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Review Article ISSN: 0974-6943

S. Usha et al. / Journal of Pharmacy Research 2010, 3(10),2466-2469

Available online through www.jpronline.info The Intellectual Property Rights and Pharmaceutical Biotechnology in India
S. Usha* and C. Annadurai School of Social Science and Languages,VIT University, Vellore 632 014, Tamilnadu, India

Received on: 15-06-2010; Revised on: 18-08-2010; Accepted on:13-09-2010 ABSTRACT


India is one of the top-ranking countries in the field of basic as well as advanced research. Our Science has come to be regarded as one of the most powerful instruments of growth and development, especially in the emerging field like biotechnology. Pharmaceutical biotechnology is a form of biotechnology, developing rapidly. It is important to see that role of industry is for drug discovery and development and the IPR on medicines is the foundation on which the drug research is based. Intellectual property protection for biotechnology is currently in a state of flux. Whilst it used to be the case that living organisms were largely excluded from protection, attitudes are now changing and increasingly biotechnology is receiving some form of protection. These changes have largely taken place in the USA and other developed countries. But as other countries wish to compete in the new biotechnological markets, they are likely to change their national laws in order to protect and encourage investment in biotechnology. It is conceivable that the law of copyright could afford some protection for biotechnology. In this paper, the status of pharmaceutical biotechnology in India and the IPR law has been discussed.

Key words: IPR, Pharmaceutical Biotechnology, Patent


INTRODUCTION The word biotechnology was actually coined early in the 20th century by an agricultural engineer from Hungary, named Karl Ereky. The first official broad definition given by the US Office of Technology Assessment which states that biotechnology, broadly defined, includes any technique that uses living organisms (or parts of organisms) to make or modify products, to improve plants or animals, or to develop micro-organisms for specific uses is also considered now void [1]. In the broadest sense, the term biotechnology encompasses techniques applied to living organisms and parts thereof to produce, identify or design substances or to modify organisms for specific applications. Thus there may be many definitions of biotechnology as it is highly multidisciplinary involving almost all areas of science or to say, biotechnology combines disciplines like genetics, molecular biology, biochemistry, embryology and cell biology, which are in turn linked to practical disciplines like chemical engineering, information technology, and robotics. The field of medicine has reached a new high after the introduction of Biotechnology in this field. Normal medicines has the capability to cure the symptoms of various diseases, but biotechnological process in combination with pharmacology have the capability to develop proteins and molecules which helps in providing a permanent cure for the disease. Microorganisms are used to produce insulin, human growth factors, blood clotting factors, fertility drugs, antibiotics, vaccines and enzymes which can be used to permanently cure human diseases [2]. Gene therapy can be used in curing genetic diseases which involves replacing defective genes which may or may not be transmitted to the next generation. Diseases like AIDS, Cancer, sickle cells Diseases like AIDS, cancer, sickle cell anemia, hemophilia, cystic fibrosis, diabetes and many more can be detected and treated with the advanced technologies provided by Biotechnology. Pharmaceutical Biotechnology The field of pharmaceutical biotechnology is developing rapidly. For those working in the field of pharmacy and pharmaceutical sciences, completely new and novel techniques and product appear at a rapid pace [3]. This is the result of interplay between a numbers of different disciplines, among those must be mentioned: Molecular biology, molecular genetics, (bio) engineering, chemistry and pharmaceutical sciences [4]. The total worldwide sales of biotechnology produced pharmaceuticals continue to increase fast. For instance, in 1990, US sales amounted to approximately $ 2.0 billion. Sales increased to $ 5.1 billion in 1994 and $ 7.7 billion in 1995. It reaches 16 $ billion in 2002 [5]. The ownership and exploitation of intellectual property rights are the key factors in determining the success of any technological innovation introduced in the market that provide the means for technological progress to continue, to be made and thereby support the competitiveness of industry of the country. IPRs make it possible to develop strategies for dissemination and transfer of technologies in such a way, which may provide maximum societal benefits. It is a well known fact that a countrys economic and social success is utmost when different members of society have a common understanding, clear division of labour and responsibility with a common understanding for the shared societal values. The efficient management of IPRs is thus crucial in providing the right incentives for continuing technological innovations. The IPRs are thus helpful for new business opportunities and for value adding knowledgebased industry. It is high time that India rapidly adapts to the challenges posed by a continuously evolving technological environment of the world [6]. Yet, the principle does not easily apply in the real world. Communication, exchange and use of new knowledge is regulated by regimes of intellectual property protection including patents, copyrights, trademarks, and trade secrets. How societies will actually be affected by and benefit from the emerging information-based economy depends, among other things, on how these regimes govern the creation and distribution of innovation, and the extent to which they grant access to or impose exclusion from new knowledge. The general trend in the last decades has been to strengthen intellectual property rights (IPR) and make them globally enforceable. Patent protection has become available for animate matter (genes, micro-organisms, plants, plant material, and even animals) and computer algorithms. The agreement on Trade-Related Aspects in Intellectual Property Rights (TRIPS) obliges all member states of the World Trade Organization (WTO) to include the protection of plant-related innovations and pharmaceuticals in their domestic law. In the European Union, data bases are now protected by new sui generis property rights. The pharmaceutical industry has been recently in flux for allegedly placing the sanctity of patents above that of life. At such a time it is important to see that role of industry is for drug discovery and development and the IPR on medicines is the foundation on which the drug research is based [7]. Vaccines and immunobiologicals and pharmaceutical products make a vital contribution to healthcare system. The modern drugs have contributed to increased life expectancy. The key role for the pharmaceutical industry is to discover, develop, produce and market innovative products. In view of the substantial investment and time involved to bring a drug to the market, the companies seek adequate returns on their investment. Intellectual properties are the lifeline of the research based pharmaceutical industry. They enshrine the right of companies to have a chance of recovering their investment and to have a return of capital sufficient to ensure shareholders interest. The period of market exclusivity provided by effective patent protection system is essential

*Corresponding author.
S. Usha Assistant Professor School of Social Science and Languages,VIT University Vellore 632 014,Tamilnadu,India Tel.: + 91-9952686522 Journal E-mail:suan_1980@yahoo.co.in

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for the companies to sustain the vast and risky research and development investment necessary to provide new drugs and medicines and other profile actives without the patent system. Without the effective system the majority of medicines would practically perish. Patents have attracted much of the attention for gap between rich and poor countries in access to medicine. This has exaggerated the issue of patents in developing countries, resulting in as much as 95 per cent of the WHO listed essential drugs being available off-patent. These represent a wide range of drugs to respond to most common diseases in developing countries [8]. However, specialised drugs like that for HIV/AIDS, drug resistant tuberculosis, etc. are not accessible to the poor people. Here the ethical and moral issues in the patent system play more important role where the patent system should be applied for more societal benefits. A particular economic incentive to substantiate corporate involvement in modern biotechnology has been the granting of the patents for recombinant organisms and engineered cell lines. With the advent of rDNA technology there has been a major reinterpretation of patenting laws all over the world, so that these days living organisms and their parts and processes, including the cells and genes of humans can be patented [9]. The Biotech Companies in India have witnessed a huge growth over the past few ears and this positive growth prospect is expected to remain in the future. The economic development and the liberalization policies are the main causes behind such great progress of the Biotech companies [10]. Today, there are around 325 companies in India which produce specialized products and services in various sectors of bio technology. According to the recent surveys, the leading biotech companies contribute around 27 % of the total revenue of the sector [11]. With the liberalization in the Indian economy, a number of foreign biotech companies are also entering the Indian market to cater to the needs of the target audience. Some of the well known biotech companies that have set up bases are: Biocon: Biocon is one of the premier biotech and healthcare companies in the country. It provides specialized services in the biopharmaceutical value chain market. The main objective of the company is to offer high class health care products in the fields of diabetes, cancer, inflammatory ailments and so on. A number of medical therapies are also offered at affordable rates. It is considered to be one of the best biotech companies in India. Nicholas Piramal India Limited: A renowned name in the fields of biotech medicines and research, Nicholas Piramal India Limited has made itself a big brand name by providing great services. It ranks as fourth in the Indian healthcare market and offers a number of services like medicines, therapies and lots more. The company has also successfully launched itself in the markets of Europe, North America and Asia. Dr Reddys Laboratories: It ranks among the premier biotech companies in the Indian market and has also successfully launched into the American and European markets. The company is known for offering specialized facilities in the field of healthcare and therapeutic medicines. It also provides research facilities in areas like inflammation, metabolic disorders, and infective diseases and so on. In addition to these, there are other biotech companies in India which offer specialized facilities and services in a number of fields. They are listed in Table 1. Table 1. List of important pharmaceutical companies in India
Name of the Company Shantha Biotechnics Bharat Biotech Ltd Serum Institute Bhat Biotech Panacea Biotech Hindustan Antibiotics Ltd Indian Immunologicals National Diary Development Board Anand Ranbaxy Laboratories Span Diagnostics Dabur India Cadila Pharma Zydus Cadila Place Hyderabad Hyderabad Pune Bangalore Punjab Pune Hyderabad New Delhi Surat UP Ahmedabad Ahmedabad

Biotech industry is one of the fastest growing knowledge-based industries in India. It also has got the potential to play a pivotal role in the rapid economic development of the country [12]. Due to numerous advantages that the country has such as skills, knowledge, research & development (R&D) facilities, and cost effectiveness, a number of top biotech companies have started their operations in this country. With comparative advantages and the presence of some top companies in the market, India has got the potential to come out as one of the key players in the global biotech sector. Currently it holds 2% of the global market share. The top 10 biotech companies in India play an important role in the development of the biotech industry in the country. Biotechnology Industry in India There are a number of biotech companies in India. In 2008-09, the Indian biotech industry had a total turnover of US$ 2.51 billion comparing to US$ 2.13 billion during 2007-08. The biotechnology sector is among the fast growing knowledge based sectors in India. In recent times, India is emerging a hub for biotechnology industry and one of the important sector receiving outsourced jobs from abroad [13]. The Indian biotech sector stands 4th in terms of volume and 13th in terms of value. The Indian biotechnology industry is progressing at a rapid growth rate of nearly 40 per cent, with an annual turnover of US$ 1.07 billion in 2005 and a recorded growth of 36.55 per cent. It has been estimated that the sector has the potential to grow to the tune of US$ 4270 million by the year, with a revenue generating capacity of US$ 5 billion and an employment creation of 1 million jobs by the year 2010. Advantage for India India has a promising potential to be a global player in the arena of Biotechnology owing to a large pool of skilled and cost competitive manpower, well developed and integrated scientific infrastructure, and being globally recognized as a producer of low cost, high quality bulk drugs and formulations. Biotech firms are mainly concentrated in western and southern India. In the western India, these firms are clustered in Mumbai-Pune Industrial Region and Ahmedabad-Vadodara Industrial Belt. In south, these firms are clustered in and around Bangalore, Hyderabad and Chennai. Region wise revenue generated by the firms and their percentage share in total has been given in the T able 2. Table 2. Status of India in PCT application (Data obtained based on Shukla, 2005)
S. No Country Number of PCT applications in 2002 44,609 15,269 15,531 6274 4877 4019 2988 2552 2469 2210 480

1 2 3 4 5 6 7 8 9 10 11

USA Germany Japan UK France The Netherlands Sweden Republic of Korea Switzerland and Liechtenstein Canada India

Indias emerging pharmaceutical industry has appeared as the world leader in the fabrication of standard generic drugs, ever since the Patent Act 1970 permitted India to seriously approach and contributes in the pharmaceutical market worldwide. India is the preferred nation for pharmaceutical generation, with low charges for research and development as well as production of drugs. And the pharmaceutical companies in India have made full use of the favorable environment offered by the country to make it big [14]. The workforce and technological proficiency of pharmaceutical companies in India ensures the growth of the industry on a global scale as well as within India. The sector is predicted to value about $3.1 billion (USD). The Government Policies in Patenting The Ministry of Science and Technology has issued the guidelines Instructions for Technology Transfer and Intellectual Property Rights, which would help in enhancing the motivation of scientists, research institutions and uni-

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Table 3. Top ten pharmaceutical companies in India along with their 2007 turnover
S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Company Ranbaxy laboratories Dr. Reddys laboratories Cipla Sun Pharmaceuticals Lupin labs Aurobindo Pharma GlaxoSmithKlineg Cadila Healthcare Aventis Pharma Ipca laboratories Turnover in 2007 (Rs.) 41.989 billion 41.622 billion 37.637 billion 24.624 billion 22.155 billion 20.801 billion 17.734 billion 16.13 billion 9.838 billion 9.804 billion

Court of India in M/s. Bishwanath Prasad Radhey Shyam vs M/s. Hindusthan Metal Industries as under, which is self explanatory. The object of patent law is to encourage scientific research, new technology, and industrial progress. Grant of exclusive privilege to own, use or sell the method or the product patented for a limited period, stimulates new inventions of commercial utility. The price of the grant of the monopoly is the disclosure of the invention at the Patent Office, which after the expiry of the fixed period of the monopoly, passes into the public domain [15]. Patent Amendment Act 2005 India being a developing country is required to introduce product patent of medicines and drugs from 1st January 2005. To implement the TRIPS obligation, the parliament has amended the Patent Act 1970 by the Patents Amendment Act, 2005 w.e.f. 1 st January 2005. Apart from reintroducing the product patent of medicine and drugs which was permitted before 1970, the 2005 Amendment has effected number of changes in Patents Act 1970. The notable changes are (i) change in the definition of inventive steps, new invention, and pharmaceuticals. (ii)Introduction of requirement to communicate the adverse report of examiner, and the gist of objection etc. to the applicant by the controller. (iii)Substitution of granted in place of granted and sealed in case of patents, (iv) Substitution of new sections 25 and 26 relating to opposition to the patent and (v) Introduction of provision to grant compulsory license for export of patented pharmaceutical products in certain exceptional circumstances [15]. Legal procedures of Obtaining a Patent in the US and India The law firm representing India in the dispute, Sagar and Suri, criticized the procedures for granting patents in the US claiming it is diametrically opposite to the one followed in India and Europe. According to them, India first examines a patent application, then widely publishes it for third parties to challenge, and only then grants the patent. However, the US keeps the patent application a closely guarded secret and grants it without allowing other parties to challenge it. After the patent has been granted, third parties are then allowed to petition against the patent as India is currently doing in the Basmati case. This criticism clearly illustrates the shortfalls in the patent process in the US that ultimately needs to be revised to prevent future cases like this from occurring. Given the systemic failures that have been identified in the national biopharmaceutical innovation systems in the national case studies and the need for an integrated innovation policy approach that includes first, second and third generation policies, recommendations have been formulated that address: Coherent and consistent innovation policies: combine objectives such as improving international competitiveness through innovation policies towards pharmaceutical biotechnology on the one hand, and a high-quality and affordable public health caresystem on the other hand. Public governance: facilitate a more active role of patients and/or their organizations in innovation processes, clinical trials and market access; potentially important sources of innovation remain untapped. Promote co-operation and networking: create network linkages throughout the biopharmaceutical innovation system, especially between actors in science and the business system. Support for an innovative industry: develop instruments that provide incentives for private financers to invest in biopharmaceutical firms. Regulatory framework : develop transparent and stable regulations with short application procedures and good information on procedures and the development of an adequate system for protecting biopharmaceutical innovations. Technology transfer: stimulate the exploitation of public sector biopharma ceutical research, include IPR indicators in review and evaluation procedures, establish qualified supportive infrastructure for start-ups (legal, business, marketing expertise, incubator and technical facilities). Stimulate sound science systems: the persistence of market imperfections associated with basic research requires a role for government research policies and research funding. The patenting activities in India abysmally low compared to those in developed countries like the US, Germany, Japan, etc. Although India has large resources, and private sectors are growing well and lots of pharmaceutical companies are increasing year to year, still then, there are a less number of patents we have when compare with other developed countries. Hence, it is mandatory to examine whether the law in India or intellectual property rights

Table 4. Top ten Biotechnological companies in India along with their 2008-09 turnover (US$ million)
S. No. 1 2 3 4 5 6 7 8 9 10 Company Name Year of Establishment 1966 1978 1984 1973 1973 1990 1993 1996 1983 1994 Segment Turn over

Serum Institute of India Biocon Ltd Panacea Biotec Rasi Seeds Nuziveedu seeds Novo Nordisk India Shantha Biotech Bharat Biotech Indian Immunologicals Ltd Syngene International

Bio-pharma Bio-phorma/ Bio-industry Bio-pharma Bio-agri Bio-agri Bio-pharma Bio-pharma Bio-pharma Bio-pharma Bio-Services

245.08 200.71 131.37 82.63 80.07 72.60 54.34 51.51 50.92 49.41

versities in various research and developent projects funded by various departments of the Ministry of Science and Technology [15]. The salient feathres of these guidelines are as follows: a) Ownership of Intellectual Property: The institution shall be encouraged to seek protection of IPR rights in respect of the results of R&D. They may retain the ownership of such IPRs. Institutions would mean any technical, scientific or academic establishment where the research is carried through funding by Central/State Governments. b) Transfer of Technology: The institutions would take necessary steps to commercially exploit patents on exclusive or non-exclusive basis. c) Royalty to inventors: The owner institutions are permitted to retain the benefits and earnings generated out of the IPR. The institution may determine the share of inventors and other associated persons from such earnings. However, such shares shall be limited to one third of the actual earnings. d) Norms for the private industry: IPR generated through joint research by institution(s) and industrial concern(s) through joint research efforts can be owned jointly by them on mutually agreed terms through a written agreement. The institution and industrial concern may transfer the technology to a third party for commercialisation on exclusive or non-exclusive basis. The third party, exclusively licensed to market the innovations in India, must manufacture the product in India. The joint owners may share the benefits and earnings arising out of commercial exploitation of the IPR. The institution may determine the share of the inventor(s) and other persons from such actual earnings. Such share(s) shall not exceed one third of the actual earnings. e) Patent Facilitating Fund: The owner institution(s) shall set apart no less than 25 per cent of the revenues generated from IPR to Biotechnology and IPR Regime 16 Asian Biotechnology and Development Review create a patent facilitating fund. The fund shall be utilised by the owner for updating the invention(s), filing new patents and protecting the IPR against infringement and for building competency in the area of IPR and related issues. f) Information: The institution(s) shall submit information relating to the details of the patents obtained, the benefit and earnings arising out of the IPR and the turn over of the products periodically to the Department/Ministry, which has provided the funds. g) March in rights: The government shall have a royalty-free licence for the use of IPR for the purposes of the Government of India. Law Relating to Patents in India In India, the national legal regime pertaining to patent is contained in the Patent Act, 1970 as amended by the patents Amendment Act, 1999. This legislation has been enacted to amend and consolidate the law relating to patents. The object of the patent law has been summed up by the Supreme

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can protect our biological resources or do we need to revise Indian law that can improve the system. The detailed investigations on this aspect can solve the above question. CONCLUSION Regulation of pharmaceuticals derives from intrinsic product characteristics, in particular, significant but uncertain risks and benefits to health, rather than to structural features of the industry, such as natural monopoly [16]. Information about a drugs risks and benefits in humans can only be obtained from careful study in large numbers of patients with appropriate controls for patient characteristics and co-morbidities. There is a strong argument that structuring and interpreting such data analysis is a public good that is best delivered by an expert regulatory agency [17]. The existence of regulatory systems to perform these functions and control market access in all industrialized and most developing countries is strong evidence for consensus opinion on this basic proposition. However, the regulatory details of what information to gather, whether relative to placebo or current treatment, from pre-launch or post-launch sources, and under what conditions to make a drug available to the public, raise questions of effects of different regulatory regimes and optimal regulatory structure. Economic analysis has shed considerable light on these issues, but many fundamental questions remain. Moreover, since the 83 fundamental problem is imperfect information, the optimal regulatory structure may change over time, as technologies for data gathering and analysis change and consumers willingness to bear risk and demand for information change with technology, income and other actors. In summary, although there is a large and growing literature on regulation of the pharmaceutical industry that has produced valuable information and useful lessons learned, large and important issues remain for future research. Models of regulation in other industries are either not relevant or require significant adaptation and extension, in order to fit this industrys peculiar characteristics in particular, high rates of R&D and technical change, with life-or-death effects, patents, insurance, and physicians, consumers, payers and pharmacists as potential customers [18]. This industry remains a fertile area for future research. ACKNOWLEDGEMENT The authors are thankful to VIT Management for their support and encouragements. REFERENCES
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Source of support: Nil, Conflict of interest: None Declared

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