Pharma R&D aided by WTO, say experts

With India gradually becoming the global R&D and production hub for many big pharma companies due to low cost of production, availability of knowledge workers and natural resources, the new Patent Act 2005 which is in line with India's WTO obligation is going to go a long way in protecting the interests of the common man, feels experts.

Speaking at an interactive session on the Role of Intellectual Property Rights in the Pharmaceutical Industry, S K Mitra, Assistant Controller of Patents & Design at the Patent Office in Kolkata, said “The patent act, modified in 2005, would go a long way in protecting domestic innovation and technology, which is the backbone of this industry, more and more companies have started to seek patents, last year, around 32000 applications for patent application had been filed all across India and around 15000 patents were granted by the four patent office all across India, taking into consideration the previous filings also.”

Of this 15000 granted patents, around 15 percent was in the pharma sector alone, he mentioned.

Although Mitra failed to provide the total number of applications filed this year, he said, ”The number is going to significantly rise with the Act in place and the India government making it easy to obtain a patent within one year if no objection is found.”

Sajal Kumar Roychowdhury, director of drugs control of the government of West Bengal, took up another cause with regard to the tax benefits and sops made available to only a hand few drug manufacturers who have production facilities inside designated tax-free zones.

Roychowdhury said that manufacturers which had production facilities inside tax free zones could enjoy the benefits but in contract manufacturing outsourced to India, foreign companies gained more.

The Rs 68,000 crore India pharmaceutical industry was heavily taxed with eight per cent excise duty and the four per cent central sales tax levied on drug companies not in designated tax-free zones.

There was need to have a level playing field for small and medium players losing out as they were not in tax-free zones and could not afford capital intensive projects while bigger companies and contract manufacturers could use these options, said Roychowdhury.

Several big pharmaceutical companies recently set up facilities in tax-free zones such as Baddi in Himachal Pradesh, Uttarakhand, Jammu and Sikkim.

Bengal at present had no tax free zones and the 160-plus drug producing companies in the state were under the heavy tax regime.

The state government had appealed for tax free zone status for North Bengal but in vain, said Roychowdhury. In line with its WTO obligations, India had adopted the product patent regime for food, drugs and chemicals and embedded software with adequate safeguards from 2005. India, Brazil and China were among developing countries which worked on the deadline of 2005 to meet Trade Related Intellectual Property Rights (TRIPS) commitments.