Outline.docx

Strengths: 1. Patent Act and Drug Price Control Order of the 1970s forced MNCs to shrink their operations in India. Patent Act Similar to Trademarks, copyright, design and geographical indications, Patent is also an Intellectual Property which is protected under the Law and the rightful owner of the Patent can claim rights and authorities under the Law for a limited period. In India, the Law of Patent is primarily governed by the Patent Act of 1970. What is Patent? The word “Patent” refers to a monopoly right over an invention. Not all inventions are patentable nor it is essential to protect inventions solely through patent. The final product that results from an invention may be protected through other forms of intellectual property rights[1]. The statutory definition of Patent under the Patent Act as a Patent for any invention granted under the Act[2]. Rights in a Patent Patent registrations confers on the rightful owner a right capable of protection under the Act i.e. the right to exclude others from using the invention for a limited period of time. The monopoly over patented right can be exercised by the owner for a period of 20 years after which it is open to exploitation by others. Patent confers the right to manufacture, use, offer for sale, sell or import the invention for the prescribed period. Time Period for which Patent is granted Initially, the Act provided for a shorter term pf protection for medicine or drug substances. However, vide the Amendment Act of 2005 uniform period of 20 years was provided for all the Patents. Thus, once the prescribed period of 20 years is over, then any person can exploit the patented invention. Here it would be relevant to mention that similar to a trademark even the term of a patent begins from the date of application of patent. Drug Price Control Order (DPCO) Drug Price Control Order (DPCO)was introduced in the 1960s to prevent undue profiteering from essential medicines. The MNCs were compelled to reduce their holdings to 40% in their Indian ventures. In the 1980s-1990s, domestic pharmaceutical companies flourished. As a result, the market share of MNCs fell to the current 35% down from 75% in 1971. Drug Price Control Orders (DPCO) are issued by the Government, in exercise of the powers conferred under section 3 of the Essential Commodities Act, 1955, for enabling the Government to declare a ceiling price for essential and life saving medicines (as per a prescribed formula) so as to ensure that these medicines are available at a reasonable price to the general public. The latest Drug Price Control Order (DPCO-2013) was issued on 15.05.2013.

Price controls are applicable to what is generally known as “Scheduled drugs” or “Scheduled formulations” that is, those medicines which are listed out in the Schedule I of Drug Price Control Order (DPCO), issued by the Government of India from time to time[1]. (It may be noted that the use of the word “Scheduled drugs” is a legacy of the DPCO-1995[2]. The latest DPCO 2013 only uses the word “Scheduled formulation” to refer to medicines in its first schedule since some of the bulk drugs when used as a single ingredient also act as a formulation. Since 2013, all essential medicines (as defined under National List of Essential Medicines) are treated as scheduled formulations (under DPCO-2013). However, it does not mean that all drugs brought under price control are essential medicines. As per Para 19 of the DPCO-2013, the Government may, in case of extra-ordinary circumstances and in public interest, fix the ceiling price or retail price of any drug, whether scheduled or non-scheduled or a new drug for such period, as it may deem fit. It also has powers to revise (either increase or decrease) the ceiling price or retail price of the drug which is already fixed and notified, irrespective of annual wholesale price index for that year (based on which companies are automatically permitted under DPCO to revise the prices annually)[6]. Price controls are applicable irrespective of whether it is generic or branded[7]. It provides space for indigenous pharmaceutical companies to expand in the local market. As a result, in the past two to three decades domestic pharmaceutical companies have established operations and are self-sufficient in all aspects. For example, Cipla Limited, one of the top global pharmaceutical companies in India, could provide the generic version of the AIDS triple cocktail to impoverished South African people at $350/patient/year or at a price that is one-thirtieth its cost in the United States. 

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"Bulk drug substance" means any substance that is represented for use, and that, when used in the compounding, manufacturing, processing, or packaging of a drug, becomes an active ingredient or a finished dosage form of the drug; however, "bulk drug substance" shall not include intermediates that are used in the synthesis of such substances. A bulk drug — also called active pharmaceutical ingredient (API) — is the chemical molecule in a pharmaceutical product (medicines we buy from the chemist) that lends the product the claimed therapeutic effect.

2. Most people in India, especially those who are educated and have advanced degrees, are fluent in English. The statistics presented by K-International (2017), in their online article entitled, “Which countries have the most English speakers?”, shows that India ranked second (with a number of 125 million English Speakers), following US with approximately 268M English Speakers. This aptitude allows them to communicate with most of the outside world, which is an important asset to the IPI. 3. India’s expenditure on health sector has risen From 1.2% of the GDP in 2013-2014, India’s expenditure on health sector was increased to 1.4% in 2017-2018, Health Minister, J.P. Nadda stated in his interview. (Aug 2018)

4. India produces a sufficient number of medical and pharmacy graduates Pharmaceutical Education in India: According to a study conducted by LJP Tharappel, a Senior Research Scientist and Assessment Officer from India, there are more than 1,500 institutions offering various pharmacy training program across the country with annual enrollment of around 100,000 students (2014). These students are trained and expected to enhance their skills in their universities, that will hugely contribute to the growth of the pharmaceutical sector. In a research article entitled, “Professional Outcome of medical graduates: a 17 year crosssectional study from India” conducted by Mishra, et.al(2000-2017) from International Journal of community Medicine and Public Health, it is stated that about 65,000 medical graduation seats are filed YEARLY through 470 colleges in India. 5. Collaboration between the computer and pharmaceutical industries In the contemporary world economy, India is the largest exporter of IT. Exports dominate the Indian IT industry and constitute about 79% of the industry’s total revenue. Banglore is considered to be the *Silicon Valley of India. The Indian computer industry is on par with its American counterpart, and many companies in the world depend upon Indian programmers to develop complex software. The use of computers in the pharmaceutical industry is increasing, and in particular they are being applied to data management and drug discovery programs (12). Thus, collaboration between the computer and pharmaceutical industries will help drug discovery and development programs prosper. 

Silicon Valley, in the southern San Francisco Bay Area of California, is home to many start-up and global technology companies. Facebook, Apple, and Google are among the most prominent

6. The pharmaceutical industry strives for innovation as it is a major business growth driver. Innovation in this industry could lead to high monetary benefits. The Government of India and the IPI have both shown growing focus to boost innovation. The country has well developed chemistry, R & D and manufacturing infrastructure with proven track record in advanced chemistry capabilities, design of high tech manufacturing facilities. Multiple initiatives by the Government to boost innovation and protect intellectual property rights and increasing R&D spend by the corporate segment highlight this. 7. Highly educated people, huge labor force, and well-developed education system Any pharmaceutical industry needs employees from the fields of organic chemistry, biochemistry, pharmacology, pharmacokinetics, pharmaceutical science, analytical chemistry, and so forth. With a very well-developed and diverse education system, India produces students who can meet these requirements. Availability of Labor: India has a huge labor force (nearly 500 million people), which includes unskilled workers as well as rich talent pool of skilled workers, such as researchers and engineers, capable of lending cost-effective research and development support to manufacturing operations.

8. Low labor cost Cheap Labor: Manufacturing labor is very cheap in India, even compared to China. In 2014, the average cost of manufacturing labor per hour was $0.92 in India and $3.52 in China. Low labor cost makes Indian products one of the cheapest in the world. 9. High Quality Production Most Indian factories produce high quality goods because they use high quality (Japanese) equipment and tools and they take pride in their work. Many Indian factories are family-run and well-known for care and transparency of their work and business dealings. Unlike China, India does not carry the stigma of poor quality production.