Drug firms wary of patents edict

The new patents regime that sets in from January 1, 2005, can prove to be a boon or a bane for the Indian pharmaceutical companies.

While it might open new vistas in outsourcing and the niche-product segment, a lot will depend on the new Ordinance that will be formulated.

The Ordinance is expected to define patentability and the kind of opposition that will be allowed.

"The government needs to define what constitutes patentability so that what happened in the Glivec case does not happen again," DG Shah, secretary-general of the Indian Pharmaceutical Alliance, said.

In the case of Glivec, used for treatment of leukaemia, Novartis was granted exclusive marketing rights, which was challenged by an Indian company, Natco.

Even as the case was pending before the Delhi High Court, Novartis obtained an ex-party injunction against five other companies marketing the product in India. This led to non-availability of the drug. The Novartis product was 10 times costlier than Natco's, said Shah, who is also the CEO of Vision Consulting Group.

Each country has been authorised by the Trips Council to define its patentability criteria. "We should ensure that incremental improvements are not given patents rights in India, otherwise Rs 3,000 crore worth of drugs will come under patents leading to a rise in the price of drugs," Shah said.

Neither is it advisable to reverse to the old Bill. "A mandatory clearance for filing for patents overseas will lead to inordinate delay. The companies may also fear disclosure of confidential information that may be used by its competitors," argued Shah.

This clause in the Patents Bill was amended allowing all pharma firms, except those dealing with defence and atomic energy, to directly file for patents abroad.

"The patents offices also need more skilled examiners to clear the backlog and improve the quality of examination of applications. Besides, they should have libraries where patent applicants can access the database that is already in the public domain," Shah said.

The government had spent about Rs 100 crore on infrastructure facilities for the patents offices, but now needs to spend more on recruiting skilled professionals for quality examination, he added.