For over a decade, India has been the powerhouse behind low cost drugs for the developing world, especially Africa and Asia. India’s $4.5 billion pharmaceutical industry is now at a crossroads following a new law introduced in January 2005. It’s opened a highly charged debate, with opinion split right down the middle. Life has been to India to investigate.
Poor families benefited from India’s historic 1970 drug Patent Law, which granted patents on the process rather than the product. This means drug companies in India could produce medicines that had been researched and introduced by international firms simply by a slight change in the process. They could sell them at half the price but still make big profits. Dr. Y. K. Hamied, head of CIPLA, a generic drug company, says the new law will undermine the production of low cost drugs and people will die as a result. ‘What did Indira Gandhi say in 1981 at the WHO? That there should be no patenting of life and death. And that medicines should be free of patents. She said that in ’81. Why isn’t the government of India following her ideals today?’
It is not only poor patients in India who stand to suffer. Many poor African and Asian countries now being denied drugs that have come from India at much lower costs. International drug companies’ products will be better protected under the new law, but does this not mean that the supply of affordable drugs from the generic companies to the world’s poor is about to come to an end? Ranjit Shahni, the Managing Director of Novartis India says not.
‘If you look at the future for generic companies in India there is potential both in the domestic market as well as the global market’¦ It certainly is not going to spell the death knell for generic companies.’
But Dr Hamied points out that the R&D potential of the multinationals is massive: ‘India’s R&D budget – public sector, private sector, all industries, space, aeronautics, everything – last year was 3 billion dollars. Pfizer alone in drugs last year was 7 billion dollars. Give us a level playing field.’
But the government defends the new patent regime. Minister responsible, Kamal Nath, says: ‘Now, with having a patent product regime, it gives the people of India access to the highest quality medicines in the world. It gives the Indian industry a comfort that their own research and development will be rewarded.’
The recent history of drug patents in India has had a significant impact on world health. The 1970 act, with the patent emphasis being on process rather than product, revolutionized production – it mushroomed and the competition between companies drove prices down. At the time this was politically important for India. The country wanted to be independent and self-sufficient in a number of key areas, including drugs. But because it was so easy to copy drugs with a simple change in the process, critics labelled it the ‘copycat’ drug industry.
So did Indian generic drug companies simply rip off the formulations of the major international companies? Brian Tempest, head of Ranbaxy, another of India’s generic drug firms, says his company always like to make the most of business opportunities – but never breaks the law. ‘We don’t do anything illegal, but we do look for market opportunities where the patents aren’t present and therefore we can enter the market.’
For over fifteen years, India has been largely self-sufficient as a manufacturer of generic pharmaceuticals. Low costs means it’s also been a major supplier in producing affordable drugs for the rest of the developing world. But now, can the Indian generic producers continue to compete? The main battleground will be over the development of future drugs as multinational companies begin to re-establishing research and development operations in India. The Indian government believes the country’s cheap research expertise is what will attract them.
Dr. R. A. Mashelkar, Director General of the Indian Council of Scientific and Industrial Research, points out: ‘Drug research has become extremely expensive. Now we talk about up to 15 years to put a molecule in the marketplace. We talk about 1.5 billion dollars. I mean, that is going to be unaffordable not just for the poor in India, but even the rich in the USA. And, therefore, companies will always be striving to lower costs while maintaining quality and excellence, and I believe India is the destination.’
The government says that despite the new law, they are committed to supplying drugs at an affordable price. But those actually working in the health system, have doubts. India’s track record, they say, does not stand up to close scrutiny.
Manisha Gupte, Co-convenor, Women’s Centre for Integrated Development, claims: ‘Instead of increasing its investment in health, the government is actually pulling out. The WHO recommended expenditure on health is 6% of GDP. At this point India spends 0.9% of its GDP on health. This is affecting the poor.’
And Amit Sen Gupta, of the National Working Group on Patent Laws, adds: ‘I think for me it’s frightening that ten or twelve people today are deciding what are the kind of drugs that need to be researched because clearly those drugs are being researched not because of the health needs but based on how much profits they can bring in. That’s why you have research money going into drugs for baldness or Viagra but the last drug for tuberculosis was 30 years back. When you deny people cars or washing machines they don’t die, when you deny people drugs they die – and they die in millions.’
Ranjit Shahani of Novartis counters that innovation has to be rewarded, and points to the need for heat-resistant insulin in a country where probably 60 million people suffer from diabetes. ‘If the research to develop it is not being rewarded or it is not patentable nobody will go in that direction.’
Dr Hamied of CIPLA agrees, but says that generic companies like his cannot be allowed to be swamped by the rich multinationals: ‘Please understand what is the disease pattern in India today. We have 80 million cardiac cases, 110 million mental health cases, 60 million diabetics, 50 million asthmatics, 50 million hepatitis B cases. One in three Indians has got latent TB. The World Bank themselves have said that India by 2015 will have 35 million HIV positive cases… approximately half that in the world. Do you sincerely believe that we can afford a monopoly?’
The new law has created a key test for the Indian government in its commitment to providing medical care. The most urgent matter for the government to resolve in the changed market situation is how to supply those who need low-cost drugs the most.
The Indian Council of Scientific and Industrial Research is the largest chain of publicly funded industrial research and development institutions in the world.
The National Informatics Centre is a useful source of information on Indian government programmes.
An extensive article on India drug companies and the new law can be found on the India Together website.
WHO’s Essential Medicines website and their Essential Medicines Library can be found on their Geneva website, which also has links to many other documents covering different perspectives of the debate such as differential pricing and Globalization. UNAIDS/WHO have also published a Report on the Patent situation of HIV/AIDS drugs in the developing countries.
Read the online version of a monograph by Carlos Correa, Integrating Public Health Concerns into Patent Legislation in Developing Countries at the Eldis website.
Health Action International (HAI) is a non-profit, global network of health, development, consumer and other public interest groups in more than 70 countries working for a more rational use of medicinal drugs.
An earlier Life programme on India’s pharmaceutical industry, also featuring Dr Hamied and Cipla, was Patents and Patients. Other programmes on different aspects of life in India include: Slum Futures (housing), Listen to the Kids (children), Helping Ourselves (co-operatives), Lost Generations (child marriage), India Inhales (tobacco), The Silver Age (old age), and Untouchable? (the caste system).