Report from India - Pharmaceutical Technology

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Foreign firms struggle against stricter patent laws, but all is not lost.


Pharmaceutical Technology
Volume 36, Issue 10, pp. 18-20

Despite the concerted efforts to provide low-cost drugs, the problem of poor medical access is still prevalent in the country. To date, a significant number of infants (aged 12 to 23 months) have yet to be fully vaccinated against six major childhood diseases (tuberculosis, diphtheria, pertussis, tetanus, polio and measles) even though the Indian government has made these primary vaccination programs free across the country. Tapan J. Ray, director–general of the Organization of Pharmaceutical Producers of India, an association of R&D pharmaceutical companies in India, says: "Only a short focus on the rejuvenation of the fragile healthcare delivery system, healthcare financing, and rapid development of healthcare infrastructure by the government or public private partnership will address the access issue."

It is also impractical to envisage that the granting of compulsory license will resolve the issue of access to patented medicines on a long-term basis. Granting of these licenses should only be done after exhausting all access improvement measures, Ray says.

Sharma adds, "Compulsory license should not be a benchmark for possible future decisions taken by the government. But I foresee a need and evolution of a new business model that will reach out to the masses by foreign players. This can take place possibly in the forms of differential price launches, patient assistance programs, or state medical purchase policies."

Asked whether it is possible to strike a balance between maximizing profits and providing patient access to drugs, Sharma comments that this can be achieved through differential pricing. For example, GlaxoSmithKline's Ventolin asthma inhaler is priced at the lowest level possible for the lowest-income patients, Flixotide at a lower discount for those with higher incomes, and Diskus priced highest for citizens with the highest incomes. Roche is working on details to offer discounted versions of two cancer drugs, Herceptin and MabThera, in India by early next year.

Given the current restricted parameters, foreign companies should start looking for innovative engagement models to operate on Indian soil, Sharma says. In fact, mergers and acquisitions have taken place between foreign and Indian firms. In 2010, Illinois-based Abbott Laboratories' acquisition of Mumbai-based Piramal Healthcare for $3.7 billion has brought its market share in India to approximately 7%, and the company is expecting revenues to grow an estimated 20% a year to more than $2.5 billion by 2020, propelling the company to the leading position in the Indian market. In January 2011, Bayer Healthcare has inked a joint venture agreement with Mumbai-based Zydus Cadila in a bid to enhance its presence in India.

—Jane Wan is a freelance writer based in Singapore


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