India Kicks the Habit; Local Drugmakers Have Built a Thriving Industry on Pilfering Patents. the Party Ends in January

By Singh, Seema | Newsweek International, November 22, 2004 | Go to article overview

India Kicks the Habit; Local Drugmakers Have Built a Thriving Industry on Pilfering Patents. the Party Ends in January


Singh, Seema, Newsweek International


Byline: Seema Singh

When Anglo-Swedish drug giant AstraZeneca launched its anti-ulcer drug Losec in 1989 in Europe and the United States, it was an instant blockbuster. Before the company had a chance to sell the drug in India, however, local firms had already flooded the market with cheap generics. In 1990 Dr. Reddy's Laboratories (DRL) in Hyderabad, the country's second-largest drug company, introduced Omez, a Losec knockoff, for 13 cents a tablet, and soon other Indian companies had joined the race, driving the price down further. Today Omez is DRL's flagship drug, accounting for 3 percent of its $440 million turnover. AstraZeneca, which had invested millions in developing the drug, never bothered trying to compete.

There's hardly a multinational drug company in the world that couldn't tell a similar tale. The reason: India's patent system offers virtually no protection for new drugs, and its pharmaceutical companies are among the best in the world at producing knockoffs. But soon the free ride will be over. On Jan. 1, a new patent law is expected to bring India in line with other countries in the World Trade Organization. That will mark the end of three decades of market protection that has allowed Indian firms to concentrate on low-cost manufacturing without having to pay for new-drug research. The change is already forcing India's drug companies to bolster R&D to better compete with the big multinationals. And it spells an end to quick and cheap genetic drugs for consumers in India as well as its export markets in the Middle East, Asia and Latin America.

India's patent freeloading began back in 1972, when Parliament granted patent rights only to manufacturing processes, rather than to the end products themselves. Indian pharmaceutical firms were able to take new drugs developed abroad, reverse-engineer the manufacturing process and begin churning out generics. The drugmakers thrived. Local firms went from controlling 30 percent of the Indian drug market in 1972 to 75 percent today. Developing-world consumers, and even some in Western markets, enjoyed the benefits of low prices and the quick introduction of the latest wonder drugs, created and tested at others' expense. Today India exports generic drugs to 200 countries.

Drugmakers won't feel the pinch for about two years, thanks to a full pipeline of pilfered generics. But the change is already reverberating through boardrooms and research labs. Starting in January, if Glaxo-SmithKline, say, should come out with a new drug, it will be available in India only when Glaxo launches it--at a price set by Glaxo. Lawmakers reckon that $650 million worth of the local generics market will vaporize in a few years. "It's a big event," says Satish Reddy, DRL's managing director.

In anticipation of the Big Bang, the larger Indian drug companies have pushed hard to increase their share of the U.S. and European generics markets, challenging patent holders in the courts. At the same time they've sought alliances with many of the same firms they were suing. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

India Kicks the Habit; Local Drugmakers Have Built a Thriving Industry on Pilfering Patents. the Party Ends in January
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.