New Indian Patent Law Heralds Multinationals' Return

According to a report by US management consultancy McKinsey, the approval of India's new pharmaceuticals intellectual property legislation is likely to prompt multinationals to launch more patent-protected products. A number of companies had previously avoided launching innovative products due to the local generics sector's propensity for reverse engineering and producing such drugs, without fear of prosecution.

US drugmaker Eli Lilly plans to launch its erectile dysfunction drug Cialis (tadalafil) in India this year, and could follow with a new adult diabetes treatment, exenatide, currently under development with US biotech company Amylin. Meanwhile, assuming the new law is approved as promised, the company is to triple its local R&D spending to US$8mn, and also launch its entire existing product portfolio in the country.

Further, drug major Merck & Co is planning a return to India, after nearly two decades' absence, and fellow US company Chiron is also expanding its local operations. Local market leader GlaxoSmithKline is also to introduce one drug per year from 2007, and has pledged to expand its local research partnerships beyond an existing agreement with Indian generics major Ranbaxy. US drug major Pfizer and Switzerland's Novartis have also promised new products for the Indian market.

India's prescription drug market is currently worth an estimated US$5.5bn, with further developments of the healthcare system expected to push market value to US$7bn by 2007.