Clarity on IPR will help fuel innovation

With the announcement of the much-awaited national pharmaceuticals pricing policy, Ranjit Shahani expects 2013 to be a more eventful year for the Indian pharma industry. He shares his outlook for the sector in an interview with Shruti Verma Khare. Excerpts:

What does future of Indian pharmaceutical industry look like?

2012 was a challenging year for the pharmaceutical industry in India with the first compulsory licence being issued for a pharmaceutical product, followed by the revocation of some patents granted, and then the announcement of the much-awaited national pharmaceuticals pricing policy. Hopefully, 2013 will be more eventful but in a positive way. The industry will grow at a healthy double-digit rate between 13 per cent and 15 per cent per annum, given the fact that two-third of the population does not have access to modern medicine there is ample scope for expansion and growth.

Universal healthcare access could gain momentum with 2014 being an election year and the Organisation of Pharmaceutical Producers of India (OPPI) looks to partner with government in its endeavours in this direction. We look forward to more clarity on intellectual property rights so that we have an environment that is conducive to innovation in the pharma industry. Further, we can expect to see an increasing alignment of regulatory requirements with global best practices in the areas of marketing and clinical trial guidelines.

Is there a pressure on margins (especially generics) due to increased competition and so many players fighting to grab a bigger share of the market pie?

With the introduction of the new pharma policy, the pressure on margins will continue and Pharma companies will have to find innovative methods of cost management to give fair return to shareholders.

Is the industry worried about the fact that the USFDA’s rules are now getting tightened on Indian pharma? How should Indian companies cope?

The tightening of USFDA norms, globally, is adding costs and delays to innovative pharma drugs and a right balance needs to be struck here so that patients do not lose out in the final analysis.

Is there an ambiguity in the Indian patent laws? Do you feel that laws are too strict in India? Is it good or bad for the industry?

Innovation is fuelled by patents, and patents are the lifeline for discovering drugs for unmet medical needs. It is, therefore, very clear that unless the investments in research give a fair return to the shareholder, no resources will flow into R&D. India, like many other developing countries has the challenge of having two markets within one country. At one end, the patients need total support in healthcare where not only medicine is concerned, but also hospitalisation and doctor’s fees are an issue. But, on the other hand, you have a large segment of population who can afford world-class healthcare. Therefore, creative models, including cross subsidy, can provide a solution for encouraging patents and innovation and access to life saving drugs.

What are the implications of the verdict in Glivec patent case for Novartis in India?

The hearing of the special leave petition filed by Novartis before the Supreme Court regarding the Glivec patent concluded last Tuesday. Novartis deeply appreciates the opportunity to present the case before the apex court and will look forward to the outcome. Novartis pursued the litigation with a view to seek clarity on the unique aspects of India’s patent law and to foster an innovative environment to the benefit of patients. The verdict and the timing of its ruling are entirely at the discretion of the court. We expect to have a decision sometime before the end of Q1 of 2013.

What are the challenges for the pharma industry going forward?

Some of the key challenges faced by the pharma industry are the absence of an environment which encourages innovation, regulatory practices which are laboriously slow and the presence of counterfeit medicines in the market.

What is your spend on R&D with respect to sales? Where do see that going moving forward?

R&D centres are set up after much thought. No global company has an R&D centre in India and that does not seem to be on the horizon given the current IPR landscape in the country.


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