Preface
The Pharmaceutical Industry in India has experienced implausible development. The Indian Industry has been able to formulate all essential drugs covering a wide range of therapeutic groups. The industry also has the potential of producing adequate amount of bulk drugs for worldwide export. Patents in pharmaceuticals play a significant role in bringing new products to market. Patent protection for pharmaceutical products is more essential in contrast with other industries because the actual manufacturing process is easy to imitate and can be replicated with a merely small investment than that required for the research and clinical testing.
Indian Law & Trips Compliance
Patent Act of 1911 facilitated patenting all the known processes of manufacturing a drug. Later Patent Act of 1970 excluded patent protection for pharmaceutical product and allowed granting of patent for only one process or method used in the actual manufacturing for a period of 7 years. This act provided Indian manufacturer the benefit to make patented drugs by other method and market them in India. The scenario again changed when India being a signatory to WTO was obliged to comply with the provisions of TRIPS to incorporate product patent. Additionally, with this agreement, the patents will provide the rights of protection for 20 years. For developing countries including India, a transition period of 10 years from 1995 to 2005 was provided to integrate the laws. In this view, India introduced "mailbox" provision so as to provide inventors a means of filing applications for pharmaceutical product during the transition period and which will be examined upon termination of the transition period. Further, Exclusive Marketing Rights were granted for a term of 5 years in the transition period. Thus, the mailbox provision permitted Indian applicants to file for patents and thereby establish filing dates, while at the same time allowed India to differ the granting of patents for pharmaceutical products. Still, another concern was regarding the availability of drugs in poor countries. This issue was addressed by introducing compulsory licensing as a requirement laid down under Doha declaration of TRIPS Agreement. Compulsory licensing of pharmaceutical products allowed member countries to issue compulsory license to export generic versions of patented medicines to countries with insufficient or no manufacturing capacity in the pharmaceutical sector. In developing country such as India, compulsory licensing is probably the most effective safeguard against the potential abuse of monopoly by patentees.
Current Scenario
Due to legal and regulatory changes in the Indian pharmaceutical industry, pharmaceutical companies have adapted well and have evolved as globally competitive companies. Indian companies have continued to invest extensive resources in the development of generic drugs thus establishing themselves as leaders in the global generics business. Today Leading global pharmaceutical firms are confronting difficulty as a major number of patents for branded drugs will be expiring over the next few years. Generic drugs are 40 to 75 percent cheaper in costs as compared to patented drugs and provide higher profit than branded drugs. Once the patent expires, each product's individual characteristics and market position will affect its market share. Consequently Indian pharmaceutical companies have the opportunity to gain a larger share of the growing generics market.
Indian Statistics
IP scenario of Indian Pharmaceutical Industry has changed significantly since 1st January 2005. The innovation capability of the domestic pharmaceutical industry has witnessed an increase in both, research and patenting. The number of patent applications filed in the Indian Patent Office has consistently increased with annual growth averaging 9% per annum from 2005-2010. Over the entire period a total of 16459 applications in Drugs have been filed. The leading players in the Indian pharmaceutical market comprise both India-based and MNCs. Top 10 Assignees who have been granted maximum number of product patent by Indian Patent Office during 2005-2010 includes Aventis Pharmaceuticals (190 Patents) followed by Roche (146 Patents) and Novartis (136 Patents). India's leading pharmaceutical companies are competing not only in the domestic market, but also in the global market for both generic drugs and original products. India's top five pharmaceutical companies, who have been granted majority of product patents from 2005-2010 are Glaxo, CSIR, Dr. Reddy's, Cipla and Cadila. These companies manufacture a wide range of generic drugs (branded and non-branded), intermediates, and active pharmaceutical ingredients (APIs).
Conclusion
The change in pharmaceutical patent system became precursor for variation in industry dynamics. The changing industry dynamics both at the domestic level as well as the international level has forced the pharmaceutical players to reevaluate their conventional business strategies. India with its essential competitive advantages remains as one of the most preferred outsourcing destinations and now is playing a vital role in manufacturing as well as drug development chain of various innovator companies.
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