of the international patent system and, thereby, to contribute to the management of the unsustainable backlog of 4.2 million unprocessed patent applications in the world. There are many initiatives occurring already in this regard: the Patent Prosecution Highway and work-sharing initiatives in ASEAN, in South America and between the Vancouver Group of Canada, United Kingdom and Australia. The PCT Road Map aims to bring all these initiatives ultimately under the multilateral umbrella of the PCT“.

PCT is not a substantive treaty:

The PCT is not a substantive treaty and it will not become one. By mixing up the different work streams of WIPO–some of which are substantive and some of which, like the PCT, are technical and administrative, some vested interests seek to create confusion. It is difficult to understand why such people would want to defeat a project that will permit Indian high-tech companies to leverage India’s strong educational and legal infrastructure to compete effectively in the global economy of the twenty-first century.

PCT has important ramifications:

The proposed changes in the PCT have indeed important ramifications for countries like India, as they represent the greater opportunities that the PCT changes will provide Indian commercial interests through an improved international patent search and examination process.

In many technological sectors, including pharmaceuticals, Indian innovators are finding that, indeed, strong intellectual property protection both in India and abroad is critical to the success of their business models. As a result they are becoming users of the PCT system. Opposition to the current WIPO efforts to improve the PCT system, I reckon, would deny Indian innovators these opportunities.

Indian innovators have a stake in WIPO PCT reform:

Indian innovators also have an important stake in “WIPO PCT Reform”. It is, therefore, very much in the interest of the Government of India that such reform succeeds now that it has reached elite status in the international intellectual property regime.

Just last year, the Indian Patent Office (IPO) became one of only fifteen national patent offices to be recognized as an International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) by WIPO. As an ISA, the Indian Patent Office now approves or establishes the title and conducts international searches. Scepticism of a group of vested interests on this much desirable “WIPO PCT Reform” could set back the international recognition that India has deservedly gained from being the only English speaking country in the Asian region to be recognized as an ISA and IPEA.

Conclusion:

I would, therefore, expect our Government to continue its support for efforts such as “WIPO PCT Reform” that seek to facilitate India’s further integration into the international economy while at the same time protecting Indian national interests.

By Tapan 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.

Patent Linkage: an important step yet to be taken by the Government of India for proper enforcement of product patents granted in the country

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The process of Patent Linkage establishes a desirable communication process between the Health Ministry and the Patent Offices to prevent marketing approval of generic drugs before expiration of patents granted in India. It also ensures that one Government Department / Ministry does not impair the efforts of another Government Department / Ministry to provide effective intellectual property protection as required by Article 28 of the WTO TRIPS Agreement.
The system of Patent Linkage exists around the world:Following are some examples:

Australia – Health Authorities do not provide marketing approval for a generic copy which would infringe an existing patent.

Brazil – As of 2006, no copies of products still under patent have been launched in the market place. However, the Brazilian Health Agency (ANVISA), grants registration to copy products, based only on the merits of the case from the regulatory point of view, whether or not a patent has been granted for the same.

Canada – Health Regulatory Authorities do not provide marketing approval for pharmaceutical products protected by patents listed in the equivalent of the US FDA Orange Book.

China – The State Food & Drugs Administration (SFDA) must be satisfied that no patent is being infringed before it will issue marketing approval. If there has been litigation over a patent, SFDA will wait until the appeals process has been exhausted before acting.

Jordan – Marketing approval for a pharmaceutical product is not permitted during the period of patent protection.

Mexico – Applicants seeking marketing approval for generic pharmaceutical products in Mexico must certify that their patent rights are not infringed. The Health Regulatory Authorities then check with the Patent Office, which must respond within ten days to confirm whether a patent is involved. While Health Authorities will accept an application of marketing approval during the patent period, grant of marketing approval will be delayed until the patent expires.

Singapore – Applicants seeking marketing approval for generic pharmaceutical products in Singapore must declare that the application does not infringe any patent.

U.A.E – The Health Regulatory Authorities do not provide marketing approval for pharmaceutical products that remain under patent protection in the country.

U.S.A – U.S. FDA maintains a listing of pharmaceutical products known as the Orange Book. The Electronic Orange Book is also available via the internet at: http://ww.fda.gov/cder/ob The U.S. FDA does not authorize the marketing approval for a generic copy of a pharmaceutical product protected by a patent listed in the Orange Book.

Europe – Instead of Patent Linkage, the period of data exclusivity is for 10/11 years.

The Patent Linkage System is in progress in countries like Bahrain, Chile, Dominican Republic – Central America FTA (DR-CAFTA), Morocco and Oman.

Some people question why should India follow Patent Linkage system in the regulatory approval process?

In India ground realities in the patent enforcement process are quite unique. Thus there is an urgent need for having a Patent Linkage system in place for the following reasons:

1. The Government is granting product patent to encourage, protect and reward innovation in India, it will not be in the best interest of the innovators if the same Government grants marketing approval for a generic equivalent of the patented molecule during the patent life of the product.

2. Unlike many other countries, the Indian Patent Law has provision for both pre-grant and post-grant oppositions. Therefore, if anyone wants to challenge the patent, enough time will be available for the same.

3. After patent is granted for a product in India, if marketing approval is given to a generic equivalent of the same molecule, a dispute or patent infringement may arise. As per the Patents Act 2005, such disputes regarding patent infringement have to be challenged in a High Court. The judicial process is a long drawn one and it is quite possible that the patent life of the concerned molecule would expire during the dispute settlement period, which in turn, would raise doubts about the sanctity of granting a product patent to an innovator in our country.

Conclusions:

I therefore submit the following recommendations to ensure proper enforcement of products patent in India:

 The status of the grant of patent should be reviewed, through appropriate drug regulatory mechanism, before granting marketing permission to generic formulations and if the concerned innovative product is already patented in India, marketing permission for the generic formulation should be withheld.

 Appropriate mechanism/system should soon be worked out in co-ordination with other Ministries to avoid cases of infringement of product patents in India.

 The procedure (Patent Linkage) of checking the patent status of a product before granting marketing approval already exists in the Form 44. This procedure needs to be implemented.

India has instances where marketing permission has been granted by the DCGI for a generic product even when a product patent already exists for the same molecule in India. Such instances put the patent holder in a hardship and avoidable litigation involving huge resources both in terms of time and money. Situation like this can be effectively avoided by ascertaining the patent status before granting marketing permission to a generic manufacturer through an appropriate drug regulatory system, as indicated above.

By Tapan 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.