The Hindu Business Line :

To optimise the outsourcing opportunity and to bite into a big pie of the global opportunity, Indian industry needs leverage in the form of Data Protection.

Consultancy firm Frost & Sullivan estimates that the global pharmaceutical research and development outsourcing market will touch $24.9 billion by 2007. Ever-increasing R&D costs are compelling global pharma companies to outsource tolow-cost destinations such as India, provided there is sufficient IPR protection. Estimates are that R&D outsourcing can bring down the drug development cost by about 35 per cent and also reduce the time to market.

Pharma outsourcing exponential

But even larger than R&D outsourcing is the pharma manufacturing outsourcing market. This is expected to grow exponentially as pharma biggies bank on outsourcing to set up efficient networks across the globe. This helps them reduce costs, minimise investment in capital-intensive manufacturing facilities and focus on core competencies thereby giving the bottomline a booster shot.

With the highest number of US Food and Drugs Administration-approved manufacturing plants outside the US, India has the potential to become the manufacturing hub of the world for patented drugs. A low-cost destination for both research and manufacturing, India can benefit the end-user in terms of reduced medicine cost.

The projected boom in the outsourcing market in the WTO patent regime has energised the Indian pharmaceutical and contract research industry in a big way. To optimise the outsourcing opportunity and get a larger bit of the global opportunity pie, Indian industry needs leverage in the form of data protection.

This could break the psychological barrier of pharmaceutical players abroad and translate into access for Indian researchers into higher levels. India would also benefit from enhanced international institutional funding for R&D. Indian industry has also demonstrated capability in new patented drugs and this means new molecules are vying for data protection norms.

Article 39.3 of TRIPS (Trade-Related aspects of Intellectual Property Rights) talks about protection against unfair commercial use for only "New Chemical Entities (NCE)," where the definition of both unfair commercial use and NCE are the discretion of WTO member-countries. The Article does not advocate protection for data already in the public domain. Before granting protection, regulators can ask applicants to prove that the data for which protection is sought are the result of `considerable effort". The flexibility to revoke protection in public interest is clearly mentioned in Article 39.3.

The Article entitles member-countries to fully explore and exploit the advantages in an Intellectual Property-driven regime. India's concerns and apprehensions can be successfully addressed within the scope of this Article , while moving to a global regime to tap emerging opportunities.

To get returns on investment to fund research, R&D-intensive pharmaceutical companies require protection for a specified period up to five years within the patent life. During the period of protection and non-reliance, competitors should not be allowed to use research data submitted by the innovator.

India should restrict data protection to such drugs that are introduced in India within one year of the first marketing approval anywhere in the world. This would mean the data protection period will end well before patent expiry.

The interest of the Indian pharmaceutical industry that is thriving on generics and the public health interest, would be protected by this step. This would also hasten new drug introductions in India expanding the basket of newer available therapies at a par with the developed world. As a precaution, the data protection period should not go beyond patent life and India may include provisions for revoking data protection norms in the interest of public health when needed. Saying yes to data protection, with safeguards in place, could well mean "dollar rain" in India and more affordable medicines.

(The author is Chief Manager with Nicholas Piramal (I) Ltd., and can be reached at jaymenon2002@gmail.com The views expressed are personal.)