Patent tightens Indian pharmaceutical industry initiative to change

In order to fulfill its due obligations to members of the World Trade Organization, India passed a new patent protection bill in March this year that prohibits Indian domestic pharmaceutical manufacturers from mimicking the patented drugs of multinational corporations without permission. This legislation inspired unprecedented enthusiasm for the Indian pharmaceutical industry to independently research and develop patented medicines. Large and small R&D centers have sprung up across the states. Some international observers believe that India, like the high-tech industry, has ample talent pool in the pharmaceutical field. With the increasing number of patented medicines declared by Indian manufacturers, this South Asian country will become a veritable "world pharmaceutical factory."

According to the “Business Week” report, Nicholas Pilamar, one of India’s largest pharmaceutical companies, spent US$20 million to build a new R&D center in the suburbs of Mumbai, and 250 young scientists are working fiercely to fight cancer. Various new drugs such as malaria. The report quoted Dr. Swati Pilamal, head of the R&D Center, as saying that the company will soon obtain 5 to 8 new drug patents and plans to conduct clinical trials before 2008.

The R&D centers of other local Indian pharmaceutical manufacturers have also expanded accordingly. The Rumbakke company with an annual revenue of 1.2 billion U.S. dollars and Ryder company with an annual revenue of more than 450 million U.S. dollars not only actively research and develop patented drugs, but also recruited well-educated but low-paid researchers.

At present, there are more than 50 drug R&D centers built in India, but this figure is likely to double in the next two years. In addition, the average investment of Indian pharmaceutical companies for research and development of patented drugs has also risen from 4% of revenue 5 years ago to 8% today.

R&D centers that have sprung up have brought a lot of patents to India. According to statistics from India's Ministry of Science and Technology, during the fiscal year ending in March 2004, Indian pharmaceutical companies applied for 855 patents for drugs, which was almost zero a decade ago.

Analysts pointed out that in addition to the powerful stimulus of the new patent act, the two major advantages of human capital and research and development costs are two major motives for Indian companies to actively develop new drugs. Like high-tech industries, India's pharmaceutical industry also has ample talent pools. Many young scientists not only have good higher education, but also earn only one-third of the wages of Western countries. In addition, the cost of developing a new drug from scratch in India is about 100 million U.S. dollars, but in developed countries this figure is at least 1 billion U.S. dollars.

Some Indian domestic pharmaceutical companies are gradually becoming competitors of top international pharmaceutical groups such as Pfizer and GlaxoSmithKline. Dr. Swati Piramal said that in the global pharmaceutical market, Indian pharmaceutical companies are eager to obtain the same "speech right" as their counterparts in developed countries. Global Insight in London predicts that by 2007, Indian drug makers will receive 33% of the global pharmaceutical market share.

However, tremendous pressure from multinational companies and fierce competition in the domestic market have already emerged. This is the two major problems that the Indian pharmaceutical industry cannot avoid. Insiders warned that Indian drug makers are not choosing a straight path. Many small and medium-sized companies will certainly be eliminated from the market within a year or two.

First, the competition in India's domestic pharmaceutical market has become increasingly fierce. This internal friction has greatly weakened the ability of the Indian pharmaceutical industry to compete with multinational corporations. Ajid Daji, head of the Indian Association of Pharmaceutical Manufacturers, predicts that under the background of increasing patent protection in India, unless these small companies change their business models quickly, it would be good to survive by 1/10 by 2010. .

Secondly, under the framework of the WTO agreement, India will gradually relax the restrictions on foreign investment. Coupled with the new patent law that increasingly emphasizes the protection of intellectual property rights, the Indian pharmaceutical industry will be further exposed to the “gun” of multinational corporations.

There are also concerns that in the fierce market competition, Indian companies will overinvest in research and development of new patented drugs, but will lose some market share in a short period of time. Hamad, chairman of Cipla, which manufactures AIDS drugs, pessimistically stated that by 2015, patented medicines produced by multinational companies will account for 60% of India’s market share. At that time, the pricing power of many medicines is entirely in the hands of foreigners. However, domestic companies in India have been banned before playing their feet.

Background links:

In 1970, India enacted the "Patent Law", which only granted method patents for food, medicines, agrochemicals, etc., and did not grant product patents. This kind of protection and control measures have greatly promoted the rapid development of the Indian pharmaceutical industry. Over the years, Indian pharmaceutical companies have developed and produced such non-registered drugs with only “method patents” that not only meet domestic demand but also export to developing countries and even developed countries. In 2000, the annual export volume of non-registered drugs in India reached 1.6 billion U.S. dollars, accounting for about 8% of the world's total drug trade volume.

In 1994, India and the World Trade Organization reached an agreement on intellectual property rights, the so-called "TRIPS", which intends to introduce product patent protection systems in all technical fields. According to the commitments made to the WTO, India has revised the Patent Law three times and completed the adjustment of relevant laws and regulations in the transitional period in 2004, recognizing "product patents" for food and medicine. In March this year, the Indian Parliament passed the third revised Patent Act. When the "TRIPS" agreement was signed that year, India made reservations on certain articles. The new "Patent Law" also highlighted the dual features of protecting intellectual property rights and safeguarding public health in developing countries.

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