‘We are not open for business, as a country’

‘We are not open for business, as a country’
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First Published: Thu, Aug 23 2007. 06 34 PM IST

Ranjit Shahani, head of Novartis AG’s Indian operations, says the Madras high court’s decision is a setback for innovation and for public health
Ranjit Shahani, head of Novartis AG’s Indian operations, says the Madras high court’s decision is a setback for innovation and for public health
Updated: Tue, Aug 28 2007. 04 20 PM IST
Two days after Novartis AG chief executive Daniel Vasella said the company’s planned investments in India will now shift to other countries because of a patent protection policy that actually stifles innovation, Mint sat with Ranjit Shahani , the head of the Swiss drug maker’s Indian operations.
Shahani also heads the Organization of Pharmaceutical Producers in India, an industry lobbying group that represents multinational (MNC) pharmaceutical companies in India, where the company has been unsuccessful in challenging a law that denies patent protection for what are considered as minor improvements to known drugs. The closely watched case was over the manufacturer’s Glivec cancer drug.
Novartis, many say, was sticking out its neck too far by challenging Para 3(D) in the Indian patent law, and that the verdict of the Madras High Court has come as a setback for the drug maker. What’s your plan of action on Para 3 (D) as well as Glivec patent application?
Ranjit Shahani, head of Novartis AG’s Indian operations, says the Madras high court’s decision is a setback for innovation and for public health
First of all, the Madras High Court’s decision is not a setback for Novartis. It is a setback for innovation, for public health. Novartis is likely not to appeal the decision. Our actions have advanced this essential debate in India, now it’s up to the relevant political leaders and groups to work together to strengthen India’s patent law.
We already have several groups that are working towards this goal. In May, the World Trade Organization urged India to improve its Intellectual Property (IP) system as part of its recent Indian trade policy review; then there is a joint statement from the G-8, governments of India, China, Brazil, Mexico and South Africa, which recognizes the crucial value of IPR and underlines the importance of protecting innovation. The third is the US government and their two ongoing formal dialogues with the Indian government: Trade Policy Forum and High Technology Coordination Group to discuss IP and other issues. Then, the European Commission and India have recently launched free trade agreement negotiations through which EU will seek implementation and improvements in India’s IP regime. And very recently, the Indian and the Swiss governments have signed a memorandum of association on IP.
The patent challenge on Glivec, as you know, rests with the IP Appellate Board (IPAB). The Madras High Court has given a decision that Mr (S) Chandrasekharan cannot be the technical member, so we await the announcement of a new technical. We support the formation of the Board because that is all part of a good functioning patent framework. We hope that our application will be positively heard.
But it is understood that the Court merely stayed the IPAB hearing of Glivec case until a decision is given out?
Yes… but if you look at the detailed judgment, it implies that he (Chandrasekharan) cannot be the technical member. It is going to be a challenge for the government to appoint an appropriate technical member but I’m sure they will find someone.
Would you be convincing the Swiss government to take up the issue before the WTO’s Dispute Settlement Board? S
The Swiss government support IP, innovation; they have been following the case very closely and being a Swiss company, we certainly will take support from the Swiss government.
Indian pharma companies and multinational drug makers push for changes in opposite directions on matters such as price control, data protection and definition of patentability. There are fissures within the industry and the tide so far seems to be against the MNCs... is it becoming tough to battle on?
In the area of price control, regulatory framework and counterfeit drugs, the whole industry wants a liberalized regime. This means price monitoring instead of price control. We have the lowest price medicines in India. Yet, because of poor health infrastructure, people do not have access to medicines. There is a need to focus time, money and energy on building health infrastructure
In fact, only 35% people have access to medicines in India. Even in Africa, which is called the ‘dark continent,’ 47% of the population has access to medicines.
On the issue of data protection and patents, the “copycat Indian generics” companies and MNCs are split. But there are no differences with the Indian research oriented companies, which are putting quite a bit into research themselves. The average spend of the top ten drugmakers stands at 6.6% of revenues and it compares to 18-20% spent by global drug companies. But this 6.6% expenditure will become infructuose if we don’t have a strong patent law, an environment which protects data and IP. So, it is not the Indian companies but the “copycat generic companies” versus the MNCs.
Investments in research or its lack there of is typically the threat that most drug MNCs resort to while negotiating with policy makers. How serious and credible is this danger?
When the product patents came on in 2005, there were hopes and expectations that the deficiencies and gaps on this will be (filled) very quickly. Two-and-a-half years have passed and we still don’t have a data protection law in place, we haven’t got what the definition of patentability is…We had two committees and the reports of both the committees haven’t been implemented.
So, the impression given is that we are not open for business, as a country.
We are losing out on investment. It is not just about China (getting the R&D investments), look at Singapore as well. The operating environment and speed at which the decisions are taken, is obviously significantly ahead (there). Between 2005 and 2007, five companies have invested in China and at least, one or two of them should have come to India. These are Johnson & Johnson, Roche, Astrazeneca, GlaxoSmithKline and my own company, Novartis Ag. Each company would have spent a few 100 million dollars, though I don’t know the exact figures. In the last 24 months, we have made an initial investment of $ 200 million in China for R&D. At the Novartis’ Institute for Tropical Diseases in Singapore, we spent about $400 million. For sure, India could have been home to some of these investments. Moreover, the Singapore institute works on treatments of dengue, malaria and tuberculosis, all of which should have rightfully come to India. We lost that out.
In this session of Parliament, two important bills are going to be tabled : one that imposes stringent punishment for those guilty of making and selling spurious drugs and another on setting up the Central Drug Administration (CDA). How do you perceive these bills changing the scenario on the ground?
These are two very important bills. The one on spurious drugs has been pending for nearly two years. The first step is to have a stringent law in place and the second is to implement it on the ground. The counterfeit drugs ‘industry,’ as I call it, has been working with impunity so far and we have allowed it to mushroom. We want the government to take action against it and the industry fully supports it. We need a three-pronged action against the counterfeit drugs: the first is with the government, second with the industry and third is with the consumers.
As far as the government is concerned, its responsibility does not end with this Bill; special anti-counterfeiting cells have to be created in the state administrations and the judiciary too has to focus on this.
From the manufacturers’ end, anti-counterfeiting measures that are very specific and go beyond holograms need to be adopted. These could be RFID techniques, bar-coding or specific (edible) ingredients that are put into syrups or tablets to keep the counterfeits off but all this is going to cost additional money.
Consumers themselves should be ensuring that they get a proper receipt for their purchase, see the batch number and check for proper packaging. I don’t think counterfeits will ever disappear but it will dramatically reduce their extent.
Setting up of a CDA is a good idea. Across the world, you have a central authority. It is only in India that you have a multitude of widely dispersed authorities that presumably gets into different standards.
A recent WHO study has pegged the level of counterfeit drugs in the country at 3% and not much of regional variations in prevalence. What’s your take on that?
The WHO study is a good beginning but we believe that the sampling needs to be much wider and across states. The figure of 3% or any other number becomes misleading because there are states in India where counterfeiting is absolutely minimal but there are pockets in other states where one in every five strips could be counterfeited. So an overall India figure is highly misleading.
There have been occasions when the drug industry had a chance to solve the issue of drug access, the drug banks proposal of the ministry of chemicals and fertilizers being a case in point. You seem to have backed out of that.
The industry has not backed out of any commitment that it made. These programmes (drug banks) were in conjunction with the drug policy which said that if all this is done, there will only be price monitoring for non-controlled drugs. It was a complete proposal and should not be taken in isolation.
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First Published: Thu, Aug 23 2007. 06 34 PM IST