Pharma pops the patent pill

With drugs worth $30 billion in annual sales going off-patent worldwide during 1999-2005, pharma analysts believe there is still good reason to cheer. ‘‘India exported 30 per cent of its pharmaceuticals, or drugs worth $2.15 billion in FY 2003, despite a late start in the 1980s. Today, all the players are ready for the product patents regime,’’ says a FICCI analyst.

Indeed, drugs made in India now treat cardiac, TB, cancer, diabetes ailments and AIDS the world over. By 2003, the bulk drug output was $1.30 billion and that of formulations $4.95 billion. In 2003, India became one of the top five producers of bulk drugs worldwide.

But success is proving a bitter pill to swallow. Many domestic pharma companies are now worried that changes to the Indian Patents Act, some of them necessary to comply with WTO regulations, will favour multinationals making drugs in India.

‘‘There must be a level-playing field for Indian players,’’ says D.G. Shah of the Indian Pharmaceutical Alliance, representing the biggest Indian drugmakers, adding, ‘‘or drugmaking will shift to one of the 59 least developed countries that will adopt product patent rules in 2016, such as Bangladesh or Nepal.’’

Last week’s ordinance, saying India accepts WTO rules on product patents starting 2005, does not assure drugmakers that greenfielding, a means to keep off-patent drugs in the market by introducing newer versions, will be prevented. Or that firms will have a hearing before the patents authority while challenging rival applications.

Besides, with MNCs still worried over Compulsory Licensing norms, the attention is away from chances that drugs will become costlier next year. ‘‘Compulsory licencing is acceptable as long as drugs are exported in emergencies to nations that don’t have drug manufacturing capacity. It should not become a commercial tool,’’ says A.S. Krishna, Director, corporate affairs, Pfizer Ltd.

But despite the opposition to ‘‘unfriendly’’ provisions, drug exports from India grew 30 per cent in FY 2003. The industry is valued at $5 billion — roughly 1.6 per cent of the world market. Today, the global output of Indian industry is fourth in volume-terms and 13th in value-terms. The only depressant, it seems, is the long wait to March, when the Left and opposition get to discuss the Patents Amendment bill.

‘‘We are waiting for a formal notification and rules. But till then, not much is likely to move in pharma,’’ sas Rajesh Jain of Panacea Biotech.