It's the right medicine: Recognising regulatory data protection will benefit India's pharma industry
Ranjit Shahani Times of India April 6, 2011
As the end of a long road in reaching a free trade agreement (FTA) between the 27-nation European Union and India seems in sight, it's time to reflect on certain important issues. Much has been written about the pitfalls of opening up India's growing industries to global competition. From an analysis of other countries, it's clear the cornerstone of a developed economy - and a key to sustained competitiveness - is long-term commitment to research and development. Since 2000, nine of the top 10 global R&D spenders hail from the so-called "rich nations' club", the Organisation for Economic Cooperation and Development.
But an R&D-based economy needs a favourable environment. The government needs to implement a range of policies that encourage public and private sector R&D investment of direct benefit to the people of India. R&D is inherently expensive and risky - with prolonged timelines and uncertain outcomes. The government needs to provide specific protections that create an environment where trained scientific personnel enjoy space and freedom to design new products benefiting society. Else, no Indian company, big or small, will garner the wherewithal to deploy the massive investments required.
According to the Centre for the Study of Drug Development, Tufts University, the pharmaceuticals industry invests $1,318 million and 10-15 years on average to introduce a drug in the market. Of this, 60% is spent on data collection, reveals the International Federation of Pharmaceutical Manufacturers & Associations. With such deep investments and protracted research periods, the innovative pharma industry has every right to expect a return on investment. The lack of returns in the absence of robust IPR protection will discourage further R&D and foreign investments. In fact, prior to adoption of patent protection in 2005, homegrown pharma companies had only negligible amounts in R&D. Now they have begun to invest significant amounts, but still have miles to go before they can introduce their first new medicine.
Some protectionists voice concerns that intellectual property impedes availability of cheap medicines in India and elsewhere. Yet evidence indicates that, contrary to concerns at the time, the introduction of the India Patent (Amendment) Act 2005 has had no negative impact on India's pharma industry. Indeed, the latter is going from strength to strength. Moreover, prices of medicines in India are among the world's lowest. Truth be told, the real barrier to access is lack of a proper health care financing system.
A contentious issue in the India-EU negotiations is regulatory data protection (RDP). Some claim RDP will hurt the Indian generics industry. This charge is unsubstantiated, as the industry is healthier than ever before. As per IMS Health, for the 12 months ending September 2009, global prescription sales growth of generic drugs rose by 7.7% (up from 3.6% in 2008) against 5.7% for global pharma drugs. Furthermore, generics accounted for 72% of the total US pharma market volume in 2009 - an all-time high in the world's biggest pharma market.
RDP provides an important complementary IP right to patents, which are already accepted in India. But patents are not always available to protect new medicines where much has been invested to generate the regulatory data necessary for authorisation and marketing. RDP is essential to protect this investment for a limited period only, regardless of patentability. Absence of RDP is the most glaring gap in India's R&D environment.
RDP is imperative to attract FDI in the pharma sector. Introducing it will end the unfairness of a situation where investment in knowledge of the originator can be appropriated by another company without protection or compensation. DE or RDP should not to be confused with patents. Both offer distinct and separate intellectual property protection. RDP accepts exclusivity and patentability of data submitted to regulatory authorities as part of product registration meant exclusively for this purpose, thereby protecting and incentivising substantial financial investment in drug discovery and development. RDP is especially significant when strong patent protection for a specific product is not available, where the patent period has been eroded by a long development phase, or where patent enforcement systems are inadequate.
With life-threatening ailments, it may be argued that to facilitate timely market access and prevent expensive, repetitive animal and human clinical trials, competitors should be permitted access to the original proprietary data filed with regulatory authorities. Although this seems fair, it should be permitted only after the expiry of a reasonable protection period. Without this period of protection, data would never be generated and new medicines would never reach the public.
As the conclusion of an FTA approaches, it's imperative IPR provisions fostering innovation in the EU and India are adopted to benefit both. These will encourage emergence of a robust R&D-based industry alongside generics, each strengthening the other. Without new medicines produced by the innovative pharma industry, the generics industry would soon have an empty pipeline of products to manufacture and sell.
The rising role of India's generics industry in meeting the needs of various regions should be acknowledged. While its biggest export markets continue to be the US and EU, its role as a provider of cheap life-saving drugs to developing countries should continue not just for now but well into the future. This view is supported by none other than EU trade commissioner Karel De Gucht.
India is well poised to make the transition from a generics pharma powerhouse to an innovation giant. But to transform this dream into reality, it needs to put in place proper patent protection policies that enforce IPR laws in letter and spirit.
(The writer is president, Organisation of Pharmaceutical Producers of India, Mumbai.) Source: ToI