Mishandling IPR cases costing India foreign investments: Novartis

  • PTI, New Delhi
  • |
  • Updated: Aug 18, 2013 12:11 IST

Hitting out at India's way of dealing with Intellectual Property Rights (IPR) issues, drug major Novartis has said India is losing investments in research and development from MNCs to China due to lack of an ecosystem that fosters innovation.

According to that, the company, which lost a patent case for its cancer drug Glivec, said India needs to have fast track courts to deal with IPR disputes.

"The recent cases that we have seen in the area of IPR do not in any way point to an environment that encourages innovation. A patent is granted then revoked. A patent is granted then violated. A patent is granted then a compulsory license is issued," Novartis India vice chairman and managing director Ranjit Shahani told PTI.

He said that China has been able to attract leading global companies to invest in research and development (R&D), while India has been unable to do so.

"What we certainly would like to see is an ecosystem that fosters innovation and fast-track courts to hear and decide cases involving IPR. China has drawn all the leading global companies to invest in R&D there while India has not. That itself should serve as food for thought," he said.

While the Supreme Court had rejected the company's plea for a patent on cancer drug Glivec in April, last year the government invoked compulsory license on Bayer Corporation's cancer-treatment drug Nexavar permitting Hyderabad-based Natco Pharma to manufacture and sell the drug at a price lesser by over 30 times charged by its patent-holder.

Shahani said the government needs to have a holistic approach and look at global companies as being part of the solution.

"All stakeholders must come together to find sustainable solutions that balance the need for innovation with the need for medicines that are affordable, all within a robust intellectual property rights environment," he said.

Setting up fast-track courts to address IP disputes would certainly be a step in the right direction, he added.

Espousing the cause of foreign capital in the Indian pharmaceutical sector, Shahani, who is also the president of Organisation of Pharmaceutical Producers of India (OPPI), said the foreign direct investment would lead to upgrading of the country's skills in the sector.

"One area that needs to be re-looked at by government is FDI in both brownfield and greenfield ventures in the pharmaceutical space. India needs to upgrade her pharmaceutical skills and FDI should be looked at in this context," Shahani said.

Foreign investments will help add significantly to India's scientific capabilities and in turn expose scientific talent to global best practices and processes, all to the long term interest of India and the patient, he added.

"Capacity building and sustained drug discovery programmes, even within the domestic industry, should be seen in the longer time horizon," he said.

He added that OPPI believes that unrestricted pharma FDI, both brownfield and greenfield, is in the interest of the country and will help India in the short, medium and long term.

Currently, India permits 100% FDI in pharmaceutical sector through automatic approval route in the new projects but the foreign investment in the existing pharmaceutical companies are allowed only through FIPB's approval.

The government is contemplating major changes in the current FDI policy in the pharmaceuticals sector to protect the domestic generic industry in the wake of increasing acquisitions of homegrown companies by foreign players.


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