1. IS YEAR 2013 AN INFLECTION POINT FOR INDIAN HEALTHCARE INNOVATION CHIRANTAN CHATTERJEE (INDIAN INSTITUTE OF MANAGEMENT, BANGALORE) JULY 08, 2013 CII KARNATAKA INNOVATION FORUM 2013-14

2. 2013 & SOME DEVELOPMENTS (I) 2 3. 2013 & SOME DEVELOPMENTS (II) 3 4. 2013 & SOME DEVELOPMENTS (III) 4 5. WHAT DO THESE DEVELOPMENTS IMPLY?: GLIVEC Incentives to innovate for domestic Indian firms like Zydus? For patent laws in countries like Brazil, Australia Argentina, Philippines, Peru, Bolivia, Colombia or Ecuador? And for global long run welfare? Good to restore First-Mover Advantages to domestic generic firms, but heysome of these generic firms also wear an innovator hat doing NCE researchas somebody noted to me earlier its a Bridging Strategy. But are Glivec-related like outcomes creating institutions conducive to this Bridging Strategy or creation of such hybrid exploitative-explorative organizations? 5 6. WHAT DO THESE DEVELOPMENTS IMPLY?: WTO-TRIPS EXTENSION TO LDCS It takes 10-12 years (and about $ 1 billion (?) with an uncertainty of 1 in 10000) to get a new drug into the market. Is eight years enough of an extension then? Are first movers in terms of TRIPs-accession, countries like India - doing enough to build capacity in LDCs? Why is the world talking about Indian pharmaceuticals? Not so much about Bangladesh or Vietnam? Apart from being the sobering counter-influence to a world of Big Pharma I will argue that the ecosystem in Indian Healthcare Innovation are losing out an opportunity here for collaborative capacity building? 6 7. WHAT DO THESE DEVELOPMENTS IMPLY?: RANBAXY & ZYDUS Several issues: Quality. Reputation of Brand India. Compliance to non-competes for Collaborative Research? Start-up entrepreneurial single-product discovery driven entities what do they take away from these developments? More pains than gains? 7 8. SOME REFLECTION WITH A DETOUR ON HISTORY OF IP IN INDIA 8 East India Trading Co. 1784 1800 1911 1930 1947 1970 1995 1999 2005 2010 PATENTS AND DESIGN ACT 1911 INDIA INDEPENDENCE PATENTS ACT OF 1970 TRIPS WORLD TRADE ORGANIZATION INDIA JOINS PCT PARIS CONVENTION DEADLINE TO COMPLY WITH TRIPS 2005 AMEND TO PATENTS ACT Source: Authors own analysis - EMERGENCE OF THE REVERSE ENGINEERS - THE INDIAN BIO-PHARMA ENTREPRENEURS! Pre-Independence 1947-1970 1970-2005 2005-beyond - BENGAL CHEMICAL & ALEMBIC - HAFFKINE/CRI/KINGS AND PASTEUR INSTITUTE - GLOBAL INNOVATORS/IMITATORS OR A HYBRID MODEL? 9. SOME REFLECTION WITH A DETOUR ON HISTORY OF IP IN INDIA 9 East India Trading Co. 1784 1800 1911 1930 1947 1970 1995 1999 2005 2010 PATENTS AND DESIGN ACT 1911 INDIA INDEPENDENCE PATENTS ACT OF 1970 TRIPS WORLD TRADE ORGANIZATION INDIA JOINS PCT PARIS CONVENTION DEADLINE TO COMPLY WITH TRIPS 2005 AMEND TO PATENTS ACT Source: Authors own analysis - EMERGENCE OF THE REVERSE ENGINEERS - THE INDIAN BIO-PHARMA ENTREPRENEURS! Pre-Independence 1947-1970 1970-2005 2005-beyond - BENGAL CHEMICAL & ALEMBIC - HAFFKINE/CRI/KINGS AND PASTEUR INSTITUTE - GLOBAL INNOVATORS/IMITATORS OR A HYBRID MODEL? France: Between 1844-1978 had relatively weak patent regime in pharmaceuticals. Ditto with Germany (1877-1891) or Switzerland (1907-1977). But today they house the Novartises, Roche, Bayers & the Sanofi Aventis.. How & When will India house such units? Role of Complementary Institutions? 10. IN SUM The situation is not hunky dory for incentives for innovation in India. The rare lone-wolf might feel waylaid with developments in 2013. Deals might break-off because Indian partners will be looked upon skeptically. Start-up firms will feel vulnerable and might relocate to Singapore and other destinations. 10 11. SOME BIG PICTURE QUESTIONS But does India need strong patents? Can innovation happen without strong patents? Different context, but Javed Akhtar thinks otherwise. https://www.youtube.com/watch?v=9Bz_6MWeIWw Will new medicines be available in India? Where does healthcare innovation in the Schumpeterian sense stand broadly in India? Product/Process/Business Model/Source of Supply/New Organization of Industry Do we have comparative advantage in others which we are missing out? 11 12. WE ALSO FAIL TO ASK THESE BASIC QUESTIONS Has Zydus or anybody else attended to Un-validated Targets yet? How about innovation in more technologically complex therapeutic markets like Central Nervous System Drugs? R&D & Matching to Domestic Market Needs?: We have comparative advantages in NDDS but are we doing enough for TB Compliance for example? Is the mindset still chemistry-driven and will biology remain a step- child? (Especially when the world is moving to biotechnology driven drugs from chemistry-driven drugs?) Education in biology: One hopes one gets lesser Y. Subbaraos in todays India. 12 13. ARE WE FALLING SHORT OF PASTEURS IN OUR SOCIETY? 13 Shall we continue to do this to them?: https://www.youtube.com/watch?v=TeNgTUzpmjM 14. HEALTHCARE INNOVATION AT LARGE SOME AREAS OF OPTIMISM The role of the Crowd. Of 2 start-up companies. Ayurveda? Medium through-put screen? Find business-models to innovate on? Recent good work by DBT/NCBS and others to create a biology eco-system but much more is needed, especially when one looks at progress made by Beijing Genomics Center. Scope in interdisciplinary cross-campus programs? Machine Learning & Medicine/Healthcare for example? Might the IITs/NITs/IIMs come together on this? 14 15. HEALTHCARE INNOVATION AT LARGE SOME AREAS OF OPTIMISM ENTREPRENEURIALISM? 15 ENTREPRENEUR NAME FIRM NAME BACKGROUND ESTABLISH- MENT YEAR CLAIM TO FAME DR. KHWAJA ABDUL HAMIED CIPLA PHD IN CHEMISTRY FROM GERMANY. 1935 GENERIC HIV DRUGS MR. BHAI MOHAN SINGH RANBAXY MONEY LENDER -ROOTS IN PAKISTAN 1952 ONCE A DAY CIPROFLOXACIN DR. ANJI REDDY DR. REDDYS LABORATORIES PH.D. CHEMICAL ENGINEERING, NCL 1984 FIRST INDIAN DRUG OUT- LICENSED. MS. KIRAN MAZUMDAR SHAW BIOCON BS AND MS IN BIOLOGY 1978 MANY NOTABLES MR. DILIP SHANGHVI SUN PHARMACEUTICALS COMMERCE DEGREE 1983 ACQUISITION OF ISRAELI FIRM TARO HOW WILL THE NEXT-GEN FARE? 16. CONCLUSION 16 17. CONCLUSION When Alice met the Cheshire cat, she asked, would you please tell me which way I ought to go from here?. Said the cat, that depends on where you want to get to. 2013 seems to me that Cheshire cat pointing to an inflexion for Indian Healthcare Innovation. And the stakeholders will decide which way it wants to go. 17 18. THANK YOU Email: chirantan.chatterjee@iimb.ernet.in Research@: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=830407 18