The Hindu Business Line : MNC drug cos patently unhappy with new regime

HOW does it feel to put in the effort but have someone else partake of the fruits of that labour? MNC drug companies operating in the country say that the recently passed Patents Bill allows just that - as generic drug companies will now be able to make a drug, despite it being under a patent, provided it pays a royalty to the innovator company.

Several MNCs including Eli Lilly and Pfizer were planning to launch their patented products in India once product patents were ensured.

A product patent makes sure that no other me-too drugs can get into the market until the original drug lives out its 20 years of patent life.

The Patents (Amendment) Bill 2005 changes all that and some global drug majors poised to market their product in India are patently unhappy.

"It is a mockery of the mail-box provision. The country has lost credibility, virtually overnight, as the patent law is now seen to be weak," said Mr Kewal Handa, Executive Director (Finance), Pfizer.

The mail-box provision was a transitional arrangement that the Government had in place in the 10 years leading to January 2005, from when India was to go product patent-compliant.

Drug companies mailed their patent applications to the Patent Controller and the box was to be opened after the new law was passed.

There are about 8,000-odd applications in the mail-box and Pfizer is reported to be one of the largest filers.

Eli Lilly is the other company immediately confronted with these issues, as its drug for erectile dysfunction, Cialis, already has numerous clones in the Indian market.

Novartis's cancer drug, Glivec, is currently mired in litigation.

"It (the Bill) just condones the theft (of intellectual property)! We don't want the royalty, we want our right," says the chief of another global drug company.

Taking the argument further, a pharma analyst says that it is still unclear whether an innovative company gives the licence to manufacture to only one company.

"Will that not perpetuate the price cartel? If there are 10 copies of a medicine in the market, do all 10 pay royalties? Or will the innovator company give licence to only one company and get the Courts to restrain the other nine from making the drug?"

While more clarity is awaited on how much royalty is "reasonable", pharma industry experts say that there are international precedents and royalties will be pegged at about four per cent. "The idea is to keep drugs affordable."

But that may not be reasonable enough for a global company looking into the Indian market, says an MNC representative.

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