Source: Financial Times
24 Feb 2014
Novartis has urged US and European governments to “apply pressure” on India to respect intellectual property and warned New Delhi that its stance on patents is deterring investment.
Joe Jimenez, chief executive of the Swiss drugmaker, urged India to follow China’s example and embrace strong IP rights as a way to develop its economy.
“India is a big, important growing market but it is not a place to do research and development,” Mr Jimenez told the Financial Times. “If you do not have strong protection of IP, you cannot invest in . . . medical science.”
The Indian Supreme Court infuriated Novartis last year after it rejected the pharmaceutical group’s application for a patent for an updated version of its cancer drug Glivec.
The Supreme Court verdict was one of several Indian court rulings that have overturned or rejected patents from Western drug companies, including Roche and Pfizer.
“It is important for European governments and the US to ensure that in free trade agreements India is respecting intellectual property,” he said. “Governments should apply pressure to ensure there is respect for IP.”
IP rights is one of the most sensitive issues in talks over a potential trade deal between the European Union and India and US businesses have also been lobbying for action against Delhi over alleged protectionism and patent abuses.
Several industry groups called this month for the US Trade Representative to designate India a Priority Foreign Country – a step towards possible trade sanctions.
Tensions are particularly high over pharmaceuticals. In a country where 70 per cent of medical costs are paid out of pocket by the sick, or their families, the government and courts have tended towards narrow interpretations of patent protection for costly, life saving medicines in a bid to allow wider access to cheaper generics.
Drugmakers are worried that India’s approach – including a law that sets a higher standard for issuing patents than in other countries – will become a model for other developing countries, threatening to undermine the industry’s business model in the world’s fastest growing markets.
Mr Jiminez accused Delhi, which spends about just 1 per cent of GDP on health, of using it as a pretext for boosting its generic drug industry. “It is not about access to medicines,” he said. “The Indian government . . . spends among the least on health as a percentage of GDP in the developing world.”
Despite the tough rhetoric, Novartis recently signalled an increase in investment in India when it said it would be relocating around 4,000 jobs from Europe – many to India’s southern city of Hyderabad, where it expects to move into a new campus in late 2015.
The company already has 2,300 employees in Hyderabad, a major hub of India’s generic drugs industry, working on a wide range of activities for Novartis globally, including drug development and testing, regulatory support and commercial back office operations.
Explaining its plans to scale up in Hyderabad, Novartis cited the city’s “highly educated labour pool with extensive pharmaceutical experience” as an important draw. It also said it expected India, and Hyderabad, to be a “valued partner” for Novartis global business in the future.
Rohit Malpani, policy director at Médecins Sans Frontières, the medical charity, said India was right to clamp down on “frivolous” patent claims, arguing that the drugmakers industry should focus on genuine innovation rather than fighting to extend monopolies on existing medicines. “This is not a question of India not respecting IP. They are simply trying to eliminate abuses.”