KAMAL NATH ADDRESSES INTERNATIONAL CONFERENCE ON PHARMA

INDIAN PHARMA COMPANIES FULLY EQUIPPED FOR NEW PATENT REGIME, SAYS KAMAL NATH ADDRESSES INTERNATIONAL CONFERENCE ON PHARMA

Date : 01 Feb 2005
Location : New Delhi

Shri Kamal Nath, Union Minister of Commerce & Industry, has said that the Indian pharmaceutical companies are poised and fully equipped to take advantage of the US $ 50 billion worth of drugs going off patent in the next five years after introduction of the new patent regime. "We’ll grab a major share of this", he said in his address at an international conference organised by the Royal Institute of International Affairs at Chatham House, London, last evening. The theme of the Conference was the pharmaceutical industry in the 21st century and whether India is challenging the conventional R&D business model.

Shri Kamal Nath told the large gathering that India presented an ideal confluence of five factors viz., (1) cost-effective manufacturing; (2) well-developed chemical industry infrastructure; (3) strong vertical integration (from bulk to formulations to packing); (4) abundant scientific talent & technical skills; and (5) unique synergy in fields of IT, biotech & medicine. "Time is, therefore, ripe for a quantum leap. Our objective is not only to manufacture drugs, but also to make India a hub for medical research and clinical data management", the Minister said.

The pharma industry in India is a $ 10 billion industry. India has 300 pharma companies of large and moderate size and another 10,000 small and tiny firms. But 70% of the production is by the top 100 larger companies. The industry manufactures about 400 bulk drugs and almost the entire range of formulations. About a third of India’s production – close to US $ 3.5 billion – is exported and exports are growing at 25% per annum. Half a billion dollars worth of exports are to the US alone, while Germany, Russia, the UK, Canada, Italy and Japan are among others. Large quantities of medicines are also exported from India to China, Brazil, Nigeria and Mexico, Shri Kamal Nath informed the large audience. But he also pointed out that: "While the statistics do reveal that India has a huge drug industry (8% of the world’s drugs are manufactured in India) – it also becomes apparent that the financial realisations are not commensurate with the size. This means that while we are getting paid for the actual stuff, there is no financial realisation for the ‘intellectual property’ value behind the formulations – and in the drug industry it is this intellectual property value that constitutes the huge margins".

"In the 21st century, the pharmaceutical value chain would depend on the ability of pharmaceutical companies to make the technological shift necessary to maintain their competitive positions. India provides not just the possibility – but the unique & tangible opportunity for international pharma firms to make that desired ‘technological shift’ – in process, and (more literally) in location! The question before Pharma Company CEOs the world over today is not: ‘Should my company go to India?’ but ‘Can my company afford not to go to India’?", Shri Kamal Nath said.