Novartis warns India of losing R&D biz to China

NEW DELHI: Multinational drug makers would prefer China for investments in pharmaceutical research so long as India keeps the bar for patenting a drug so high, warned drug major Novartis on Monday after the Madras High Court turned down the company’s challenge to the country’s patent law.

Novartis India vice-chairman and managing director Ranjit Shahani, who also heads a body that represents MNC companies, told ET that most of the drug majors have invested in China in the last two years in pharma research , while India did not attract any investments. “No company will go on setting up research centres on an yearly basis. Once it is set up in country , it may not look for further investments for some time,” said Mr Shahani .

A crucial patent law provision that describes what is patentable is set for more heated debates and divergent interpretations as Novartis’ appeal against the government’s denial of patent to Glivec is still pending. The provision stipulates that new forms of older drugs merits patents only if they vary significantly in terms of properties with respect to efficacy.

MNCs say that there are many inventions that may not be entirely new chemical entities but are very useful to the patients. “These have utility and value not just therapeutically, but also in terms of patient safety and compliance , cost of production and ease in transport in a country of extreme climatic conditions,” said Mr Shahani. “A large number of incremental innovations have significant practical advantages for the patient over the existing medicine, although they may not qualify as scientific breakthroughs.

Companies will invest in such improvements only if there is an assurance of ownership at the end of costly and tedious research ,” Novartis international corporate research head Paul Herrling had told ET during a recent visit.

The domestic pharma industry disagrees : “Why should a product be in the market if it cannot claim these essential qualities? And how could a company come up with another product at the end of the 20-year patent life and say the new product is more stable,” asks D G Shah, the representative of big domestic drug makers.

While lawyers would battle it out as Novartis’ appeal continues, the government is working on a new patents manual that is expected to reduce subjectivity in deciding what is ‘significantly more effective that the already known’ . “Any sort of guidelines would leave some subjectivity in deciding the newness and usefulness of an ‘invention.’ We would like the government to bring the manual in public domain for transparency ,” said Mr Shah.

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The court decision should not have any significant impact on the company’s financial performance, analysts said Drug makers such as Ranbaxy, Sun Pharmaceuticals, Cipla, Natco Pharma and Camlin Pharma were already selling generic versions of Glivec in India Even an eventual denial of patent on Glivec would not change the current situation