Financial Daily from THE HINDU group of publications
Tuesday, Feb 03, 2004
Industry & Economy
MNC drug cos ready to swallow pill
P.T. Jyothi Datta
Mumbai , Feb. 2
WHEN an Eli Lilly employee in New Delhi logged into Indianapolis to trouble-shoot a local problem, little did he realise that the issue was in fact addressed from back home in Noida!
No more recent than last week, this experience illustrates that multinational drug companies are not just watching the rapidly evolving domestic market, but are actually venturing out there and getting their hands dirty.
MNC pharma companies have in the past been holding their horses, read investment plans, until product-patents were introduced in India. But with the country poised to honour product-patents, come January 1, 2005 - pharma industry representatives are optimistic.
Although "feel good" may be a phrase that has been done to death, they say, it is sending out the right signals, for parent companies are sitting up and taking notice.
But then again, it is unlikely that proprietary products will flood the domestic market from the cut-off date. "It may well take a good couple of more years before key patented products and major investments begin to flow in," they opine.
Even as GlaxoSmithKline Pharmaceuticals Ltd (GSKPL) is looking to increase its clinical research load in India - GSK's Managing Director, Mr Kal Sundaram, feels that the proof of the pudding is in the eating.
Putting on his "Indian hat," he observes: "If Intellectual Property Right (IPR) norms are tightened and India reinforces its commitment to innovator companies, it will lure knowledge-based companies in infotech and pharma. For the moment, companies would operate under the current dynamics until stringent regulatory processes and infrastructure are put in place to support the Patent (Third) Amendment Bill and protect IPR. There will not be many patent-protected drugs launched in India till 2007."
Mr Rajiv Gulati, Chairman and Managing Director, Eli Lilly in India, is in agreement. "There is unlikely to be a dramatic change in the current scenario, both for domestic and MNC companies. The worry of a sudden price increase is misplaced, as the existing products will continue and about 90 per cent of industry sales will be from non-patented molecules. Change will be gradual, Eli Lilly will see more activity in the next few months on the business and drug launch front - Forteo (an osteoporosis drug) and Elantra (for cancer) will be launched by middle and late 2004 respectively," he said.
Industry representatives point out that the Indianapolis-based Eli Lilly and Company has the backbone to its global systems operating out of Noida, courtesy a $25-million deal signed with TCS. Similar ventures in business-processing and clinical research are being actively explored by other MNC pharma companies, they observe.
Meanwhile, in an effort to put a lid on the scepticism regarding whether MNCs will increase their involvement with India - the Organisation of Pharmaceutical Producers of India (OPPI), a forum for MNC drug companies, has recently embarked on an exercise to put a tangible figure to business prospects that they envisage for India.
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