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`Indian pharma cos should be wary on patents'

Aparna Krishnan

MUMBAI, July 1

THE Indian Drug Manufacturers' Association (IDMA) has been at the forefront in voicing the woes of the domestic pharmaceutical manufacturers. This is at a time when the industry has been going through a critical phase with the deadline for the implement ation of the World Trade Organisation and TRIPS agreement guidelines drawing near.

Business Line spoke to Mr Nihchal Israni, President of the Indian Drug Manufacturers' Association (IDMA), on the perils that the domestic drug makers faces today. Excerpts.

What role has IDMA played in preparing the industry on World Trade Organisation and patent laws?

The IDMA has two roles to play in this regard. One to educate member-companies on the guidelines of the World Trade Organisation and the provisions of the TRIPS agreement. Two, our role, vis-a-vis the Government's initiatives on it. WTO agreements, when converted into local laws and regulations, should be done in a considerate manner taking into account the problems of the local industry.

Our view submitted to the joint select council has been that the law should be balanced, reasonable and in the interest of public health. In the TRIPS agreement, the clauses pertaining to public interest should be operationalised properly along with the obligations of the patent holder. The patent holder must use the patent rights with a conscience.

What is the status of the patents Bill? When will it be implemented?

The patents Bill is currently with the joint select committee. From there it would go to Parliament where the Bill would be introduced and passed. I do not expect the guidelines to be in place before January 2005.

What has been IDMA role in curbing spurious drug activity?

IDMA is taking care to see that the products are made of superior quality ingredients. Making spurious drugs is a criminal activity. The racket mostly exists in States that have a weak law enforcement system mainly involving the food and drug administrat ion officials in connivance with the police and dealers.

What is the percentage of spurious drugs in India?

The percentage of spurious drugs in the market various from State to State. The World Health Organisation has put the figure at 25 per cent. The northern States such as Bihar, Uttar Pradesh and West Bengal have a high incidence of spurious drugs activity .

What is the answer to the problem?

The answer to this problem lies in three directions. First, the Government should revamp its law enforcement agencies. The law per se is good, but law enforcement is poor.

Second, industry must also do its part in upgrading the packaging and developing devices so that it cannot be copied. As far as decontrolled products are concerned, the industry is doing everything possible. Where the products are controlled, the Governm ent does not provide any incentive, not even the cost of the crude packaging materials which in my opinion is not a very sound approach. Extra packaging costs must be provided by the Government atleast in controlled drugs. Third is consumer awareness and IDMA is trying to create public awareness on every platform.

What is your view on the trademark issues that seem to plague the industry lately?

The recent problems involving Pfizer Inc and Cadila have cropped up due to allegations of copying of Pfizer's product in appearance and partially in packaging. Of course, Pfizer is trying to put pressure to protect its brand and market share.

Basically, the objective of this whole exercise is commercial. It stems from the fact that Pfizer is not able to get into the erectile dysfunction market due to low prices of the Indian company's products.

Indian companies have to realise and take note that everytime they take a patented molecule, they must be extra cautious as the multinationals are very powerful and have tremendous resources which they can deploy to create trouble. That caution is lackin g in Indian companies.

Do you expect many more cases of this nature to come up once product patent laws are implemented?

Yes, I think it will increase. Pfizer has sent a signal that it is not going to take things lying down. MNCs will do their best to create trouble for Indian companies. Therefore, companies should be careful in doing what they are, in a legitimate manner. When intellectual property rights take effect, India will be become another US, a hotbed for legal actions.

The recent dual between the chemists and an Indian company over payments has brought the fragile relationship between the two in focus. Has IDMA been successful in defusing the tension?

Very much so, though the dispute is still on. Well, chemists are an extension of our industry. There has always been good relationship between the chemists and the manufacturing industry. But from time to time, some issues do come up.

For mutual benefit, lot of trade practices are institutionalised between the traders and the manufacturing industry. Lately, there have been some misunderstandings. Some wrong actions taken by the trade and some by the manufacturers.

In this particular case, the matter should have been referred to an authority that has been specifically set up for mediating between the two industries. The chemists resorted to pressure tactics which is not right.

What is IDMA's stance on the foreign direct investment (FDI) being raised up to 100 per cent?

IDMA is not against raising the FDI limit. Our viewpoint is that when you bring in foreign investment up to 100 per cent, make sure that the investment that will bring tremendous benefit to a foreign corporation does not drain our foreign exchange reserv es in terms of repatriation of high dividends.

Foreign companies must bring something in return as well that is beneficial for the country before they begin to take the fruits out. The industry does not require foreign investment. We do not expect the policy to be changed. But everytime a case comes up, our views will have to be taken into consideration.

Pic.: Mr Nihchal Israni, President, Indian Drug Manufacturers' Association.

Picture by Shashi Ashiwal