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Presentation on Presentation on Optimal policy for biopharma drugs Optimal policy for biopharma drugs

innovation and access in Indiainnovation and access in India

Presenter:Presenter: Rakhi RashmiRakhi Rashmi

PhD candidate,PhD candidate,

Jawaharlal Nehru university, Jawaharlal Nehru university,

New Delhi New Delhi

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Objective of the thesisObjective of the thesis

Article-27.1 of the TRIPs agreementArticle-27.1 of the TRIPs agreement

Patents shall be available forPatents shall be available for any inventions, whether products or processes, in all fields of any inventions, whether products or processes, in all fields of technology,technology, provided that they are new, involve an inventive step and are capable of industrial provided that they are new, involve an inventive step and are capable of industrial application. patents shall be available and patent rights enjoyable without discrimination as to the place application. patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.of invention, the field of technology and whether products are imported or locally produced.

Article 7:Article 7: Protection and enforcement of Intellectual Property RightsProtection and enforcement of Intellectual Property Rights should contribute to the should contribute to the promotion of Technological innovation and transfer and dissemination of technologypromotion of Technological innovation and transfer and dissemination of technology to the to the mutual mutual advantage of producer and user of the technological knowledge, advantage of producer and user of the technological knowledge, iin a manner n a manner conducive to social conducive to social and economic welfare and balance of rights and obligations.and economic welfare and balance of rights and obligations.

So the So the relationship of two very Articles (Article 7 and 27)relationship of two very Articles (Article 7 and 27) in the context of Indian biopharma in the context of Indian biopharma Industry to know the impact of TRIPs agreement on developing country like India. Industry to know the impact of TRIPs agreement on developing country like India.

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Background Background Why biopharma technology is needed for India?Why biopharma technology is needed for India?

1. Advances in the recombinant DNA technology, study of the cell growth, gene therapy 1. Advances in the recombinant DNA technology, study of the cell growth, gene therapy proteomics, and bioinformatics contribute to the development of proteins can provide proteomics, and bioinformatics contribute to the development of proteins can provide cures for many chronicle and hereditary disease as Alzheimer disease HIV AIDs, Malaria cures for many chronicle and hereditary disease as Alzheimer disease HIV AIDs, Malaria tuberculosis.tuberculosis. 2. important for a country like India where there is widespread of these diseases. 2. important for a country like India where there is widespread of these diseases.

3. investment for these drugs innovations is negligible, therefore availability through 3. investment for these drugs innovations is negligible, therefore availability through technology transfer from the multinational innovator companies are technology transfer from the multinational innovator companies are desired.desired.

Such necessary technology needs to be developed by putting more and more investment into R&D Such necessary technology needs to be developed by putting more and more investment into R&D and transferred to developing countries to reduce the spread and impact of disease which and transferred to developing countries to reduce the spread and impact of disease which

improves improves socio economic standing of the improvised populations.socio economic standing of the improvised populations.

If the potential is so great of biotechnology research, then what is all the opposition and If the potential is so great of biotechnology research, then what is all the opposition and controversy controversy

for? for? patenting of DNA sequence is related with the blueprint of life.patenting of DNA sequence is related with the blueprint of life. - several moral and ethical issues are attached with the patenting of the same. - several moral and ethical issues are attached with the patenting of the same.

- accessibility – due to the impact of the higher patent standards and data exclusivity on access accessibility – due to the impact of the higher patent standards and data exclusivity on access to to

drugs. drugs.

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BackgroundBackground

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Biopharma R&D expenditure in different Biopharma R&D expenditure in different

countriescountries

((Expenditure in US Expenditure in US Dollars)Dollars)

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US R&D perhead

Europe R&D perhead

China R&D perhead

India R&D perhead

US dollar 1000 per head

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Indian biopharmaceutical industry: Where does it stands Indian biopharmaceutical industry: Where does it stands in Globe?in Globe?

Revenue comparison of top 10 companies -2004-05Revenue comparison of top 10 companies -2004-05

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4000

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12000

GlobalCompany

IndianCompany

Global Company 10600 4620 2200 1740 1740 1700 1500 1120 886 448

Indian Company 142.7 124.7 48 17.8 16 15 14.7 13.2 11.7 11.7

Amgen/Biocon1

Gentech/serum

Biogen/Panace

a

Genzyme/Bhrat Serum

AppliedBio/Indi

an

Priority Healthcare/Sha

Chiron/Wockha

rdt

Accredo/Serum

Inter

Medimmune/Bha

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Biovail/Bharat Biotech

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Methodology used for the Methodology used for the thesisthesis

Industry level data Industry level data Firm level dataFirm level data

Interview data- 45 Indian biopharmaceutical CEO, 10 MNC Interview data- 45 Indian biopharmaceutical CEO, 10 MNC biopharmaceutical CEOs based in India,biopharmaceutical CEOs based in India,

10 NGOs working on public health in India, 5 states 10 NGOs working on public health in India, 5 states biotech department secretaries, Director General of CSIR, biotech department secretaries, Director General of CSIR, Science and technology Minister, Government of India.Science and technology Minister, Government of India.

Scrutinizing legal text Scrutinizing legal text TRIPs agreement textTRIPs agreement text Doha Declaration Doha Declaration 3030thth Aug Aug Indian Patent Act 1970(with all three amendments- Indian Patent Act 1970(with all three amendments-

1999,2002, 2005) 1999,2002, 2005) Drug policyDrug policy Fiscal policyFiscal policy

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FDI flow in Indian pharma and Biopharma sector

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FDI in Pharma FDI in Biopharma

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Amount of FDI approved in all sectors (in US $ millon)

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1000

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Amount of FDI approved in all sectors (in US $ millon)

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0

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8

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14

16

Nu

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er of cases

1991 1993 1995 1997 1999 2001 2003 2005

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Foreign technology transfer in Indian biopharma sector

Number of Financial (FDI)cases approved in Biopharmaceutical sector

Number of Technical (Technology collaborations, licensing and joint ventures) cases approved inBiopharmaceutical sector

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Comparative importance of factors considered in decision making for the transfer of technology in Indian bipharma

sector (on 15 scale value)

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Factors consdered by MNCs to invest in India

Import

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Comparativeimportance offactorsconsidered indecisionmaking for thetransfer oftechnology in

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Findings:Findings:

After the introduction of product patents in India has enhanced the innovator’s After the introduction of product patents in India has enhanced the innovator’s incentive to innovate but still multinational biopharmaceutical companies demands- incentive to innovate but still multinational biopharmaceutical companies demands- higher patent standards and data exclusivity etchigher patent standards and data exclusivity etc

On the demand of the MNCs there are there are three issue which have been On the demand of the MNCs there are there are three issue which have been Raised:Raised:1. Access to drugs- Higher price1. Access to drugs- Higher price2. Moral and ethical issue due to higher life form patenting2. Moral and ethical issue due to higher life form patenting3. Access to genetic resource 3. Access to genetic resource 4. Death knell for domestic generic industry4. Death knell for domestic generic industry

Aim of the presentationAim of the presentation

Suggest optimal policy (Patent and other regulations) to have a balance between Suggest optimal policy (Patent and other regulations) to have a balance between biopharma drugs innovation and their access in India while complying with the biopharma drugs innovation and their access in India while complying with the provisions of the TRIPs agreement. provisions of the TRIPs agreement.

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Optimal policy design Optimal policy design

Optimal policy for India

Optimal Patent Policy Regulatory policy

Drug policy

Fiscal policy

Optimal Patent Breadth

Optimal Patent Length

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Part APart AOptimal Patent breadthOptimal Patent breadth

Indian position on higher life form patentingIndian position on higher life form patenting

"higher life form"higher life form not defined in law. not defined in law. In common usageIn common usageplants and nonhuman animals other than single-celled organisms. plants and nonhuman animals other than single-celled organisms.

India: Current positionIndia: Current positionThe landmark judgment of The landmark judgment of Dimminiaco AG vs. Controller of patents (2001)Dimminiaco AG vs. Controller of patents (2001) Kolkata high court Kolkata high court held the biotech matter as patentable even if the end product of a process is a living held the biotech matter as patentable even if the end product of a process is a living

virus/microorganism / virus/microorganism / living entity. living entity.

Section 3 of the Patent Amendment Act 2002Section 3 of the Patent Amendment Act 2002 excluded from patentability, plants, animals in whole or any part thereof other than microorganisms excluded from patentability, plants, animals in whole or any part thereof other than microorganisms but includes seeds varieties of seeds varieties species and essentially biological processes for but includes seeds varieties of seeds varieties species and essentially biological processes for production or propagation of plants and animals. production or propagation of plants and animals. Patent amendment Act 2005 has accepted living entities of artificial origin such as Patent amendment Act 2005 has accepted living entities of artificial origin such as

microorganism and vaccines which fulfills the cardinal principle of patentability and not harmful microorganism and vaccines which fulfills the cardinal principle of patentability and not harmful to human, animal or plant health or unethical.to human, animal or plant health or unethical.

controversy : Current controversy:controversy : Current controversy:Presently there is controversy with regard to the definition of microorganisms as there is absence of Presently there is controversy with regard to the definition of microorganisms as there is absence of

a a working definition of microorganism in the TRIPs text.working definition of microorganism in the TRIPs text.QuestionQuestionwhether India should adopt a very narrow and limited definition of microorganism to exclude whether India should adopt a very narrow and limited definition of microorganism to exclude everything other than microscopic organisms including algae, bacteria, fungi, protozoa and viruses or everything other than microscopic organisms including algae, bacteria, fungi, protozoa and viruses or whether it should expand the scope as in the Europe where all biological material containing genetic whether it should expand the scope as in the Europe where all biological material containing genetic information and capable of reproducing itself or being reproduced in a biological system?information and capable of reproducing itself or being reproduced in a biological system?

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TRIPs Requirement: Art 27(3)-  Members may also exclude from patentability:TRIPs Requirement: Art 27(3)-  Members may also exclude from patentability:  (a)    diagnostic, therapeutic and surgical methods for the treatment of humans or (a)    diagnostic, therapeutic and surgical methods for the treatment of humans or

animals; animals;   (b)   plants and animals other than micro-organisms, and essentially biological (b)   plants and animals other than micro-organisms, and essentially biological

processes for the processes for the production of plants or animals other than non-biological and microbiological production of plants or animals other than non-biological and microbiological

processes. processes.

US practice - Diamond Vs Chakrabarty,US practice - Diamond Vs Chakrabarty,United States Supreme Court, June 16, 1980, United States Supreme Court, June 16, 1980, 447 U.S. 303, 447 U.S. 303, 206 USPQ 193206 USPQ 193 - isolated and purified gene sequences are awarded patent isolated and purified gene sequences are awarded patent protection in accordance with the novelty standard as per USC 102protection in accordance with the novelty standard as per USC 102- utility requirement under 35 USC 101 - utility requirement under 35 USC 101 - for ascertaining the obviousness of an invention - Duel case- for ascertaining the obviousness of an invention - Duel case

re Thomas F. DEUEL; No. 94-1202; March 28, 1995; USFDAre Thomas F. DEUEL; No. 94-1202; March 28, 1995; USFDAEU practice:EU practice:Article 4Article 4 of the Biotech Directive (98/44/EC) animals and plant variety is not permitted for of the Biotech Directive (98/44/EC) animals and plant variety is not permitted for

patentingpatenting but Article 4.2 -but Article 4.2 -- Article 5 of EC directive (98/44/EC) - Article 5 of EC directive (98/44/EC) - Biogen vs. Medeva, - Biogen vs. Medeva, 1997; RPC; 11997; RPC; 1 - The European Directive on Biotechnological Inventions (No. 96/9/EC of March 11, 1996) - The European Directive on Biotechnological Inventions (No. 96/9/EC of March 11, 1996) - European Directive (98/44/EC) provides broader definition of "Biological material" - European Directive (98/44/EC) provides broader definition of "Biological material" - Directive 98/44/EC – moral doctrine- Directive 98/44/EC – moral doctrine- Article 6 of the EPC - Article 6 of the EPC - Article 53(a) of the EPC prohibits patents for inventions that are contrary to the morals of society.- Article 53(a) of the EPC prohibits patents for inventions that are contrary to the morals of society.- Harvard oncomouse case – US - Harvard oncomouse case – US - Florey/relaxin case- Florey/relaxin case 1995; O.J.E.P.O, 388 1995; O.J.E.P.O, 388

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Higher life form patenting: benefits for IndiaHigher life form patenting: benefits for India financial incentive to industry to invent, financial incentive to industry to invent, Away from international patenting standardAway from international patenting standard Important for newer innovation in field of biotechnologyImportant for newer innovation in field of biotechnology Problem related with the higher life form patentingProblem related with the higher life form patenting broader scope of biotech patentability currently, there are two broader scope of biotech patentability currently, there are two

problems:problems: Access to basic platform technology such as DNA sequences, cell Access to basic platform technology such as DNA sequences, cell

lines, plants and animals at reasonable costs which are crucial to lines, plants and animals at reasonable costs which are crucial to the research. the research.

patents on plants and animals or any biological material (DNA patents on plants and animals or any biological material (DNA sequences, genes, cells) – not ethical and moral.sequences, genes, cells) – not ethical and moral.

Recommendation: Human Beings Not PatentableRecommendation: Human Beings Not Patentable - however, - however, prevent prevent

patent claims from being granted with respect to DNA sequences, cell patent claims from being granted with respect to DNA sequences, cell lines or lines or

stem cells of human origin. stem cells of human origin.

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Balancing ActBalancing Act

Laws such as the Laws such as the Competition ActCompetition Act, the , the Criminal CodeCriminal Code, prohibit certain , prohibit certain types of types of

behaviour such as unfair economic practices, cruelty to animals, or behaviour such as unfair economic practices, cruelty to animals, or the cloning the cloning

of human beings.of human beings.

before many products can be sold in India, compliance with before many products can be sold in India, compliance with regulations regulations

designed to protect human and environmental health, to ensure designed to protect human and environmental health, to ensure product safety product safety

and to meet other requirements. Compliance with voluntary and to meet other requirements. Compliance with voluntary standards, such as standards, such as

Good Laboratory Practices is necessary to maintain public confidence Good Laboratory Practices is necessary to maintain public confidence in the in the

product and its maker. product and its maker.

social and ethical considerations raised specifically by biotechnology social and ethical considerations raised specifically by biotechnology should should

continue to be addressed primarily outside the continue to be addressed primarily outside the Patent ActPatent Act. .

Access to Genetic material: Bolar provisionAccess to Genetic material: Bolar provision

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Controversy:Controversy:Novartis AG in 2007 filed writ petition challenging Section 3 (d) Novartis AG in 2007 filed writ petition challenging Section 3 (d) denies Article 27 of the TRIPS Agreement, which obligates WTO member states to provide denies Article 27 of the TRIPS Agreement, which obligates WTO member states to provide patent protection to all fields of technology without discrimination. patent protection to all fields of technology without discrimination.

in the absence of a definition or guideline, phrases like ‘enhancement of the known efficacy' or in the absence of a definition or guideline, phrases like ‘enhancement of the known efficacy' or ‘‘differ significantly in properties with regard to efficacy' give uncontrolled as well as unguided differ significantly in properties with regard to efficacy' give uncontrolled as well as unguided powers to the Controller of Patents. powers to the Controller of Patents.

violates the right to equality under Article 14 of the Constitution of India.violates the right to equality under Article 14 of the Constitution of India.

§3(d))- §3(d))- ‘The mere discovery of a new form of a known substance which does ‘The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or not result in the enhancement of the known efficacy of that substance or

the the mere discovery of any new property or new use for a known substance or mere discovery of any new property or new use for a known substance or

the the mere use of a known process, machine or apparatus unless such known mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.process results in a new product or employs at least one new reactant.

‘ ‘ Salts, esters, ethers, polymorphs, metabolites, pure form, particle size,Salts, esters, ethers, polymorphs, metabolites, pure form, particle size,isomers, mixtures of isomers, complexes, combinations and other isomers, mixtures of isomers, complexes, combinations and other

derivatives derivatives of known substance shall be considered to be the same substance, unless of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.'they differ significantly in properties with regard to efficacy.'

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Argument of the other interest group:- 1 Ever greening, 2 frivolous Argument of the other interest group:- 1 Ever greening, 2 frivolous patents, 3. generic drugs adversely affected, 4. prices will be high.patents, 3. generic drugs adversely affected, 4. prices will be high.

DecisionDecision- Rejected Glivec patent application on the ground that a patent cannot Rejected Glivec patent application on the ground that a patent cannot

be be granted for “the mere discovery of a new form of a known substance granted for “the mere discovery of a new form of a known substance

which which does not result in the enhancement of the known efficacy of that does not result in the enhancement of the known efficacy of that

substance.”substance.”AnalysisAnalysisDifference between incremental innovation and ever greeningDifference between incremental innovation and ever greening

BBenefit of incremental innovation for Indiaenefit of incremental innovation for India

- improving therapeutic efficacy, but also in providing significant - improving therapeutic efficacy, but also in providing significant benefits in terms of drug delivery, patient safety and benefits in terms of drug delivery, patient safety and compliance compliance

- Newer drugs innovation to combat diseases- Newer drugs innovation to combat diseases- More foreign investment- More foreign investmentRecommendationRecommendationPatents on Patents on Salts, esters, ethers, polymorphs, metabolites, pure form, Salts, esters, ethers, polymorphs, metabolites, pure form,

particle particle size, isomers, mixtures of isomers, complexes, combinations and other size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance should be granted if they fulfil the derivatives of known substance should be granted if they fulfil the

cardinal cardinal principal of patentabilityprincipal of patentability

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Part BPart B

Optimal Patent lengthOptimal Patent length for Indiafor India The length of the patent protection characterizes the duration of monopoly The length of the patent protection characterizes the duration of monopoly

power.power.

Controversy:Controversy:

MNC- Data Exclusivity- Article 39.3 of TRIPs text and Indian Patent Act 2005, advocating MNC- Data Exclusivity- Article 39.3 of TRIPs text and Indian Patent Act 2005, advocating a a

definition to mean a new pharma product which has been introduced for the first time in a definition to mean a new pharma product which has been introduced for the first time in a country irrespective of the fact whether it is patented or not. Another controversial matter country irrespective of the fact whether it is patented or not. Another controversial matter

is that is that what constitutes ‘unfair commercial use’ under Article 39.3.what constitutes ‘unfair commercial use’ under Article 39.3.

Health Advocates and scholars: Health Advocates and scholars:

- death knell for the Indian biopharma industry,death knell for the Indian biopharma industry, - Prices of t he drugs will be highPrices of t he drugs will be high

Data- Data- Data exclusivity-Data exclusivity-

Data protection and data exclusivity-Data protection and data exclusivity-

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Article 39.3 of the TRIPS Agreement:Article 39.3 of the TRIPS Agreement: Members when requiring as a condition of approving marketing of pharmaceutical Members when requiring as a condition of approving marketing of pharmaceutical

or of or of agricultural chemical product which utilize agricultural chemical product which utilize new chemical entitiesnew chemical entities, the submission of , the submission of undisclosed test or other data, the originator of which involves considerable efforts undisclosed test or other data, the originator of which involves considerable efforts

shall shall protect such data against disclosureprotect such data against disclosure, expect where necessary to protect the public or , expect where necessary to protect the public or

unless unless steps are taken to ensure that the data are protected against steps are taken to ensure that the data are protected against unfair commercial useunfair commercial use““

Article 39.1 provides-Article 39.1 provides- In the course of In the course of ensuring effective protection against unfair ensuring effective protection against unfair competitioncompetition as provided in Article 10bis of the Paris Convention (1967), Members shall as provided in Article 10bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 below with data protect undisclosed information in accordance with paragraph 2 below with data

submitted submitted to governments or governmental agencies in accordance with paragraph below. to governments or governmental agencies in accordance with paragraph below.

Article 10bis of the Paris Convention: Article 10bis of the Paris Convention:

Article 6 of the WIPO modelArticle 6 of the WIPO model: Any act or practice, in the course of industrial or : Any act or practice, in the course of industrial or commercial activities, that results in the disclosure, acquisition or use by others of commercial activities, that results in the disclosure, acquisition or use by others of secret information secret information without the consent of the person lawfully in control of that without the consent of the person lawfully in control of that information (hereinafter referred to as "the rightful holder") and in a manner information (hereinafter referred to as "the rightful holder") and in a manner contrary to honest commercial practices shall constitute an act of unfair contrary to honest commercial practices shall constitute an act of unfair competitioncompetition..

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- - Satwant Reddy Committee constituted by Government of Satwant Reddy Committee constituted by Government of India India

has also recognized that not providing data exclusivity for has also recognized that not providing data exclusivity for pharmaceuticals could adversely impact FDI and discourage pharmaceuticals could adversely impact FDI and discourage

the the launch of new products in India.launch of new products in India.

RecommendationRecommendationFive years of data exclusivity either starting from the date Five years of data exclusivity either starting from the date

on on which the company markets its product or ending with the which the company markets its product or ending with the

expiry expiry of patents whichever is earlier provided that company must of patents whichever is earlier provided that company must

have have filed a patent in India.filed a patent in India.

ReasonReason

- - India has a well-developed Pharmaceutical industry, India has a well-developed Pharmaceutical industry, - Around $ 72 billion worth drugs will go off patented Around $ 72 billion worth drugs will go off patented

between between 2006 2006 - China competition- China competition

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balance between access and innovationbalance between access and innovation

Constructive ambiguity in the TRIPs text- Flexibility provisions

Parallel Import

Compulsory Licensing

Bolar provision

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Effectiveness of Compulsory Effectiveness of Compulsory License (CL)License (CL)

Compulsory licenseCompulsory license TRIPSTRIPS Indian Patent Act 2005-Indian Patent Act 2005- Experience in IndiaExperience in India

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Thailand and CLThailand and CL

In January 2007, compulsory license for Kaletra In January 2007, compulsory license for Kaletra

Patented by Abott, and Plavix patented by Sanofi Patented by Abott, and Plavix patented by Sanofi

Aventis.Aventis.

Abott laboratories cut the price of second line drug Abott laboratories cut the price of second line drug

lopinavir / ritanivir, to $ 1,000 /month from $ 2, 200 / lopinavir / ritanivir, to $ 1,000 /month from $ 2, 200 /

Month for 45 lower and middle income countries.Month for 45 lower and middle income countries.

Merck immediately cut the price of first line Merck immediately cut the price of first line

antiretroviral clavirez from 1400 baht /bottle to 767 antiretroviral clavirez from 1400 baht /bottle to 767

baht/bottle in Thailandbaht/bottle in Thailand

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Brazil-Brazil-Threat of compulsory license pressured Threat of compulsory license pressured pharmaceuticals trail companies like Abott Merck and pharmaceuticals trail companies like Abott Merck and Roche manufacturer of Lopinavir, indinavir, melfinavir Roche manufacturer of Lopinavir, indinavir, melfinavir and saquinavir respectively) to substantially reduce and saquinavir respectively) to substantially reduce

the the price, thus enabling 100,000 people to receive free price, thus enabling 100,000 people to receive free treatment. treatment. whether the same thing can happen in India? whether the same thing can happen in India? - Hoffman La Roche Ltd Vs. Cipla ltd- Hoffman La Roche Ltd Vs. Cipla ltd- Novartis case (the famous glivec case)Novartis case (the famous glivec case)On the other hand at the same time, the drug On the other hand at the same time, the drug companies worry that countries will abuse compulsory companies worry that countries will abuse compulsory business, business,

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Optimal patent policy for India Optimal patent policy for India The arguments The arguments in India the combined taxes and tariffs on imported medicines are in India the combined taxes and tariffs on imported medicines are

55 55 percent.(percent.(Wilson Tim, 2008)Wilson Tim, 2008) To control the drugs prices, there is To control the drugs prices, there is

proper drug proper drug price control mechanism of Drug Price Control Order (DPCO). price control mechanism of Drug Price Control Order (DPCO).

compulsory licensing undermine IP in case of national emergency or compulsory licensing undermine IP in case of national emergency or other other

circumstances of extreme urgency or in case of public non circumstances of extreme urgency or in case of public non commercial use. As commercial use. As

there is need to balance between innovation and access.there is need to balance between innovation and access.

SuggestionSuggestionBroader with higher life form patentability, incremental innovation Broader with higher life form patentability, incremental innovation

and 5 years and 5 years of data exclusivity with a balanced flexibility provisions and of data exclusivity with a balanced flexibility provisions and

implementation of implementation of compulsory license mechanism, other regulatory and fiscal policies.compulsory license mechanism, other regulatory and fiscal policies.

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Part 2 optimal Regulatory policy for Part 2 optimal Regulatory policy for IndiaIndia

Regulatory policy for IndiaRegulatory policy for India

Drug RegulationsDrug Regulations Fiscal PolicyFiscal Policy

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Factors Factors According to the report of the Investment Commission 2006, the major impediments According to the report of the Investment Commission 2006, the major impediments

to to investment have been identified as investment have been identified as investment restrictions and/ or entry route barriers, investment restrictions and/ or entry route barriers, absence of long-term policies, absence of long-term policies, inflexible labour laws,inflexible labour laws, bureaucratic delays, bureaucratic delays, discretionary interpretation, discretionary interpretation, vested interest, bias and subjective practices,vested interest, bias and subjective practices, high cost of entry, transactions and exit; ineffective dispute resolution,high cost of entry, transactions and exit; ineffective dispute resolution, poor infrastructure. poor infrastructure. These impediments can be categorized in two groups, tariff barriers and non tariff These impediments can be categorized in two groups, tariff barriers and non tariff barriers. barriers. Tariff Barriers :Tariff Barriers : higher rate of taxation, royalty, interest, gains from sale of capital higher rate of taxation, royalty, interest, gains from sale of capital

assets located in India higher fees for technical services etc.assets located in India higher fees for technical services etc.Non-tariff barriers :Non-tariff barriers : attitudes and bias toward foreign products, a rigid distribution attitudes and bias toward foreign products, a rigid distribution

system, and Government bureaucracy. system, and Government bureaucracy.

Access to drugs are affectedAccess to drugs are affected : pricing policy, pharmaceutical procurement policy, : pricing policy, pharmaceutical procurement policy, Government subsidy policy, drug distribution policy, Administrative efficiency.Government subsidy policy, drug distribution policy, Administrative efficiency.

- We find some common factors which can influence both investment and access - We find some common factors which can influence both investment and access such as pricing policy which needs careful framework to balance bothsuch as pricing policy which needs careful framework to balance both

- On the other hand there are factors which individually affect each proper - On the other hand there are factors which individually affect each proper framework of the same can balance the negative generated by the policy which framework of the same can balance the negative generated by the policy which affect both in commonaffect both in common

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Government initiative in framing regulations:Government initiative in framing regulations:

Establish Central Drug regulatory authority (CDA) with a single, Establish Central Drug regulatory authority (CDA) with a single, central, central,

FDA-style agency.FDA-style agency.- All facility-inspection, manufacturing-license, and data-- All facility-inspection, manufacturing-license, and data-

evaluation functions concerning drugs in India. evaluation functions concerning drugs in India. - Separate, semi-autonomous Departments for regulation, - Separate, semi-autonomous Departments for regulation,

enforcement, legal, and consumer affairs; biotechnology enforcement, legal, and consumer affairs; biotechnology products; pharmacovigilance and drugs safety; medical devices products; pharmacovigilance and drugs safety; medical devices and diagnostics; imports; quality control; and traditional Indian and diagnostics; imports; quality control; and traditional Indian medicines. It will set up offices throughout India for inspection, medicines. It will set up offices throughout India for inspection, registration, and license.registration, and license.

biotech Parks promotion policies: The DBT - 10 biotech parks by biotech Parks promotion policies: The DBT - 10 biotech parks by 2010. 2010.

- In the biotech parks, concession like tax holiday U/S 10B of - In the biotech parks, concession like tax holiday U/S 10B of Income Tax Act 1961, duty free or import of equipments, Income Tax Act 1961, duty free or import of equipments, instruments etc.instruments etc.

The National biotechnology strategy 2007 provides many fiscal The National biotechnology strategy 2007 provides many fiscal and non fiscal benefits to the industry. and non fiscal benefits to the industry.

- 100 percent FDI approved in biotech- 100 percent FDI approved in biotech

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Government initiative to procure Government initiative to procure access access

The Drug Policy Control Order 2006 declared that bulk drugs The Drug Policy Control Order 2006 declared that bulk drugs developed developed

by Indian companies would be exempt from price control for by Indian companies would be exempt from price control for five years five years

or, in the case of new drugs, 10 years. Goods developed in or, in the case of new drugs, 10 years. Goods developed in India and India and

patented in the U.S., Japan or E.U. enjoy a three-year waiver patented in the U.S., Japan or E.U. enjoy a three-year waiver from from

excise duty, and companies get a 10-year tax holidays for excise duty, and companies get a 10-year tax holidays for income income

stemming from qualifying R&D.stemming from qualifying R&D. Better drug procurement and distribution policy Better drug procurement and distribution policy

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Fiscal policiesFiscal policies

Government initiativeGovernment initiative An 8 percent reduction in export duties along with export An 8 percent reduction in export duties along with export

duties duties exemption for indigenous life saving drugs and 5 percent exemption for indigenous life saving drugs and 5 percent

customs duty customs duty reduction for imported life saving drugs by the budget of reduction for imported life saving drugs by the budget of

2008-09 will 2008-09 will definitely make the drugs price lower. In fact this is a better definitely make the drugs price lower. In fact this is a better

way to way to address drugs costs rather than drugs price control. Given the address drugs costs rather than drugs price control. Given the

current current international political climate, systemic, Government driven international political climate, systemic, Government driven

reform of reform of intellectual property protection seems unlikely in the near intellectual property protection seems unlikely in the near

term. term.

35

Suggestion and ConclusionSuggestion and Conclusion optimal design of patent for biopharma innovation in India optimal design of patent for biopharma innovation in India

should confine to trade off between patent length and breadth should confine to trade off between patent length and breadth

taking into account the flexibility provisions of TRIPs. Larger taking into account the flexibility provisions of TRIPs. Larger

breadth makes it more difficult to imitate, whereas increasing breadth makes it more difficult to imitate, whereas increasing

the duration of patent protection enhances the incentives to the duration of patent protection enhances the incentives to

improve the invention by increasing R&D investment for the improve the invention by increasing R&D investment for the

innovation of biopharmaceutical drugs in general and innovation of biopharmaceutical drugs in general and neglected neglected

diseases drugs through foreign investment in particular carrot diseases drugs through foreign investment in particular carrot in in

terms of data exclusivity and higher form of patent protection terms of data exclusivity and higher form of patent protection

should be given along with the stick of properly framed should be given along with the stick of properly framed

compulsory licensing provision and parallel importation to compulsory licensing provision and parallel importation to

balance the need of the access. Government subsides promote balance the need of the access. Government subsides promote

the development of biopharma technologies. the development of biopharma technologies.