From price-led to IP-led innovation

India’s 66th Independence Day was overshadowed by political bickering and economic turmoil as the rupee’s valuation to the dollar and other major currencies like the British pound plunged. Growth in all emerging nations is slowing, perhaps a sign of the inevitable maturing of these markets. The US, the UK and the EU economies appear to be stabilising though they are not out of the woods as yet.

But looking to India’s next I-Day, when we will have another set of leaders at the centre, can we expect them to do a better job? Pre-election, there is the usual spurt of eagerness to please all stakeholders, with a spate of promises. Post election, the promises turn to dust. Therefore, the best time for a nation’s citizenry to test the worth of its politicians is in the pre-elections wooing period.

Thus, we have a golden opportunity to re-set political priorities and one of these is to catapult healthcare to the top of the political agenda. If US President Obama will always be judged by the success of healthcare reforms, so much so that it has been dubbed Obamacare, what stops Indian politicians from championing this cause in India?

Healthcare and its associated sectors like pharmaceuticals, hospitals and medical devices, have not captured the imagination of our political bigwigs. It is only when the policy paralysis is perceived to impact global sentiment that the Prime Minister steps in; the most recent example being when he cleared Mylan Inc’s takeover of Agila Specialities, overriding fears of the Department of Industrial Policy and Promotion (DIPP) that manufacturing facilities of crucial drugs should remain under Indian ownership. But, there is still a huge question mark on foreign direct investment (FDI) in brownfield pharma facilities.

In fact as India ages, these sectors will become even more critical. Prof David Taylor, of the UCL School of Pharmacy who has co-authored a recent report, ‘Health and Health Care in India: national opportunities, global impacts’ was in the country to launch this report and made a very pertinent point when he said that for policy makers, the short term overwhelms the long term, especially with an election around the corner. The cover story in this issue, ‘Gearing up for future’ gauges the reactions of industry stalwarts to these policy changes. The mood may not be upbeat but Ranjit Shahani, Vice Chairman & Managing Director, Novartis India sums it up best when he says, “There is too much at stake to give up the future for the present.”

Among other conclusions, the UCL report suggests that half a century after the 1970 Patents Act, a ‘re-modernised approach to intellectual property (IP) law might mark the beginnings of the country’s rise as a post transitional community.’ This might be a tough transition to make right now, with posturing taking precedence over clear thinking. For India, IP at present is a black or white issue, with no shades of grey. The pendulum seems to have swung from one extreme to the next, and fears of a backlash subdue the saner voices urging an equilibrium.

But extending this argument, Indian Pharma Inc already seems to be moving away from competing on price alone. The generics-only model of growth is waning as countries like Sri Lanka and others in South Africa designate medicines as ‘priority import substitution’ sectors. As our traditional customers for affordable generics climb the same ladder that India has ascended in the past decades, Indian pharma companies should graduate to the next level: from price-led to IP-led innovations. Some of them do have their own molecules in various stages of R&D but how many more I-Days will we have to wait for this tryst with destiny.

Viveka Roychowdhury
Editor

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