World's drug makers make a beeline for Indian market

Friday, 05 March 2004, 20:30 IST
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WASHINGTON: India's lack of strong patent laws had hitherto kept the world's largest drug makers away from doing global pharmaceutical business with the country. All that has changed since India's agreement to abide by the World Trade Organisation's (WTO's) rules respecting patents by 2005. In the past year, that agreement has inspired business collaborations, the development of research centres and ambitious plans by drug makers, including Bristol-Myers Squibb, to expand business operations into India, according to reports here. "Patents were considered evil. Now that Indian companies are in their own right knowledge developers, their perception of the patent system is shifting," said Farok Contractor, a professor of management and global business at Rutgers University's Business School in New Jersey. This only shows that India is elbowing its way into the world economy and becoming a force to be reckoned with. It also reflects India's potential as a centre for less costly drug research. The change didn't come easily, according to a report in the Star Ledger, a leading daily published from New Jersey. For more than a decade, Pharmaceutical Research and Manufacturers of America, an industry trade group, tried to persuade India to come around on the patent issue. India has a strong academic system, a nascent biotech industry, good hospitals and has produced several of its own generic drug makers, such as Dr. Reddy's Laboratories and Ranbaxy Laboratories, which have US subsidiaries in New Jersey. Bristol-Myers Squibb, which has operations in 100 countries, is the latest US drug maker to propose an expansion into India, a nation where it had previously abandoned efforts to set up shop. However, according to published reports from India, the company is proposing manufacturing, marketing and research operations. Bristol-Myers, which employs 8,500 people including researchers in New Jersey, said it won't outsource US jobs. "Bristol-Myers has long recognised the importance of India as a business market," said Becky Taylor, a spokeswoman for the company. "Unfortunately, the company's previous efforts to establish an operation were launched at a time when the environment was less supportive of foreign investors. The business environment has changed significantly since then," she said. Bristol isn't alone. There is a flood of foreign investment proposals prompted by India's pledge to honour patents. The following is the list of foreign companies rushing to India to do business in the pharmaceutical industry: -- AstraZeneca opened a $10 million research facility near Bangalore last year. The Swedish drug maker committed $40 million to develop a treatment for tuberculosis. -- Pfizer, the world's largest pharmaceutical company, plans to create an academy for clinical research and training in Mumbai, the Indian metropolis formerly known as Bombay. The drug maker has committed $1.5 million for the first phase of the academy, according to reports. It is partnering with Bombay College of Pharmacy and India-based Suven Pharma on the project. -- GlaxoSmithKline has entered a broad, multiyear research partnership with Ranbaxy Laboratories to develop drugs for the United States and India. -- Schering AG of Germany has forged an agreement with the India-based pharmaceutical company Zydus Cadila to market and manufacture Schering's products for the India market. -- Novo Nordisk, a Danish company with operations in New Jersey, will outsource $10.5 million worth of clinical trials to Dr. Reddy's, one of India's leading generic drug makers, for its new diabetes drug. But whether India actually becomes a global centre for pharmaceutical research depends on the government's approach to patent protection, says an official of the U.S. industry trade group. India's opposition to patent law is rooted in its socialist history. In the United States, patents are considered venerable tools by the industry to protect profits generated by their new medicines. Typically, a patent will cover a drug for about 10 years before the manufacturer faces competition. Under existing Indian law, only the drug manufacturing processes are protected, not the medicines. For India, new patent laws will mean more than the arrival of U.S. and European pharmaceutical companies and their money. It could result in lucrative research partnerships, an infusion of venture capital and the promise of innovative products.
Source: IANS
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