The Pharmaceutical
industry in India is the world's third-largest in terms of volume and stands 14th in
terms of value.
Medicines are developed through years
of research and thus helps in curing diseases. R&D takes high cost.
Innovations can be expected through R&D only. To promote innovations patent
is granted(as far as other fields are concerned). The patent protection helps
the company to carry on it’s R&D as there is no threat from any competitor
and they will be the sole seller of that product. India has had lax
patent laws compared with other countries. They allow Indian companies to
produce generic versions of drugs that are under patent elsewhere. The
competition between manufacturers drives down the price of the drug.
For many years,
India did not recognise drug patents at all. However, in 1994, India
signed up to the TRIPS agreement (Trade Related Aspects of International
Property Rights), an international law that gives drug companies a 20 year
patent on the production of drugs. TRIPS required India to introduce patents on
medicines in 2005. In contrast to other countries in the TRIPS agreement, India
also introduced laws that prohibited an industry tactic called evergreening.
Evergreening is where a company extends its patent on a drug by patenting
slightly modified versions of the drug. For example, they might release the
original drug in its salt form, even if this does not bring a therapeutic
improvement. Two major cases were decided recently recently relating to the
Medicine patenting in India. Fortunately both the judgements are in favour of
Weaker section (we the customers). Supreme court recently declined the patent
application of swiss based Novartis on the grounds of evergreening. It tried to
expand it’s patent on Glivec. It launched better version of Glivec and demanded
patent for it, which was out rightly rejected as India does not permit patent for
Evergreening. One more judgement was passed recently which was a case relenting
to compulsory licensing of drugs. Compulsory licensing is give to drug
companies under which it can produce and sell the already patented product of
some other company at a lower price. This is given for lowering down the price
of medicine which is highly charged by company having patent of that product.
Natco company had applied for a compulsory licensing to sale drug. India has
invoked its compulsory licensing rules for the first time, allowing the
domestic drugmaker Natco Pharma to make and sell a version of Bayer's cancer
drug Nexavar--despite the fact that Nexavar is still on patent. Natco will pay
a 6% royalty, but given the fact that it's going to be selling Nexavar at a
substantial discount, that payment probably won't be very significant. It's the
patent board's ruling that's significant. Now that the Indian government has
granted one license, more generic drugmakers are expected to petition for their
own.Compulsory licensing is a contentious affair; globally, it's uncommonly
used. The idea is that, in a public health crisis, generic drugmakers should be
able to sell lower-cost versions of branded drugs, so that more patients can
get access to treatment. Some multinational companies have granted their own
licenses to low-cost drugmakers for public health (and public relations)
reasons, particularly on AIDS drugs for sale in Africa. Government compulsion
is a different story; branded drugmakers view that approach as an assault on
their intellectual property rights.
One can argue
that cost Research and development is much higher than what all revenue
generated at normal rates of distribution. But that is so not true. Agree that
cost incurred in R&D is much higher that’s why they expect patent
protection so as to create a monopoly and sell at higher prices. In this manner
they are making it available to only few people who can afford. In this manner
they earn revenue only from small proportion of needy people. If they lower up
the cost or if the patent protection is not granted they would be forced to
lower the prices and thus manner large number of people would be able to afford
it. Which will lead to economies of scale and more profit. Because of it now
more number of people will prefer buying it compared to earlier situation where
most people prefer to die instead of buying such costly medicines. Also the
currency of every country fluctuates. And the company applying for patent has
worked in R&D and is very well established as a multi national company
operating all over the world like Ranbaxy, Novartis. The cost incurred for
producing the drug is the same everywhere and prices actually charged varied from
country to country. Their prices for developing country like India and
underdeveloped country shall be different compared to what they charge in
developed countries. They are earning a lot already from selling it at global
market. They don’t need a patent to cover up a R&D cost and if they want to
earn the real more profit then they should try to focus on inclusive growth
than fragmented growth. They should lower the cost and their sales would
include a new customer base which is far more than the earlier creamy layer. As
rich people are always fewer than poor. Ex- If a price of medicine is 20,000
and there are 100 people. Out of which 20 are rich are 80 are either middle
class or poor. Only 20 people can afford this. They earn 20,000x20= 400000 Rs.
Only. And suppose if price reduced to 5000 Rs. Now say 80 can afford
it(considering the rest 20 to be extremely poor) now also they can earn
5000x80= 400000 Rs. The same as earlier situation. Then why not benefit the
society by reaching out to a large number of population than being contended
with mere small proportion of population. The more you reach out to people, the
more goodwill it is and popularity too which is extremely necessary in this era
to make mark in the long run.
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