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Pharma industry's mixed view
Anthrax antibiotic Ciproxin Ciprofloxacin, manufactured by German pharmaceutical company Bayer AG, is pictured in a London pharmacy. The U. S. is talking to German drugmaker Bayer AG about relaxing its patent on Cipro, which has become the drug of choice for those worried about anthrax, Health and Human Services Secretary Tommy Thompson said — Reuters
THE INDIAN pharmaceutical industry has a mixed view of what the Doha Declaration on TRIPS and Public Health will mean for production of medicines patented elsewhere in the world. Members and spokespersons of what is considered the most vibrant generic and low-cost pharma industry in the world are not uniformly sanguine about the new declaration being more flexible on patents.
Mr. D. G. Shah, secretary general, Indian Pharmaceutical Alliance (IPA), said, ``There is now some assurance to Third World countries that if they resort to issuing compulsory licences (CLs) to their drug companies to produce patented medicines, they would not be taken to the Disputes Settlement Body (DSB) of the WTO. It reiterates the right of WTO members to CL.''
Also, ``access to medicines for all' is now a ground to grant CLs and it covers any disease and it has been left to the discretion of the country concerned. ``India will be the first choice for Third World countries once the declaration is formalised as quality is assured and prices are attractive. It is now important for the Indian government, the pharmaceutical industry and the Third World countries work together to tackle issues and create awareness and pressure.'' said Mr. Shah.
The industry would be a beneficiary as Indian companies make generics (unbranded formulations) that are significantly less expensive than patented drugs produced in developed markets. Indian companies have successfully `reverse engineered' molecules by adapting a new process to make the same drugs, acquired a process patent and then sold the generic forms at lower prices. But to take advantage of the new declaration, the Government has to first pass legislation permitting issue of CLs.
Dr. B. K. Raizada, senior vice president, Ranbaxy Laboratories, said, ``It is a positive development that in TRIPS, a public health crisis has been included as an exception for granting compulsory license (CL). Individual countries are now free to determine when and where they should grant a CL and for which disease. In the longer term, it means additional business for Indian pharmaceutical companies but in the shorter term, it means nothing.''
Regarding TRIPS, developing countries had asked for legally binding interpretations of the agreement including a solution to the most obvious problem with TRIPS Article 31.f. limitations on exports of medicines manufactured under CL. Under this clause, any authorised exception should be ``predominantly for the supply of the domestic market.'' This means that if the Government of India issues a CL on a patented drug to an Indian firm, it cannot export the larger part of its production to, say, a small least developed country (LDC). This issue is important for, any freedom to a small LDC to issue CLs is meaningless if it does not have the necessary manufacturing capacity.
Few LDCs have capabilities to manufacture these drugs for the treatment of epidemic/pandemic diseases like AIDS. But the deal also does not allow them to import these drugs from the few developing countries that can manufacture generic drugs like India and Brazil.
Only six countries are believed to have technological and innovative capabilities to manufacture generic equivalents of patented new chemical entities (NCE) like the anti-retrovirals used for HIV/AIDS treatment. The countries are Argentina, Brazil, China, India, Mexico and Korea.
To take advantage of the new presumed flexibility in TRIPS an LDC must be able to issue a CL to, say, an Indian or Brazilian company. But that is where the limitations of Article 31 (F) of TRIPS come in the way.
The declaration called for further negotiations to come up with a solution for `countries with insufficient or no manufacturing capacities in the pharmaceutical sector'. The TRIPS council is to revert to the General Council in 2002 with a possible solution regarding export of medicines.
Dr. G. G. Nair, chairman, Intellectual Property Rights (IPR) Committee of Indian Drugs Manufacturers' Association (IDMA), and chairman, BDH Industries, said, the clause `predominantly' for domestic consumption in Article 31 (F) of TRIPS allows countries to export generic formulations and India can continue to export its versions,'' meaning as long as more than 50 per cent is sold in the domestic market, the rest can be exported.
Exports represent an opportunity for Indian companies. ``Other than developed countries, no country other than India has capabilities in both bulk drugs and formulations. While China has capabilities in bulk drugs, Brazil has strengths in formulations. India would be the obvious choice for granting a CL because of the quality of technology prevalent here and the GMP standards of Indian pharma companies. We must operationalise the declaration at the earliest,'' according to Mr. Shah.
There are other perspectives. According to Mr. B. K. Keayla, convener, National Working Group on Patents, ``What happened at Doha was nothing but a clarification of TRIPS. The declaration has not diluted TRIPS in any way. There remains much for the Government to do _ we are supposed to interpret TRIPS to the best interests of our country.
There is also the view that core issues were glossed over. Mr. Amar Lulla, joint managing director of Cipla, which took multinationals pharmaceutical companies head-on earlier this year when it offered to supply cheaper versions of multinationals-patented drugs, said, ``It is an absolute eyewash and is, in fact, just a political statement. From India's perspective, it is more or less status quo. The LDCs are incapable of manufacturing the drugs anyway _ how does one expect them to set up manufacturing facilities when even basic infrastructure is in question?''
Further, Mr. Lulla said, ``Following the AIDS/Anthrax scare, developed countries have just tried to move away from the pressure and gotten away.'' Post 2005-06, when the TRIPS agreement comes into full force, Mr. Lulla said, the situation would be very dire. ``What happens then and where does one get drugs from? It has all been cleverly manipulated. For now, everyone can buy from India and Brazil - countries without patents on medicines _ but this will change when India and other developing countries have to comply with TRIPS in 2006.''
Mr. Keayla, taking the point further said, ``How many CLs can be given? A dozen at most. Then what happens to the thousands of other domestic pharmaceutical companies? If they have no new products in the pipeline, they would become irrelevant. I think by 2010, 50-75 per cent of the smaller companies will disappear and in 15 years time, all the smaller companies will have to be closed down. The 22,000 company-strong industry will be reduced to 200-250.''
But Indian pharmaceutical companies _ at least the handful with critical mass covering marketing, distribution and an R&D base, are equipped to handle the situation. ``These companies can develop any drug by reverse engineering - that potential is there and latest drugs can be developed in one or two years. We are strong in technological development - stronger than many MNCs. In fact, through R&D we can continue process technology and patent them and sell it to MNCs,'' according to Mr. Keayla.
Basic R&D activity, however, could be a problem area for Indian companies. Besides marketing muscle, deep pockets would be required. ``In basic R&D, I do not foresee any possibility of results. Even if R&D efforts yield a new molecule, there are too many problems. It has to be patented country by country all over the world. For that sort of activity, what is needed is a size of the company to market successfully.''
A suggestion has been given to the ministry and the industry that patents should be given for molecules and not dosage forms.
``Only then can companies survive. The only possibility is to patent the molecule and let the basic drug be made available. Half of the production can be sold in the market and the rest can be formulated. If there is seriousness about safeguarding interest, molecules should be patented not the product - let individual companies do their own formulation,'' said Mr. Keayla.
Ramnath Subbu
in Mumbai
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