Analysis: Big Pharma down, not out, after Indian patent blow

Tue Apr 2, 2013 3:53pm EDT
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By Ben Hirschler and Kaustubh Kulkarni

LONDON/MUMBAI (Reuters) - Stung by a landmark patent defeat, Western drugmakers will be wary about launching new products in India, but they cannot afford to quit a country tipped to be the world's eighth largest market for medicines by 2016.

Makers of patented drugs will in future have to get more creative about doing business in India, including striking deals with local firms to sell cheaper versions of their drugs, industry experts believe.

The decision by India's Supreme Court on Monday not to allow a patent on Novartis AG's cancer drug Glivec angered but did not surprise U.S. and European drug companies, given past intellectual property (IP) setbacks.

And it is unlikely to send them rushing for the exit.

"India is too big to ignore," said Amit Backliwal, who heads South Asian operations for leading healthcare information provider IMS Health.

"Companies will definitely get cautious, and it definitely means a change in their business model, but I don't think they will pull out."

On paper, there is huge potential in India's rapidly growing $13 billion-a-year drugs market, which is driven these days by chronic diseases such as diabetes as well as infections.

So far, though, it has failed to become a money-spinner for the world's top pharmaceutical companies, despite a new law in 2005 allowing drug patents for the first time.   Continued...

A man buys cancer drug Glivec for a relative who is suffering from cancer at a pharmacy in a government-run hospital in the western Indian city of Ahmedabad April 2, 2013. REUTERS/Amit Dave