Pharma146;s in the den

And many more drugs wait to be discovered in the best-of-class labs that India now boasts of. These could well cough up the world8217;s answers to tuberculosis, malaria and diabetes; or even AIDS, cancer and hepatitis.

As an Indian-origin MNC, Ranbaxy can8217;t help but be upbeat. By 2012, it wants 40 per cent of revenues to come from proprietary prescription products. In anticipation, it is stepping up research and development R038;D by one per cent every year.

Ranbaxy8217;s labs sloshed about with seven per cent of the company8217;s turnover in 2004. They will get around 10 per cent of revenues by 2007. 8216;8216;By the time we get to

2007, two-thirds of our R038;D expenditure will be on Ranbaxy8217;s own brands and one-third on generics. Only three years ago, the situation was reverse: two-thirds of R038;D went into generics and one-third into proprietary research,8217;8217; says Adige.

But by the time the rest of the pharma industry ploughs itself into 2007, the business as we know it would have transformed. Post-2005, what analysts call 8216;8216;structural changes8217;8217; will start settling in. Little Pharma likes to refer to that period as a 8216;8216;shakeout8217;8217;.

A three-tier pharma industry is expected to start taking shape:

8226;top-bracket firms heavily engaged with research,
8226;middle-rung generics firms with their late chance to jump the R038;D bandwagon,
8226;third-rung contract suppliers.

8216;8216;In 2005, all the hard work we put in over the last 10 years will show results,8217;8217; says Rajesh Jain, joint MD of Panacea Biotech. 8216;8216;We sensed product patents would be accepted in India back in 1993. By 1995, we had an R038;D lab. We concentrated on our core competency: biotech and healthcare management. By next June, we8217;ll have a fourth R038;D lab,8217;8217; boasts Jain.

Panacea also has several successful international R038;D tie-ups that are raring to go.

On voices that ask for India to wait 10 years, until smaller firms get set for the big patents race, Jain says, 8216;8216;India has already spent the 10 years since 1995 in preparation. Even another 10 years later, there will remain things to discuss and wait for.8217;8217;

BUT what is business sense for some is plain suicide for others. The loudest, strongest voice of opposition to the 2005 deadline comes from within Big Pharma. For months, Yusuf Hamied, chairman of home-grown pharma multinational Cipla, has been saying,

8216;8216;I don8217;t understand why the Indian government is giving such step-motherly treatment to Indian pharma companies.8217;8217;

An agitated Hamied now says, 8216;8216;By not using the 10-year window under the WTO agreement, we are not giving any transition time to Indian companies.8217;8217;

Hamied, already labelled an 8216;8216;idealist8217;8217;, wants all patents to be refiled, greenfielding to stop and automatic compulsory licensing 8212; a system by which poorer nations can import generic versions of proprietary drugs in emergencies.

India8217;s commitment in 1994 to 8216;8216;introduce8217;8217; product patents by January 1, 2005, Hamied believes, means that product patents should be granted for applications 8216;8216;filed8217;8217; here after 2005 8212; and not after 1995.

8216;8216;We are scientists and not lawyers, to anticipate such legal nuances with great implications,8217;8217; he says.

CIPLA, which single-handedly had global prices of anti-retrovirals in plainspeak: AIDS drugs plumetting, also says only basic molecules should be eligible for patents. Besides, its chairman adds, if patents work only when molecules are locally produced, 8216;8216;Then we could have some kind of control over its pricing.8217;8217;

Appealing to the government for an automatic compulsory licensing system with a suitable royalty clause, Hamied says, 8216;8216;We will pay a four per cent royalty on net sales of the drug to the innovators.8217;8217;Will the government go with this therapy?