The Hindu Business Line : FDI in biotechnology — Patent regime implementation holds the key

INDIA has begun hardselling itself as a destination for investments in the field of biotech but much will depend on how the patent regime back home is implemented, according to industry officials.

At BIO 2005, the international annual convention of the Biotechnology Industry Organisation, India had a strong presence of over 50 delegates brought by CII.

The biotech firms took a space of 1,000 sq m at the exhibition held at the venue of the convention. "It is pretty costly to just take part in the convention. And to take part in the exhibition means that companies and organisations have spent quite a lot," said an official connected with the convention.

"There is no doubt that India is a destination to be looked at in terms of investments in biotech. But there are other issues, particularly patent, that hold the key," said Dr Robert B. Chess, Chairman, Bio-ventures for Global Health.

"India and China can be destinations for production of bulk drugs, especially vaccines for neglected diseases. One way can be through joint sharing of patents," said Ms Kiran Mazumdar Shaw, Managing Director, Biocon.

According to a CII official, it is the third year that Indian firms are taking part in the annual convention and their presence is increasing in view of the interest shown by foreign investors.

The convention drew over a thousand global firms that are involved in the field of biotech and at least 18,000 participants from all over the world.

The CII official said that foreign firms were ready to operate facilities in India and were looking for clusters with human resources to cut manufacturing costs.

At the convention, foreign investors showed interest in the three biotech parks coming up at Hyderabad, Pune, and Bangalore.

"A US firm has decided to come to the technology park in Hyderabad and things are being finalised," said an Indian participant at the convention, on condition of anonymity.

One advantage India has is that the current good manufacturing practices (CGMP) were excellent in some firms.

"It is one of the reasons for the interest towards India but the firms will have to continuously upgrade their facilities. Also, they will have to take their partners into full confidence on matters of delay in projects, etc., which are seen as ticklish issues," said an official of a US-based chemical firm.

CGMP is a benchmark on which the US Food and Drug Administration ranks a firm's ability. Such tests are carried out in India too by the FDA.

"Investors are ready to come to India but red-tapism is hurting. Officials in New Delhi do not understand certain things and this takes time," said the chief of a Bangalore-based agro biotech firm.

According to the CII official, interest in India has increased after the patent regime came into force from January 1. But some industry officials and experts said that everything depends on implementation.

"We will have to see how India implements the patent regimes and provides protection to firms that have got patents," said Dr Thani Jambulingam, Head of Pharmaceutical Marketing at St Joseph's University in Philadelphia.

According to Mr Utkarsh Palnitkar, Partner, Ernst & Young India, talent is available in abundance in India and there has been a shift in perception about the country.

"The model of partnering where patent could be shared is one thing that can be looked at seriously."

But hopes of attracting investments in the sector are bright as the Government envisages 100 per cent FDI in the field of biotech.

"There could be more collaborations once the Government demonstrates that it is serious about enforcing patent laws," said Mr Palnitkar.

IT-related biotech, pharmaceuticals, and enzymes are areas that could attract investments.

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