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Abstract
Why is sufficient patent protection in India and China
important? Firms in these countries are important
suppliers of low – priced API’s and increasingly
finished products domestically, to developing countries
and to the West (India). So there has been a fear that
the introduction of product patents will destroy these
industries and lead to increased drug prices in the
importing countries. But the impact of the changed
patent regime is much broader: besides access to new
medicines in India and China, changing IPR is
influencing the business strategies of Indian and
Chinese firms and their incentive to invest in R&D in
order to move up the product / market hierarchy.
Furthermore Western MNC’s operating in those countries
(may that be by selling their products as well as by
investing in a local presence in either R&D or
manufacturing operations ) are highly affected. The IPR
situation in China is still perceived as “tricky”. MNC’s
are further establishing or expanding their presence in
China allowing them also to test the conditions of the
market and establish relationships for the future. Many
of the local engagements will remain focussed on
discovery research activities, avoiding projects that
are from IPR standpoint considered “sensitive”. Quite
some companies are still reluctant to bring those
projects to China.
India API manufacturers provide evidence that confidence
is building that pharma companies are now bringing more
sensitive projects to India. However, India still has a
reputation of relatively weak IPR protection.
While perceived as an issue, IPR protection is a
decreasing barrier to offshoring R&D activity. In
particular these kind of R&D activities to be offshored
which are in focus of this article, i.e. chemical and
pharmaceutical development, are generally less affected.
To make it illustrative: upscaling and optimizing an API
manufacturing process for a NME, formulation
development, analytical method development and
validation as well as running analytical stability
studies are all activities which typically happen in a
late stage of the R&D process long after completed
patent protection of a new molecule. Furthermore,
generally they are less related to IP origination. Based
on the information available in public domain and also
on personal knowledge, up to now, there haven’t been any
IPR issues or violations occurred across industry. The
author believes that with proper contractual agreements
in place and careful selection of a vendor (reputed),
this danger may be effectively managed. One may have to
understand that for major pharmaceutical firms
(especially in India), who are putting lot of efforts
for establishing themselves as a significant players in
international pharma market, infringing on the
intellectual properties of the customer is not in the
best interest of the service provider.
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