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Novartis sees India lagging China in drug R&D http://today.reuters.com/summit/summitarticle.aspx?type=summitNews&summit=HealthSummit06&storyid=2006-11-07T165747Z_01_N07405657_RTRUKOC_0_US-SUMMIT-NOVARTIS-INDIA.xml
Tue Nov 7, 2006
By Ben Hirschler
NEW YORK (Reuters) - Weak patent protection means India risks falling behind China in drug discovery, the head of corporate research at Novartis AG (NOVN.VX: Quote, Profile, Research) said on Tuesday.
The Swiss drugmaker this week announced plans for a $100 million research and development (R&D) center in Shanghai, which will focus on basic scientific research into the infectious causes of many cancers.
But Paul Herrling told the Reuters Health Summit in New York that Novartis was wary of committing to a similar research operation in India due to inadequate patent laws, despite India's strong track record as a center for pharmaceuticals production.
"It (the law) is not where we would like to have it. It is not quite at the same level as the other countries that have good patent protection," he said in a telephone interview from Shanghai.
Novartis recently reached a provisional agreement to acquire land in Hyderabad, India, but Herrling said his company's work there was likely remain focused on drug development, such as the conduct of clinical trials, rather than basic discovery.
"In India, we are a little bit more careful and we do not assume in the short-term that we will have a drug discovery center as we are planning now in Shanghai," he said.
Western drugmakers view both China and India as long-term sales drivers, at a time when growth in the United States and Europe is flagging due to mounting pressure on prices and a lack of new medicines emerging from research labs.
Novartis is currently embroiled in a legal battle to enforce its patent on blockbuster cancer drug Glivec in India, after a court in January rejected its patent application.
The dispute has minimal commercial significance because 99 percent of Indian patients are entitled to receive the drug free of charge under a Novartis compassionate use program. But Herrling said it was a matter of principle that highlighted the deficiencies of intellectual property protection.
Despite new patent laws, amendments mean India still does not comply fully with the requirements of the World Trade Organization's treaty on Trade-Related Aspects of Intellectual Property Rights (TRIPS), he said. "Clearly, for the generics-based industry it is not a problem. But for the research-based and innovative industry, this will be a disincentive to do R&D in India," Herrling said.
"China doesn't have any amendments -- they have taken the WTO as it stands and TRIPS as it stands."
There is a growing clamor for change inside India's pharmaceuticals industry as well.
"Interestingly, our strongest allies are now some of the companies like Dr. Reddy's (REDY.BO: Quote, Profile, Research) and Ranbaxy (RANB.BO: Quote, Profile, Research) that used to be pure generic companies who have decided to go on a more innovative, research-based business path," Herrling said. "They are the first ones that need a solid patent law, otherwise they will not recover the investment in their research."
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