[Commons-Law] A loose drug policy? Why not? (Shishir K Jha)

[Hasit seth]

Dear Shishir,

     I have no problem accepting your position that forcing India and
other developing countries to accept standards of western world in
fields such as medicines (also in environment, safety, etc) is unfair.
 This makes it a geo-political and economic issue as to why should we
accept western dictates.  Fine.

    However, there are few problems.  

First, the above concerns lead only to a deductive conclusion that it
is an unfair world.  That doesn't help India's future much except at
international forums like WIPO and WTO where political and economic
issues figure in bargaining.

Second, if other countries had about 100 years of "loose" IP regimes
which enabled them to develop a medical research base before accepting
product patents on drugs then it has to be seen that these 100 years
begin roughly around 1870s.  Starting off from the level of medicinal
chemistry knowledge in 1870s is vastly different from India's
situation where we installed a "loose" IP regime in 1970s.  In short,
as a late entrant we had quite a significant body of knowledge
available to build upon.  But that will not satisfy the argument that
why introduce product patents now? and why at the insistence of WTO or
the west? As I said answers to these questions do not help much in
creating a medical research base because they just lead to denial and
status-quo.

Third, you wanted some statistics to support what I was trying to say
about developing a research base and need for more investment in
research.  A report from India's Union Ministry of Chemicals and
Petrochemicals http://chemicals.nic.in/pharma1.htm  has some numbers
and observations.  Under the heading "II. R&D in Pharma Industry" it
goes on to say:

"Investment in R&D by industry as a whole in India has been low, only
around 0.6% of the turnover. In the Indian pharmaceutical industry the
average R&D expenditure is around 2% of the turnover contributed by
around 150 companies. The low investment in R&D is due to the low
levels of profitability and comparatively small size of the companies.
However, the scenario is now changing. Some pharma companies now spend
nearly 5% of their turnover on R&D. In addition to R&D in industry,
substantial pharma related R&D is carried out in publicly funded
research organisations, mainly by the laboratories of Council of
Scientific & Industrial Research (CSIR), Indian Council of Medical
Research (ICMR), around 25 universities and a few pharmacy colleges."

There is a table about R&D spends there which shows that R&D spending
in 97-98 was 220 crores (2,200 million Rs).  How much of this was
claimed due to tax-breaks for R&D, analytical chemistry tinkering for
existing medicines etc, cannot be found out easily.  Plus, it is only
in recent times that companies are increasing R&D spend to 5% of their
turnover, why only now? is it because competition, exports and product
patents are now more relevant than ever?

Under heading "VII. New Drug Development" the FIG. 1 shows Indian
costs for a new drug development which is estimated at 140 crore and
needs around 11 years of time.  That is a lot of time and also money. 
Forget about a multinational, but an Indian company or a government
lab spending that kind of money and time will want some returns and
security for those returns.  If we reject product patents (well they
are a reality now, so rejecting is a hypothetical issue) we need an
alternative mechanism to help companies/bodies recover money spent on
R&D. And what about the risky drug investigations that may prove to be
unviable at the very last clinical trial or after say 1 month of
launch?

Fourth, there is nothing sacred about a product patent on drug or for
that matter any patent.  Patents are a policy to promote R&D and yes
capital accumulation too.  If there is an alternative policy that
promotes R&D, then let's apply that.  Patents have proved as a useful 
though an imperfect policy in countries that have built an effective
R&D base, industry, competition and consumer markets and hence such
countries have supported patents.  Let us also try this out, if it
doesn't work then some other policy can be used to promote R&D,
investment and competition.  Not having product patents for last 35
years in medicine hasn't exactly done wonders to medical R&D in India,
so there is no harm in trying them out when the industry is somewhat
mature to handle it.   The aim of an innovation and invention policy
in India should be to let technology, industry and markets grow as
much as possible because without it would be hard to tap the energies
of a billion plus population.  Thank you for your very insightful
comments and discussion.

Regards,
Hasit

On 4/20/05, commons-law-request at sarai.net <commons-law-request at sarai.net> wrote:
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> Today's Topics:
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>    1. A loose drug policy? Why not? (Shishir K Jha)
>    2. SC/ST Act: The brutal letter of the law (Shivam Vij)
> 
> ----------------------------------------------------------------------
> 
> Message: 1
> Date: Tue, 19 Apr 2005 19:51:32 +0530 (IST)
> From: "Shishir K Jha" <skjha at iitb.ac.in>
> Subject: [Commons-Law] A loose drug policy? Why not?
> To: commons-law at sarai.net
> Message-ID: <3966.10.127.133.110.1113920492.squirrel at gpo.iitb.ac.in>
> Content-Type: text/plain; charset="iso-8859-1"
> 
> Dear Hasit,
> 
> It appears to me that is I who is providing very specific arguments about
> the drug industry supported obviously with conceptual views rather than
> merely invoking general anti-west tirades.
> 
> I am sorry but as far as specifics are concerned [or even generalities are
> concerned - but that comes later] I am not really satisfied with your
> response.
> 
> You have not really answered a host of questions that people living in
> developing countries must contend with. After all the political realities
> in global institutions are not a fanciful imagination of those who love
> perhaps to engage in some fashionable anti-west bashing. If you feel any
> criticism of global political economy coming from developing countries is
> really so shallow then I would contend that you end up merely re-inforcing
> the "liberal" western bias. A bias which goes something like this - let us
> with our "best" and most "benevolent" intentions create a set of new
> global regimes in place and the world should benefit in following such
> proposals and if they disagree aren't they really spoil sports or even
> better pirates who thieve off our property rights.
> 
> As I raised earlier, the specific question of why should India have to
> contend with only 35 years of process patents while the rest of the
> developed world had over a 100 years of "loose" policy needs to be very
> specifically answered.
> 
> You also state rather generally: "... innovation, invention and investment
> in innovations are systematically ignored [in developing countries]."
> Please provide specifics in terms of actual resources available and the
> unwillingness of these countries to use them. Your view is contrary to
> much evidence one sees in many different areas of technological growth.
> 
> An important point: I have no where "as yet" in my arguments opposed
> product patents, which you seemed to have assumed. The crucial question is
> who gets to decide [i.e., who is included in such a decision and who is
> excluded both at the national and the international levels].
> 
> regards
> Shishir K. Jha
> 
> > ----------------------------------------------------------------------
> >
> > Date: Mon, 18 Apr 2005 11:04:22 -0400
> > From: Hasit seth <hbs.law at gmail.com>
> >
> > Dear Shishir,
> >
> >      The western world's hypocrisies are all too well known.  The farm
> > export subsidies, the multi-fibre quotas agreement, etc., are all
> > symptomatic of the western world protecting their advantages.
> > Considering these policies, it even more important than ever to
> > develop a domestic research base and an industry and market that uses
> > products of such a research base.  It is not a fascination that new
> > drugs should be developed in India, but a real need for building a
> > vast medical research base when future problems can pop-out anytime
> > unpredictably (HIV being a recent example).
> >
> >     Technology related debates in India and third world tend to be
> > anti-west and then end at that.  Under the cover of anti-west,
> > david-vs-goliath, alarmist-doomsday prophecies, historical economic
> > deprivation, social problems, etc., and other such arguments and
> > policies based on such arguments, innovation, invention and investment
> > in innovations are systematically ignored.  Ironically, a lot of these
> > problems can be solved through technology.  Opposition to product
> > patents in drugs is powered by such arguments, which will ultimately
> > lead to stilted development of a modern medical research and
> > industrial base.
> >
> > Regards,
> > Hasit