India reforms drug patent laws

[bongme]

hi

Wednesday, 15 May, 2002

India's lower house of parliament has approved a bill to reform the country's patent laws, to bring them closer to international standards.

The new Patents Second Amendment bill allows the government to license patented drugs to domestic firms in case of public health emergencies when supplies are low or prices too high.

But the bitter pill for India's pharmaceutical industry, which is the biggest generic drug producer in the world, will come if the next part of the bill goes through parliament.

It includes new laws giving full patent protection to drugs, conforming with World Trade Organisation (WTO) obligations to observe international laws from 2005.

Generic headache

Currently, India recognises patents protecting the way a drug is made but not the drug itself, allowing local firms to copy drugs patented in the West as long as they use a different process.

"The minister said the pharma industry needs to come out of its reverse engineering mode and move forward into the research and development mode," Dr Anand Kumar of the Astra Zeneca Foundation in India told the BBC's World Business Report.

"He also said that India is emerging as the new leader for the knowledge based drug industry and that we should protect our interests," he said.

Many global pharmaceutical firms have been holding back investments in India due to the lack of strong patent laws.

Earnings high

Generics are the drug makers main source of revenue because of the cheap labour and research costs and strong exports.

"More that 85% of the currently available drugs are going out of patent or are out of patent, therefore India has much to gain from the generic drug industry," said Dr Kumar.

Analysts expected the strong earnings to continue despite the new laws.

Indian companies have been targeting the lucrative US generic market, where drugs with combined annual sales of about $47bn lose their patent by 2005.

Bongme