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India sees patent-valid future

India is on the brink of a potential law change that will see it recognising for the first time foreign pharmaceutical patents.

India's position as a global generics hub is set to change in the future, as the country is on the brink of a potential law change that will see it recognising for the first time foreign pharmaceutical patents.

Traditionally, the country's generics pharmaceutical industry has thrived on the point that international patents covering medicines are not recognised, thereby enabling India's firms to produce cheap copies of top-selling, branded drugs.

As long as the manufacturing process was different to that of the original developer's, India's companies were fully able to produce a generic version and launch it onto the global market as soon as the international patent had expired.

This led to senior laboratory scientists finding work in India to develop alternative ways of producing market-leading drugs for the country's flourishing industry.

However, India has announced that it will stand by a pledge to the World Health Organisation to recognise, what it saw previously as invalid, product patents. Should the plan be ratified by parliament at its next session (February), it could become law.

The change will mean that India, whose low costs have already helped the country develop research partnerships with global pharmaceutical companies, will seek wholesome foreign investment in good, innovative science.

Ranjit Shahani, president of the organisation of pharmaceutical producers of India and also head of Novartis India, commented that, provided the ìproduct patent law is implemented and policed wellî, it would ìdefinitely encourage multinationals to invest in Indiaî.

However, the environment that exists in India today will remain unaffected for the time being, due to the specifics of the plan. The new rules do not apply to drugs patented before 1995, which will allow Indian drug giants to continue selling successful products. Indeed, some 95 per cent of all drugs sold in the country were patented before 1995, the government has noted.

Furthermore, it may be that drugs patented since 1995, but before the introduction of the new law will also be exempt.

However, the changes will mean that India's pharmaceutical future looks to be a very different shape to today's environment. Some companies have already started to look for new revenue streams, such as contract research for other pharma firms, or developing innovative research capabilities themselves.

Analysts say that the more than 5,000 drug companies in India will see more mergers and takeovers as a result of the change.

30th September 2008

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