Drugs worth about Rs 3,000 crore (Rs 30 billion), representing around 15 per cent of the domestic pharmaceuticals market, are set to come under patent protection beginning 2005.
This essentially means that generic versions of these drugs being sold in the domestic market will have to be withdrawn.
The government has announced the introduction of product patent regime from January 1, 2005 through the Patent (Amendment) Ordinance.
Government officials have indicated that nearly 12,000 applications have been filed for patents. The 'mailbox' containing these applications will be opened by government authorities on January 1. There is, however, no clarity on the grant of compulsory licences at this juncture and conditions under which such licences will be granted.
D G Shah, secretary general of the Indian Pharmaceutical Alliance, said: "While the long term impact would be seen in terms of increased investment in research and development-related activities, complex patent-related litigations are expected in the short term as the patent office starts examining and granting patents after the rules are notified."
The immediate impact on multinational drug firms, according to analysts, may not be significant as they will not be in a position to introduce patented products in India immediately in the beginning of 2005.
This is because WTO provisions mandate that only those drugs, which have been invented post January 1, 1995, will be eligible for product patents in India.
Considering that average time taken for drug development is about 10-12 years, such drugs are unlikely to be commercialised (in the international markets) before 2006.
"Since MNCs will have to take permission from the Indian drug authorities for introduction of any new product, the earliest launch of a patented product in India can be by late 2006," said a pharma analyst based in Mumbai.
There may be exceptions to this norm if a particular drug enjoyed the benefit of fast-track approval (like Novartis' Gleevec), he added.
As far as the domestic industry is concerned, drug makers have been readying themselves to remain competitive in a product patent regime.
While an enhanced focus on R&D has been the key strategy of companies like Dr Reddy's, Ranbaxy Laboratories, Glenmark Pharmaceuticals, Sun Pharmaceuticals and Lupin, strategic marketing alliances and manufacturing capacity expansion have been growth strategy adopted by companies like Nicholas Piramal and Elder Pharmaceuticals, among others.
Industry observers also say that inadequate infrastructure in terms of granting of patents and functioning of patent offices in India are a major cause for concern. This may act as a major hindrance for the smooth functioning of the product patent regime.
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