Page 197 - DMGT401Business Environment

Business Environment

Notes Hike in prices: The hike in cost because of patent will depend on how much more can the
patentee charge of his patented drug.

Did u know? To develop and clinically test a new drug, it costs around $500-600mn and
about 12 to 13 years for any MNC.
There will naturally steep hike in prices for the drugs totally new to the world and for which no
alternative currently exists. Patentees seek to maximise global profits and this will certainly
drive prices of patented products skywards. Prices of new generation drugs for AIDS and Cancer
are going to be very high. As Cipla offers a year's dosage of AIDS drugs at $600
( 26,400) compared to $ 12,000 ( 5,28000) of a branded manufacturer. But the prices of new
generation of drugs for AIDS and cancer are certainly going to be in lakhs.

The picture is not all that grim, though. As 97% of all drugs manufactured in India are off patent
and there will be no impact on them, but for the remaining 3% drugs which can be patented,
there are methods and various alternatives that the government can use to ensure their availability
at affordable price. Market forces also play a decisive role in determining prices. In the next four
years drugs worth $50 billion will go off patent. It is a sign that when in coming years prices of
new and patented drugs will be sky high the prices of drugs which will go off patent will come
down every year.

Effectiveness of Compulsory Licenses: Compulsory licences in the new patent bill are not very
effective. According to it, with the exception of national emergency, extreme emergency or
public non-commercial use, a compulsory license is available only after three years from the
date of grant of the patent. Clear and effective grounds for the issue for a compulsory license
have not been provided in the legislation. The procedural requirement to issue a compulsory
license is too cumbersome and does not provide any strict time frames for the conclusion of the
process. There is no ceiling on the remuneration payable to the patent holder, which will
inevitably lead to demands for excessive royalty and unnecessary litigations.

8.2.4 Opportunities/Benefits of the New Patent Bill

The new patent bill is a sea of opportunities. It brought numerous business opportunities for the
Indian pharmaceutical industry and the industry reaping benefits from it. When India joined the
WTO eleven years ago, its pharmaceutical exports were less than 4,000 crore. A decade later, its
exports went up to worth rupees 14,000 crore. There are ample opportunities now because over
the next few years, drugs worth $ 60 billion are going off patent and one can grab a lion's share
of these off patent drugs.

Notes Patent Status of 10 Blockbuster Drugs

Drug Year Innovator
Zitromax 2005 Pfizer
Prevacid 2006 Takeda
Zocor 2006 Merck
Pravachol 2006 Bristol Myers Squibb
Zoloft 2006 Pfizer
Paxil 2006 GlaxoSmithkline
Norvasc 2007 Pfizer Contd...
Risperdal 2007 J&J
Effexor 2008 Wyeth
Lipitor 2010 Pfizer
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