(Refiles to fix date line)
(The author is a Reuters Breakingviews columnist. The
opinions expressed are her own)
By Katrina Hamlin
HONG KONG, June 25 (Reuters Breakingviews) - U.S. drug
giants are once again pushing for stronger patent protection in
India. Their arguments may be transparently self-serving - but
there are still good reasons for India to take note.
Recent rulings by India's Supreme Court have allowed generic
drug makers to make and sell versions of branded drugs invented
by the likes of Pfizer, Novartis and Bayer
, even though they remain under patent in other
countries. For now, those decisions are in India's interest.
Only 25 percent of the country's 1.2 billion people have health
insurance and there is little public healthcare. Generic drugs
are cheaper and make medication more affordable. Moreover,
domestic pharmaceutical companies are less dependent than
Western rivals on developing new medications.
Big pharma companies are understandably alarmed. They have
set their sights on a lucrative future in India. The country
spent $14.3 billion on pharmaceuticals in 2011 according to IMS
Health, and Reuters reports that the market is growing as
quickly as 14 percent a year.
Contagion is another threat: the worry is that India's
cavalier approach to intellectual property may catch on in other
parts of the developing world, the industry's main source of
growth. Argentina and the Philippines have taken steps to
restrict patents, while Thailand and Brazil already use
compulsory licensing. Pharma companies are reluctant to reduce
prices in developing countries for fear of encouraging a grey
market in drugs. Doing so could also make it harder to charge
higher prices in other markets.
All this comes as the industry is under pressure to fund
more research and development to invent the next generation of
drugs. The product pipeline is drying up - researcher
EvaluatePharma estimates that drugs with combined annual sales
of $225 billion will see patents expire between 2011 and 2016.
India's recent rulings could also backfire. If their
concerns are not addressed, companies could choose to skip the
country the next time a new drug is brought to market. In the
long run, greater protection of intellectual property would also
benefit the domestic industry. India's top spenders on R&D
invested 35.1 percent more in 2012 than in the previous year,
according to a recent EU survey. Half of these were pharma
India's health needs are undeniably critical, but
compromising patent protection is not the cure.
- U.S. Secretary of State John Kerry arrived in India on
June 23 to co-chair the 4th India-US Strategic Dialogue.
- A coalition of U.S. lawmakers and business groups outlined
concerns about Indian policies as a threat to American exports,
jobs and innovation in a letter to President Barack Obama on
June 18. Among the business groups were the Pharmaceutical
Research and Manufacturers of America and the Biotechnology
Industry Association. On June 14, the top Democrat and
Republican on the Senate Finance Committee urged that Kerry
raise trade concerns on his visit.
- India's Supreme Court on May 1 dismissed attempts by Swiss
drugmaker Novartis to secure patent protection for a form of the
cancer drug Glevic. The court ruled that the drug did not
warrant a new patent as it was not sufficiently different from a
- An Indian patent appeals board upheld on March 4 a
decision to issue a compulsory license allowing a domestic
company to sell a generic version of German company Bayer's
cancer drug Nexavar. The court based the ruling on the WTO's
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
agreement, which lets countries issue such compulsory licenses
providing certain conditions are met.
- India's patent office revoked a patent for U.S. group
Pfizer's cancer drug Sutent in September 2012.
- Emerging markets accounted for around 20 percent of global
spending on medicines in 2011, and that figure could jump to 30
percent by 2016, according to IMS Health.
- Reuters: U.S. lawmakers, businesses demand Indian trade
- The 2012 EU Industrial R&D Investment Scoreboard: here
(Editing by Peter Thal Larsen and Robyn Mak)