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For greater transparency in the relationship between physicians and the pharmaceutical companies, does India need an Act like, proposed ‘The Physician Payment Sunshine Act’ of the USA?

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As we discussed earlier, to make the pharmaceutical companies disclose and report various types of payments made to the physicians, two Senators of the United States of America, Chuck Grassley and Herb Kohl introduced a bill called ‘The Physician Payment Sunshine Act’ in January, 2009.If this bill is passed in 2010, the government will make available to the public by 2011 all types of payments made to the physicians by the pharmaceutical companies over a cumulative value of US $ 100.Items of disclosure:

Among various other heads, the following items related to the “payment made to the physicians’’ will require to be reported:

• Consulting Fees

• Compensation for services other than consulting

• Honoraria

• Gifts

• Entertainment

• Food

• Travel

• Education

• Research

• Charitable Contributions

• Royalties or licenses

• Current or prospective ownership or investment interests

• Compensation for serving as a faculty member or as a speaker for a continuing medical education program

• Grant

• Reporting will be required for compensation towards serving as faculty, or as a speaker for a CME program, and grants.

• Any other nature of the payment or other transfer of value as defined by the government

Research payments:

Pharmaceutical companies will also require reporting aggregate amounts of research payments in a specified manner.

Items exempt from disclosure:

There will be items, as mentioned below, which will be exempted from such reporting:

• Product samples

• Payments in the aggregate of less than $100

• The loan of a device for less than 90 days

• Patient education materials

• Warranty replacements (devices)

• Items for use as a patient

• Discounts and rebates

• In-kind items used in charity care

• Dividends from a publicly-traded company

Penalties for default from disclosure:

Proposed penalties have been categorized as follows:

• For unintentional failure to report: fines from US $1,000 – US $10,000 for each payment not reported with a cap of US $150,000/year

• For intentional failure to report: fines from US $10,000 – US $100,000 for each payment not reported with a cap of US $1 million/year.

World Medical Association (WMA) Statement Concerning the Relationship Between Physicians and Commercial Enterprises:

Meanwhile, WMA is also trying to address this vexing issue and coming closer to some sort of voluntary disclosure at their end, as well.

Such type of statement was first adopted by the WMA in its General Assembly at Tokyo, Japan in October 2004. Recently in its General Assembly held at New Delhi in October 2009, the statement was further amended coming closer to the disclosure of payments.
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The preamble of the amended statement articulates the following:

“In the treatment of their patients, physicians use drugs, instruments, diagnostic tools, equipment and materials developed and produced by commercial enterprises. Industry possesses resources to finance expensive research and development programmes, for which the knowledge and experience of physicians are essential. Moreover, industry support enables the furtherance of medical research, scientific conferences and continuing medical education that can be of benefit to patients and the entire health care system. The combination of financial resources and product knowledge contributed by industry and the medical knowledge possessed by physicians enables the development of new diagnostic procedures, drugs, therapies, and treatments and can lead to great advances in medicine.

However, conflicts of interest between commercial enterprises and physicians occur that can affect the care of patients and the reputation of the medical profession. The duty of the physician is to objectively evaluate what is best for the patient, while commercial enterprises are expected to bring profit to owners by selling their own products and competing for customers. Commercial considerations can affect the physician’s objectivity, especially if the physician is in any way dependent on the enterprise.

Rather than forbidding any relationships between physicians and industry, it is preferable to establish guidelines for such relationships. These guidelines must incorporate the key principles of disclosure, avoidance of obvious conflicts of interest and the physician’s clinical autonomy to act in the best interests of patients.
These guidelines should serve as the basis for the review of existing guidelines and the development of any future guidelines.”

This new statement of the WMA, having a remarkable similarity with the ‘Codes of marketing Practices’ of the pharmaceutical industry associations in India, like Organization of pharmaceutical Producers of India (OPPI) and Indian Drug Manufacturers’ Association (IDMA) is indeed a welcome step in the right direction.

Conclusion:

Along with the self regulation initiatives by both the industry and WMA, this bill, if passed, will surely and significantly improve the transparency related to the transaction between the pharmaceutical companies and the physicians to the public at large in the US to start with. However, bringing research within the ambit of this bill could possibly be a contentious issue.

Be that as it may, in India a large section of the civil society still feels that it is now high time for the Government of India to decide whether the nation needs an Act like the proposed ‘Physician Payment Sunshine Act’ of the US to bring in greater transparency in the process of various financial transactions between the pharmaceutical industry in India and the physicians, along with the continuing initiatives of self-regulations by both the industry and the physicians.

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.

Will mandatory disclosure of ‘payments to physicians’ by the pharmaceutical companies be an overall part of “Healthcare reform process” in the US and what about India?

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The brief Scenario in India:
In India over 20, 000 pharmaceutical companies of varying size and scale of operations are currently operating. It is alleged that lack of regulatory scrutiny is prompting many of these companies to adapt to ‘free-for-all’ types of aggressive sales promotion and cut-throat marketing warfare involving significant ‘wasteful’ expenditures. Such practices involve almost all types of their customer groups, excepting perhaps the ultimate consumer, the patients.

Unfortunately in India there is no single regulatory agency, which is accountable to take care of the healthcare needs of the patients and their well being.

The pharmaceutical industry of India, in general, has expressed the need to self-regulate itself effectively, in the absence of any regulatory compulsion. However, many activists groups and NGOs feel that the bottom-line in this scenario is the demonstrable transparency by the pharmaceutical companies in their dealings with various customer groups, especially the physicians.

The brief scenario in the US:

Like in India, a public debate has started since quite some time in the US, as well, on allegedly huge sum of money being paid by the pharmaceutical companies to the physicians on various items including free drug samples, professional advice, speaking in seminars, reimbursement of their traveling and entertainment expenses etc. All these, many believe, are done to adversely influence their rational prescription decisions for the patients.

As the financial relationship between the pharmaceutical companies and the physicians are getting increasingly dragged into a raging public debate, it appears that there is a good possibility of making disclosure of all such payments made to the physicians by the pharmaceutical companies mandatory by the Obama administration, as a part of the new US healthcare reform process.

As I said in my earlier article, Eli Lilly, the first pharmaceutical company to announce such disclosure voluntarily around September 2008 has already uploaded its physician payment details on its website.

US pharma major Merck has also followed suit and so are Pfizer and GSK. However, the effective date of their first disclosure details is not yet known.

In the meantime, Cleveland Clinic and the medical school of the University of Pennsylvania, US are in the process of disclosing details of payments made by the Pharmaceutical companies to their research personnel and the physicians. Similarly in the U.K the Royal College of Physicians has been recently reported to have called for a ban on gifts to the physicians and support to medical training, by the pharmaceutical companies.

Conclusion:

Currently in the US, both in Senate and the House of Congress two draft bills on ‘The Physician Payment Sunshine Act’ are pending. It appears quite likely that Obama Administration, with the help of this new law, will make the disclosure of payments to physicians by the pharmaceutical companies mandatory, along with its much discussed new healthcare reform process.

If President Obama’s administration takes such regulatory steps will Dr. Manmohan Singh government prefer to stay much behind?

I shall try to explore that emerging scenario in my next blog post.

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.

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.

A brief history of the Indian Patent System from Indian Pharmaceutical Industry perspective, the concerns and opportunities.

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Although a comprehensive Act on Patents and Designs allowing product patents of drugs came into force in India in 1911, the first Patents Act of India was enacted in 1856.This Act gave a head start to the global pharmaceutical companies in this business primarily through imports into India. As a result, in no time the global pharmaceutical companies curved out a sizeable chunk of the Indian pharmaceutical market capturing over 80% of the total domestic consumption of drugs and pharmaceuticals.It has been reported that in 1959 an American Senate Committee headed by Senator Kefauver wrote in its report:

“…in drugs, generally, India ranks amongst the highest priced nations of the world”.

In 1970 the Indian Patents Act was amended abolishing the product patent system, based on ‘Ayyangar Committee report, 1959’, which examined the factors influencing the high prices of the drugs and pharmaceuticals in India and concluded:

“.. high prices resulted from the monopoly control foreign based pharmaceutical companies exercised over the production of drugs.”

The Indian Patent Act of 1970 was, once again, amended under the TRIPS agreement and the Indian Patents Act, 2005 came into force effective January 1, 2005 , re-introducing product patents for the drugs and pharmaceuticals, as a part of the globalization process of the country including the pharmaceutical industry of India.

This is perhaps the testimony of India’s realization that research and development is the bed rock for the progress of pharmaceutical industry in any country in the long run, as this industry, unlike many other industries, relies quite heavily on product patents.

Indian Pharmaceutical Industry to build on its acquired strength:

Reverse engineering with high calibre skills in process chemistry emerged as one of the key strengths of the domestic Indian pharmaceutical industry since 1970. The industry has to build on this strength and move towards ‘incremental innovation model’ of R&D, which is less expensive and more cost effective starting with a known substance, to meet the unmet needs of the patients.

The product patent regime has given a boost to pharmaceutical R&D in India:

Many medium to large Indian pharmaceutical companies, like Ranbaxy, Dr Reddy’s Lab (DRL) and Glenmark etc. have already started shifting their focus on R&D. The large number of patent applications filed by these companies to the Indian patent offices will vindicate this point. As a result of the new focus, one observes business initiatives like, spinning off the R&D units into a separate company and many R&D driven mergers and acquisitions by these domestic Indian companies.

R&D investments are also being made in traditional chemistry based screening. Moreover, companies like Biocon, Panacea Biotech, and Bharat Biotech etc. have engaged themselves in the space of biotechnology research.

Increasing opportunity to collaborate with the global companies:

Increasingly more and more Indian companies have started collaborating with the global companies in collaborative research and cost efficient process development to leverage their human capital and infrastructural facilities. The collaborative arrangement towards this direction between GSK and Ranbaxy provides a good example.

Contract research and manufacturing:

Some other domestic companies like Divi’s Lab, Suven Pharma, Dishman Pharma, Piramal Healthcare, Shasun Chemicals, Jubilant Organosys etc. are moving into the space of contract research and manufacturing services (CRAMS) establishing world class facilities and collaborating with the global players like, GSK, Pfizer, Merck, Eli Lilly, Bayer, Sanofi Aventis, Novartis etc.

Public-Private Partnership (PPP) in R&D:

Initiatives by the Indian companies in collaborative research with government research institutes like CSIR and NIPER have already commenced, though much lesser in number. Some companies like, Shasun have already derived benefits in the field of biotechnology out of such collaborative research under PPP. It is expected that more such projects will see the light of the day in not too distant future.

Some concerns in the new regime:

Some serious concerns are being raised as the country is in the process of settling down in the new paradigm. The key concern is about the affordability of patented products by those who are currently having access to other modern medicines.

To address such concerns related to public health issues in general, there are already provisions in the TRIPS agreement for price control of patented products.

At the same time, one finds, the government has exempted those patented products from price control, which are domestically produced with indigenous R&D. Many feel that these differential measures will not help improving affordability and access to such patented medicines by the common man.

Keeping prices of essential medicines under the lens of price regulator is more important:

Even over last sixty years of independence, the access to modern medicines in India is meager 35 percent. 65 percent of the nation’s population does not have any access even to off patent essential drugs. In a country like India where there is no adequate social security cover towards healthcare, it will be important to keep the prices of essential medicines for treating common diseases under the close vigil of the drug price regulator.

Will the prices of medicines spiral in the product patent regime of India?

While addressing this question one will need to keep in mind that around 98 percent of drugs, which are generic or branded generic, manufactured in India and costs cheaper than their equivalents available even in our neighbouring countries like Pakistan, Bangladesh and Sri Lanka, will continue to remain unaffected. Hence, it is very unlikely that prices of such medicines will go up significantly because of the new product patent regime in India.

Conclusion:

The key concerns raised in the new product patent regime are that it will further deteriorate the current poor access to modern medicines to a vast majority of the population.

It is undeniable that one of the key reasons for poor access to essential medicines in India is lack of buying power of a large number of both rural and urban poor. This problem gets compounded by the poor public health infrastructure, delivery system and financing system, despite sporadic initiatives taken by the government towards this direction.

To be successful in the new regime by improving access to modern medicines to those who do not have means to satisfy such basic needs, the country should take a rational and holistic approach in this matter. It is high time for all the stakeholders to ponder and flesh-out the real factors, which have been responsible for such a dismal rate of access to modern medicines to a huge 65 percent of the country’s population over decades, even when the product patent law was not in place in the country.

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.

Will the ‘Bayer–Cipla case’ now put the ‘Bolar Provision’ under judicial scrutiny?

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To enable the domestic pharmaceutical industry gaining a critical mass and cater to the pressing healthcare needs of the nation, in 1970 product patent act was abolished by the government of India. This immensely helped the domestic companies to launch the generic version of innovative medicines at a very low price, making those drugs quite affordable to a large section of the population.
Cost and process efficiencies helped the Indian pharma companies to reach out:

Quickly acquired cost and process efficiencies of the domestic generic pharma companies soon made India a power to reckon within the global generic pharmaceutical industry. Besides fueling the domestic demand of the essential medicines in general and these drugs in particular, the domestic pharma players soon commenced exports of these cheaper but high quality medicines to non-regulated and the least developed countries of the world to cater to their affordable healthcare needs.

India played a key role in combating HIV-AIDS in Africa:

In that process, India also played a critical role to ensure that HIV-AIDS drugs are available to the poor and down trodden in Africa in general and sub-Saharan Africa in particular, at an affordable price.

A paradigm shift:

On January 1, 2005, India stepped in to a new paradigm with re-enactment of the product patent act in the country, which is widely believed to be TRIPS compliant. This consequently ushered in a transition within the Indian pharmaceutical industry from the mindset of an ‘imitator’ to the prestigious status of an ‘innovator’, which ultimately drives the wheel of progress of a nation.

The voice of concern:

At the same time and for the same paradigm shift many expressed their grave concerns about the role that the domestic generic pharmaceutical industry will play in the new paradigm to continue to make cheaper but quality modern medicines available not only to a large section of the Indian society, but also to the needy patients of non-regulated and least developed countries of the world.

TRIPS safeguard provisions:

Although minimum standards of patent protection that patent holders should get have been articulated in TRIPS, it also very clearly specifies three very important public health safeguard provisions simultaneously, which will allow any participating country to utilize these during such types of needs.

These three TRIPS public health safeguard provisions are as follows:

A. Compulsory Licensing:

- There is nothing in TRIPS, which can limit the authority of the government, in any way, to grant compulsory licensing of a patented product for public health safeguard.

B. Parallel importing:

- TRIPS clearly indicates that under WTO dispute settlement body parallel imports cannot be challenged, if there is no discrimination on the patent holders’ nationality.

AND

C. Bolar Provisions

The Bolar Provision:

To enable the generic players launching new molecules at a much cheaper price, the Patent Act 2005 provides for exceptions to the patentee’s exclusive rights under Article 30 of TRIPS, as ‘Bolar Provisions’ in its section 107A(a):

“any act of making, constructing, using, selling or importing a patented invention solely for uses reasonably related to development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product.”

This section provides an exemption from patent infringement to the generic manufacturers from producing and importing patented drugs for research and development, related to submission of information for regulatory approvals of generic versions of patented products before the original patents expire. The legislative intent of this section is to ensure that the generic versions of patented products are ready with necessary regulatory approval for market launch, immediately after the innovator products go off patent, rather than going through a long rigorous process of getting the regulatory approval only after expiration of the patent term.

Is the Section 107A now under judicial scrutiny?

This section may be unfairly used by some generic manufacturers, soon after the launch of products patented in India, for unfair commercial reasons. The final judgement on Bayer–Cipla case on Nexavar may throw some light on this important provision. It is quite possible that because of this reason Delhi High court has ordered Cipla to seek the High Court’s permission before market launch of the generic version of Bayer’s patented product.

Conclusion:

Although there is nothing wrong in using a patented molecule for getting regulatory approval with a genuine intent to launch the generic version after the original product goes off patent, it now appears that in absence of Regulatory Data Protection (RDP) both against disclosure and unfair commercial use, this section may most likely to be abused more by some generic players with mala fide commercial interest.

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.

The relevance of the Indian version of the Bayh-Dole Act – the country needs all stakeholders’ open debate on the proposed bill.

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The Bayh-Dole Act is an American legislation, which was originally sponsored by two US senators named Birch Bayh and Bob Dole. This Act deals with Intellectual Property (IP) arising out of US government funding. Bayh-Dole Act is also known as University and Small Business Patent Procedure Act. In December 12, 1980 this was enacted into a law by the US Congress.
What it does:
Under this Act, IP rights over government funded inventions for further development, license to other parties or direct commercialization are transferred to the universities and small businesses operating with government contracts. The government though retains its right to license the invention to any third party without any consent from the IP right owner or the licensee, if it feels that on a reasonable basis the public is being denied of the benefits of the invention.

The Indian version of the Bayh-Dole Act:

The Utilization of the Public Funded Intellectual Property Bill 2008, which has been formulated in line with the US Bayh-Dole Act, has already been approved by the Union Cabinet of India. This bill ensures both utilization and protection of the IP arising out of government funded research initiatives. Currently government funded academic institutions and research institutes cannot commercialize the inventions.

The proposed bill will not only allow them to patent such inventions but will also reward the inventors and the institutes with a share of its commercialization proceeds as per specific guidelines.
The bill has attracted a mixed response from the stake holders.

The relevance of Bayh-Dole Act in India:

Relevance of Indian version of the Bayh-Doll Bill in the post product patent regime in India is
significant. The core concept of the bill encourages innovation and ensures protection of patents and other forms of IP rights of the government funded R&D outcomes, where the owner of the intellectual property will be the government grant receipients or the government.

This bill is expected to offer to various research institutions, universities, small businesses and non-profit organizations, the IP rights on their inventions, resulted from the government funding. Overall environment towards innovation within the country is expected to get a boost in that process.

Is the ownership and protection of R&D a real remedy to make government academic institutions and universities self sustainable?

This is certainly not the only remedy, but an important one. This process will have significant potential to effectively facilitate technology transfer from government funded research laboratories or universities to the user industry to make these establishments self-sustainable.

What are the main implications of the bill if enacted in its current form?

Although the fine prints of the bill are not yet clearly known, the bill in its current form raises more questions than answers. Some of the concerns with the bill in its current form are as follows:

- This law could effectively transfer the decision making process about
publications of the research papers from the researchers and academia to
the bureaucrats in the government establishments, making the R&D
environment quite stifling for the researchers and the initiative
counterproductive.

- Academia at times will be compelled to incur significant expenditures
towards different types of IPR related litigation, which could have been
otherwise productively spent by these institutions towards research
initiatives.

- The learning and research may get transformed into another kind of
businesses activity, as such a law could change the research focus on to
the issues, which will be of greater commercial interest to various
industries and will offer immediate financial benefits to the
institutions. As a result vital non-commercial research, which could be of
critical interest to the nation as such, may take a back seat.

Conclusion:

The country will therefore need an extensive public debate on this bill, which has not taken place, as yet. The loose knots of the bill need to be tightened and the concerns of the stakeholders need to be adequately addressed before its enactment into a law.

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.

How have the ‘Drug Policies’ of India fared against the set objectives?

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Indian Pharmaceutical Industry has by now established itself as one of the most important knowledge based industry of the nation with significant sets of differential advantages. It has earned global recognition as a low cost producer and global supplier of generic drugs. The domestic industry today meets almost the entire demand for pharmaceutical products of the country. This happened, as many would consider, primarily due to the pragmatic decision of the government to abolish the product patent during the growth stage of the Indian pharmaceutical industry, in the early 70’s.
In global perspective India is still a small market in terms of value turnover:

Having achieved all these, one should keep in mind that despite being the second largest country in terms of population, domestic Indian pharmaceutical market recorded a turnover of just U.S$ 7.8 billion in 2008, which is significantly lower than any smaller country of the developed world.

This is primarily because India is a low priced generic pharmaceuticals market. McKinsey forecasts that by 2015 the industry will record a turnover of U.S$ 20 billion. The key drivers of growth are forecasted to be the following:

1. Overall rising income level, particularly of the middle class.

2. Increase in life-style related diseases.

3. Change in demographic pattern with increase in life expectancy.

4. Greater penetration in the rural markets.

5. Increasing penetration of health insurance.

6. Increase in government expenditure towards healthcare.

A quick snapshot of ‘Drug Policy’ changes:

With the initiation of globalization process in 1991, many significant steps have been taken by the government for the pharmaceutical industry of India.

Along with reduction in the span of price control of drugs, reservation of some drugs for the public sector was withdrawn and private sector was allowed to manufacture all types of drugs. Although industrial licensing for pharmaceuticals was abolished, for bulk drugs the system is still in force. Foreign investments through automatic route was first raised to 74 percent and then to 100 percent.

The product patent regime with the introduction of the Patents Act 2005 ushered in a paradigm shift in the pharmaceutical landscape of India. Almost simultaneously, on in-house research and development, the facility of weighted deduction of 150 percent (though inadequate) to cover expenditure towards R&D, patent filing, regulatory approvals and clinical trials was a welcome step. These steps, howsoever good, were considered to be not good enough by a large section within the pharmaceutical industry of India.

The need for some more key changes:

The reform initiatives as enunciated in the successive drug policies were considered by the pharmaceutical industry as far from satisfactory. In the era of globalization, where market forces play a dominant role to control prices including of essential commodities like, food grains, the rigors of stringent price control on pharmaceuticals need to have a relook urgently. This was re-inforced even in the ‘National Economic Survey Report of 2009′.

Moreover, considering the new product patent regime is well in place since January 2005, to foster and encourage innovation within the country, there is an immediate need to take robust fiscal measures and offer attractive financial incentives for indigenous pharmaceutical R&D initiatives.

Simultaneous reform measures are warranted in the health insurance sector:

It is worth mentioning, effective penetration of health insurance being one of the key growth drivers of the Indian pharmaceutical industry, adequate and immediate reform measures in this area is necessary to respond to the need of a robust healthcare financing model for all strata of the society. This should work in tandem with the new drug policy measures.

The health insurance sector is growing, but not to the extent that it should. Health insurance premiums had grown to around U.S$ 800 million as on 2007 and are expected to reach around U.S$ 4.5 billion by 2013. Entry of more private health insurance players along with a reformed health insurance regulatory policy, is expected to expedite the growth rate of this important sector further.

Achievements against each key objective areas of the drug policy, thus far:

In the Drug Policy 1986 the basic objectives of policies relating to drugs were clearly enunciated. But the question is: have the objectives of the successive drug policies yielded the desirable outcome? Let us have a reality check as follows:

1. Objective: To ensure abundant availability of medicines at reasonable price and quality for mass consumption.

Reality: 65 percent of the population of the country still do not have access to modern medicines

2. Objective: To strengthen the domestic capability for cost effective, quality production and exports of pharmaceuticals by reducing trade barriers in the pharmaceutical sector.

Reality: The country has been able to make good progress in this area.

3. Objective: To strengthen the system of quality control over drug and pharmaceutical production and distribution.

Reality: The quality of all medicines produced in the country against valid manufacturing license still raises a big concern. Even the government of India while purchasing medicines for its own ‘Jan Ausadhi’ outlets, restricts purchases of medicines only upto a certain category of pharmaceutical manufacturers, for product quality reasons.

4. Objective: To encourage R&D in the pharmaceutical industry in a manner compatible with the country’s need and with particular focus on diseases endemic or relevant to India by creating conducive environment.

Reality: Nothing worth mentioning has been done in this area.

5. Objective: To create an incentive framework for the pharmaceutical industry, which promotes new investment into the industry and encourage introduction of new technology and new drugs?

Reality: Again nothing significant has been done by the government in this area.

Conclusion:

The role and objectives of the drug policy should help accelerating the all-round inclusive growth of the Indian pharmaceutical industry and make it a force to reckon with in the global pharmaceutical industry. The drug policy is surely not formulated only to implement rigorous price control of drugs. The policy formulates other key objectives to contribute significantly towards achieving the healthcare objectives of the nation, working closely with other related ministries of the government.

Unfortunately, it has not been able to keep pace with the globalization process of the country as compared to the other industries, also dealing with the essential commodities. The amended Indian Patents Act came into force in India in 2005. The drug policy of India, for various reasons, has not been able to articulate, as yet, specific measures to encourage innovation, giving a new thrust to the pharmaceutical R&D space of the nation.

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.