International Seminar on Accelerating Growth of IPR in Global Village Indian Pharma Patents :

1. International Seminar on Accelerating Growth of IPR in Global Village Indian Pharma Patents : The Status & Importance of Generics Drugs ByPadmin BuchB. Pharm, MBA, CMC Chief ConsultantGITCO LTD, AhmedabadFebruary 15 , 2009

2. GITCO Patent Assistance Cell • GITCO is a multi-disciplinary consultancy organization • Promoted by ICICI Bank, IDBI, State Govt. Corporations & Nationalized Banks • Offers Project, Management, Financial, Industrial & Technical Consultancy Services • Patent Assistance Cell is one of them

3. GITCO Patent Assistance Cell • Patent Awareness • Patent Counseling • Patent Drafting • Patent Filing • 37 Patents filed so far • Initiated by Government of Gujarat

4. Cash Subsidy By State Government • 50% (Maximum Rs. 5 Lakhs) against the expenses incurred by any organization, Institute, Individual or Industrial unit for obtaining patent registration. • This assistance will be given only once per product/process per institution/individual. • A pioneering initiative

5. PATENTS - NEW & OLD Before 2005 : Now What can be patented A new process of making : New product (drug) discovered an existing drug after January 1, 1995 For how long? Between 5 and 7 years : For 20 Years Applies to Process patents existed : Pharma and agri-chemicals exclusively for Pharma and finally come under product agri-chemicals patent In case of Patent Violation Patent owner had to prove : Onus of providing non- that the patent had been violation of patent lies with violated the accused

6. IPR : What Impact ?A Quick/Prima- Facie View • Product Patent : Reverse Engineering not possible • Introduction of new products curtailed • Increased competition in off patent products • Likely-hood of monopoly/oligopoly • Transfer of technology, technology upgradation & upscaling required. • Need to be competitive……..

7. The necessity is to be competitive….. • Do we have the competitive advantage?

8. Drugs and Pharmaceutical Industry Quick Overview

9. Indian Drugs and Pharmaceutical Industry - An Overview • Size of around US $ 6.5 Billion • Projected CAGR @ 13.6% • Exports estimated at @ 40% of turnover • Formulations @ 78%; Bulk Drugs @ 22% • Growth of Export : 22%, Domestic Market 8% to 10% • Also Highly fragmented Industry ◄◄◄ • Gujarat occupies a Prominent Position @ 42% plus share

10. Indian Drugs and Pharmaceutical Industry :An Overview(Contd…) • India - 4th largest globally : Volume terms • However, ranked 13th : Value terms • One of the most Price Sensitive market in World • Lower Price Realization • Ranbaxy’s Turnover : US $ 450 millions • Sale of Viagra (Pfizer) : US $ 411 millions in first 3 months

11. Indian Pharma : Overview Strengths: • Highly developed industry • High Intellectual Capital • India a huge market: • 1.1 billion potential local patients • Pro-active approach by several companies • Low cost of drug development and clinical trials • Strong Bio diversity • Implementation of Product Patent act : Modified Provisions

12. Zone/ Cluster Region Product Focus I Western India (Mumbai - Gujarat Axis) Bulk Drugs, Formulation & Merchant Exports II Northern India -do- III Southern India (Chennai-Hyderabad Axis) Primarily Bulk Drugs, Some Formulations Where Gujarat Pharma Stands...India has three distinct Pharma Clusters (Zones) of manufacturing bases. • Gujarat is primarily a formulation zone

13. Generic Drugs :Status & Importance in The IPR Regime

14. Generic Drugs • After expiry of Patents others can also manufacture that drug. • This is known a ‘Generic’ drug • Generic drugs are cheaper than patented counterpart • Are supposed to be just as effective.

15. Importance of Generic Drugs • For long World Pharma dominated by Patented Block buster drugs • In last few years, however, patents of many of these block busters have expired/are to expire • Growth Rate: • Industry: 6-7%; • Generics Market : 11%

16. The Global Generics Market Reaches to $78bn Global*: Generic Sales & Growth % (US$)

17. The 8 Key Markets Hold 80% of the Total Generic Market Global Generics Geographic Breakdown (US$)

18. Generic World: Patent Expiry of Major Drugs

19. Key Factors For Growth Of Generics • Price sensitivity : Both in Developed and Developing country. • Developing countries (e.g. India) not favouring patent extension • R&D Production of “Big Pharma” is declining • The growth in number of drugs in the research pipeline is deceptive. • Most of the drugs are in the early phase of discovery process and so chances of failure are high. • The number of drugs in the advanced phase remains virtually unchanged in spite of substantial increase in R&D budgets.

20. Pharma Development Pipeline Almost Unchanged & Less

21. The Generic Impact: Revenue Squeeze • Drug after expiry of Patent faces dramatic price reduction. • Example: Prozac (generic name: Fluoxetine) of M/s. Eli Lilly. • Prices: • Prior to expiry (Mid 2001):US $2.80 Billion annual sales • Ranked 10th • After expiry : US $ 1.7 Billion, Rank 89th • By 2005 : US $ 250 million, 181st rank • Reason: Flooding of market with cheap Generics.

22. Launching Generics Version of Own-branded Drugs by Big Pharma – Illustration: • Merck launched generic version of Fosamax (Osteoporosis drug), Patent expired in February 2008 • Pfizer has set up an in-house division for such generics • Between 2005-2007 a third of Patent expired block busters were re launched in authorized generic version • The number expected to be 44% between 2008 and 2010. Source: FE, dt.29-01-2008

23. Generic Drugs : The Indian Advantage

24. The Patents (Amendment) Act 2005& TRIPS Key Provisions & Issues (Relevant to Generic Pharma) : Status & Implications

25. Key Provisions / Issues & implications: Scope of Patentability • Defines what is Patentable • Only New Entity can be patented • Has to be Substantially different • Difficult to seek Patent Extension on the basis of moderate improvements

26. Scope of Patentability… Implications • Opportunity for early entry of Generics in India Market • Would benefit Generic Players • Also prevent Evergreening

27. Key Provisions, Issues & its ImpactOpposition to the Grant of Patents • Pre- grant opposition restored • Most patent applications, especially with incremental modifications are likely to be keenly contested • Benefit to Indian Generic Manufacturers and consumers • On Flip side : delay for even genuine applications

28. Generic Drugs : The Indian Position • India’s patent Act provides flexibility. • The generic (drugs) industry could be major beneficiary because of this. • India has a creditable base of Genericdrugs industry. • India is the biggest supplier of cheaper versions of essential drugs. • Has a share of 25% in the World Generics market

29. Generic Drugs : The Indian Position (Contd.) • India’s Generic Drugs: Also of International quality. • Therapeutic segments of Cancer, AIDS, Hyper-tension and Antibiotics. • CIPLA’s first line AIDS medicine : a classic example • CIPLA price : US $100 per patient per year against the MNC tag of $ 10,349 • India: The main source of cheap and quality-medicines to the developing countries.

30. Generics in India :Challenges to Opportunity • The increased demand of Generics (cheaper and effective) is to shift the balance in World Pharma Market • “Pharmerging” countries (Brazil, China, India, Indonesia, Mexico, Russia and Turkey) • Expected to have 20% share by 2020 : a 60% increase • Generics will drive the growth rate of developing countries and in turn the global pharma sales. • India surely would lead this drive

31. To adopt to the new Patent Regime, new business models would be in focus • Generics • Contract Research & Manufacturing • Co-marketing Alliances • Herbal products ? • Backed up by Technical and Legal Expertise

32. THANK YOU….…Questions R Welcome ….Padmin Buch GITCO LimitedGITCO HOUSEOpp: Sardar Patel StadiumNavrangpuraAhmedabad-380009Ph. No. (079) 26565333; 26569617; 26564618Fax : 079-26565279E-mail : gitcoltd@eth.net