So the main activity of the company in the country would be to introduce products from the parent pipeline.mIn the domestic market, the share of Indian companies has steadily increased from around 20 per cent in 1970 to 70 percent now. Ranbaxy Laboratories is the market leader in terms of revenues followed by Cipla and Dr Reddys Laboratories. Glaxo is the only multinational to figure among the top ten pharma companies in India. In India, 97 per cent of drugs are off patent and are manufactured by a vast number of companies. The key therapeutic segments include anti-infectives, cardio vascular and central nervous system drugs. Anti-infective comprise the largest therapeutic segment in India, accounting for about 26 per cent of the market.

Globally, pharmaceutical industry grew at a compounded annual growth rate of 9.1 per cent in the last 23 years to $491 billion propelled by a string of innovative blockbusters. Multinationals were reshaped by mergers and acquisitions as a way of fattening their research pipelines. This at best represents a short-term solution. With a slew of brand name drugs losing patent protection in the next few years and the pressure building for pharmaceuticals to cut price, these giants find themselves under immense strain to find new drugs and reduce price.

So, from the above discussion it’s very evident that before any proper IPR regime specially in the absence of “Product patent” in India it was not a judicious decision for the international Pharma companies to invest here in India. FDI cap was raised from 74% to 100% in 2001 only but we didn’t find any change in the pattern of FDI in Pharma Sector.

Impact after 2005?

India a signatory to the WTO resolution on TRIPS Agreement India was thus committed to recognising product patents by amending The Indian Patents Act 1970. As per the minimum standards mentioned in the TRIPS agreement, patent shall be granted for any inventions, whether products or processes, in all fields of technology provided they are new, involve an inventive step and are capable of industrial application without any discrimination to the place of invention or to the fact that products are locally produced or imported. Accordingly, now patents will have to be granted in all areas including pharmaceuticals and the effective period of protection is for twenty years from the date of filing the application. With the implementation of TRIPS agreement by most of the developing countries by 2005, a stronger patent regime or product patents will be uniformly applicable on the pharmaceutical innovations among the member countries of the World Trade Organisation.

The implications of TRIPS for the pharmaceutical sector are that: patents will be granted both for products and processes for all the inventions in all fields of technology; the patent term will be twenty years from the date of the application (compared to the seven years under the 1970 Act), which is applicable to all the member countries and thus rules out all the differences in the protection terms prevailed in different countries; patents will be granted irrespective of the fact whether the drugs were produced locally or imported from another country; though the grant of the patent excludes unauthorized use, sale or manufacture of the patented item, yet there are clauses which provide manufacturing or other such rights of the patented item to a person other than the patent holder. In the case of a dispute on infringement the responsibility (to prove that a process other than the one used in the patented product has actually been used in the disputed product) lies with the accused rather than with the patent holder (in the 1970 Act, the responsibility is with the patent holder). This is the broad framework, which will guide the pharmaceutical industry of India in the WTO regime ( i.e. post 2005 period).