1. Emerging Market Environment in the Indian Pharmaceutical Industry after TRIPS Sudip Chaudhuri Indian Institute of Management Calcutta Roundtable Symposium on: The Emerging Legal and Policy Landscape of Intellectual Property Protection for Pharmaceuticals in India 17 and 18 March, 2012 National Law University, Jodhpur

2. Pharmaceutical Industry in India Product patent regime: –Till 1972 No product patent protection –1972 to 1995 (2005) Again product patent regime –Since 1995 (2005) 2

3. Situation till 1972 Litigation – patent infringement cases to prevent the Indian firms from manufacturing Underdeveloped industry, import dependence MNC domination Monopoly and high prices 3

4. Situation after product patent abolition Rise and growth of the industry Self sufficiency and export surplus Competition and low prices Indian domination No litigation 4

5. Post-TRIPS: Some implications M&As and tie-ups and rising MNC share Manufacturing Imports Exports R&D Market structure and prices 5

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9. 9 No Sales 2010 Rs million Sales 2010 (%) New drugs after 199518047266.639.1 Patented post 1995515999.511.2 Patented pre 19956721732.004.2 Patent expired6219535.123.8 Total pharmaceutical market520525.60100.0

10. Trastuzumab (Herceptin) (Roche) Rs 135200 50 mg inj Lapatinib (Tykerb) (GSK) Rs 4467, 250 mg, 1 tab Ixabepiline (Ixempra) (BMS) Rs 66430, 45 mg, 1 inj Dasatinib (Sprycel) (BMS) Rs 3905, 70 mg, 1 tab Sunitinib (Sutent) (Pfizer) Rs 8714, 50 mg, 1 cap Etanercept (Enbrel) (Wyeth Rs 15761, 50 mg inj Patent protected monopolies in anti-cancer drugs (December 2010) 10

11. Cost of treatment (per person per year) Dasatinib (anti cancer): –Price Rs 3905, 70 mg tablet –Cost of treatment Rs 2 million (100 mg daily) comparable to UK price of GBP 30,477 suggesting no differential pricing 11

12. Exports Spectacular rise in exports But the prospect of huge gains in the patent expired markets in developed countries particularly in USA have not materialized –Significant price erosions –Value added markets increasingly difficult Some companies which have aggressively pursued growth in foreign markets with high costs and stakes have not always succeeded 12

13. R&D for new drugs R&D activities have diversified But Indian pharmaceutical firms are yet to prove their competence in innovating new products No NCE has yet been developed for marketing – neglected diseases neglected There have been several setbacks and the partnership model has not always worked properly What Indian companies have really demonstrated is the ability to develop generics – an ability which they acquired and improved during the pre-TRIPS period. 13

14. Policy focus Initial optimism of Indian generic companies have not really materialized –Required space of operations of generic companies Compulsory licensing Interest in and importance of Section 3(d), patent pool etc should not divert attention from the fundamentally important task of having a user-friendly CL system Limit data protection Price control South-south collaboration for innovation 14

15. For comments sudip@iimcal.ac.in