Biotech Values

[DewDiligence]

Drugs and Delhi

http://online.wsj.com/article/SB118790188174407022.html

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August 24, 2007

India's weakened drug-patent law has claimed its first victim: Novartis. The Swiss-based drug company this week declared that it wouldn't invest any more in research and development in the country because it couldn't be sure that its patents would be respected. If Delhi doesn't close this regulatory loophole, more investment and jobs will head abroad -- surely not good for India's workers, or its patients.

Novartis is reacting to a Chennai court ruling earlier this month that upheld a clause in India's 2005 Patent Law. Known as Section 3d, it allows Indian regulators to block patent applications for certain kinds of drugs if they don't demonstrate advances in "efficacy." Novartis argued that many innovations are incremental, not great leaps, and that the clause was meant to prevent foreigners from patenting their innovations -- and competing with local companies. The Chennai court said the case was theoretically actionable under World Trade Organization rules, not the Indian laws, and deferred it to Geneva.

We don't fault the court for its ruling; the WTO is the right forum in which to air this dispute. Yet it is fair to ask why India's policy makers aren't more concerned about a decision that effectively says to international companies: Don't come to India because your work won't be protected from copycats. That kind of thinking is what the 2005 Patent Law was supposed to correct.

Perhaps India's legislators are taking comfort from Thailand's anti-intellectual-property experiment, where the military junta has gone a step further and seized foreign drug makers' patents without any appreciable consequences. Just this week, Bangkok announced that it would import Plavix, a heart drug invented by Sanofi-Aventis and Bristol-Myers from -- wait for it -- India. When one company, Abbott Laboratories, took a principled stand and pulled out of Thailand, nongovernmental organizations such as Oxfam and Doctors Without Borders beat up the firm so badly in the press that Abbott crawled back in.

India's drug industry doesn't need protectionism. The country already boasts a raft of top-class pharmaceutical companies, including Dr. Reddy's and Nicholas Piramal. That said, India's most innovative scientists may be driven away if the fruits of their work are not safe. Why not entice them to stay by protecting their inventions -- which ultimately, through better drugs, benefits the Indian people?
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