Drug Majors Anticipate Final Approval for India's Patent Reform

The multinational drug sector continues to await India's patent law reform, which could substantially boost the companies' local research activities and product offerings on implementation. Authorities have already earmarked US$10.3mn to upgrade patent offices in four major cities. However, observers expect the government to seek wider support for new patent legislation, as its Marxist coalition allies still oppose the measures. Although the new WTO-compliant patent framework was enacted by decree on December 26, the law still awaits approval by India's parliament.

Nevertheless, the multinational sector is gearing up for significant expansion in India, where industry bodies expect drug sales to double to about US$10bn over the next few years. Although the world's fourth-largest pharmaceuticals market by volume, revenues have historically been a fraction of those in Western countries, due to generic medicines' strong local market share.

US drug major Eli Lilly has now claimed that it will offer its full product line in the country, including its leading antidepressants line, as the threat from generic competition diminishes. Meanwhile, Switzerland's Novartis has also pledged to introduce its cardiovascular and cancer drugs when the law is finally approved. US drugmaker Merck & Co. also expects to return to the country this year.

Industry studies indicate that R&D spending in India could rise from US$1bn to US$6bn by the end of the decade, as the local sector becomes increasingly research-focused. Typifying this trend will be UK-based drug major GlaxoSmithKline, which hopes to expand local research partnerships beyond its existing arrangements with leading local drug producer Ranbaxy. Assuming that the new patent framework is approved and effectively implemented, the multinational sector's local market share should grow from the current 25% to roughly 40% by 2010, in a market that is set to become increasingly lucrative and developed.