India no IPR pariah: US drug lobby report

Amidst threats of Big Pharma relocating its R&D from India due to inadequate intellectual property rights (IPR) protection, data available with the Pharmaceutical Research and Manufacturers of America (PhRMA), an association of US drug manufacturers, indicates that India's record in protecting IPR is far better than rival destinations like China.

In its annual memorandum to the United States Trade Representative (USTR), PhRMA said US pharmaceutical firms, which account for $43 billion of the $55.2 billion global drug R&D investments, had suffered a 34 per cent loss on their total sales in China due to inadequate IPR protection during 2006.

In contrast, India does not even figure among the list of 23 countries in which PhRMA member firms suffered substantial financial damages from IPR-related problems. 

ON THE SICK LIST (US data exclusivity and patent protection damages list)
Country	IP protection damages ($ million)	Total sales ($ million)	Damages as % of sales
China	3.60	10.40	34.60
Lebanon	0.01	0.34	2.94
Poland	1.01	4.70	21.40
Egypt	0.19	1.01	18.10
Brazil	1.40	8.70	16.00
Source: PhRMA Special 301 submission 2007 to USTR

The PhRMA's observation is significant against the backdrop of Swiss pharma major Novartis AG's decision to relocate its R&D investments from India.

The company's declaration came after the Madras High Court rejected its appeal that challenged the provisions of the Indian Patent Law that made patenting of slight improvements difficult.

Ranjit Shahane, managing director of Novartis in India and president of the Organisation of Pharmaceutical Producers of India, had told Business Standard that five multinational pharma firms "� Novartis, Roche, Johnson & Johnson, Glaxo and Astrazeneca "� preferred China over India to set up R&D units due to inadequacies in India's patent laws.

According to the PhRMA, inadequate enforcement of the IPR was the fundamental problem that PhRMA members faced in China and US companies suffered the worst damages in China compared to all other foreign countries, including India, last year.

"The multinational threat of preferring China over India has to be seen in this context. On one side, they say India has the worst IPR protection; on the other, they find China the worst place to be in," said D G Shah, secretary general, Indian Pharmaceutical Alliance.

The concerns expressed by PhRMA about its Chinese business included inadequate enforcement of IPR with respect to clinical data protection, patent linkage and counterfeit pharmaceuticals.

The other issues are inefficiencies in the healthcare system such as insufficient healthcare funding, prescription and dispensing practices, hospital administration and hospital bidding pilot projects, unpredictable pharmaceutical pricing and reimbursement policies.

On the clinical data protection, an issue on which India often comes in for criticism, PhRMA said loopholes in China's regulatory environment allow for unfair commercial use of safety and efficacy data generated by PhRMA member-companies.