Currently only a handful of pharmaceutical firms in India invest in R&D which needs to be improved. The Pharmaceutical Research and Development Committee (1999) has suggested that a mandatory collection and contribution of 1 per cent of MRP of all formulations sold within the country to a fund called pharmaceutical R&D support fund for attracting R&D towards high cost-low-return areas and be administered by the Drug Development Promotion Foundation. The domestic universities and other academic institutions can play the role of research boutiques or contract research organisations (CRO), which can supply the technical know-how and manpower. Units that already have such facilities can also function as a CRO for other firms.

In the post TRIPS era, the government will have to probe in to factors that contribute to the widening gap between the proposed FDI and the actual FDI and rectify these bottlenecks. Similarly the difference between the number of patents filed and the patents granted calls for a detailed analysis to figure out where the Indian firms are lacking.

Governments at various levels should take active part in disseminating knowledge about the IPRs and the possible strategies that can be adopted by the industry. This will remove some of the impediments. Lessons should be drawn from the Chinese experiences where systematic efforts were taken to educate the bureaucrats, policy makers and the industry about the WTO and product patents in the pharmaceutical industry. India will have to strengthen the patent examination process and speed up the processing procedures. This will help in checking the products that may enter the country utilising the import monopoly route provided by the EMR. Besides a strong institutional and judicial framework will have to be set up for monitoring the prices, to prevent infringement and trade dress cases of patented products respectively.

As far as India’s pharmaceutical industry is concerned, various options are possible in the WTO regime. These are to: (a) manufacture off patented generic drugs, (b) produce patented drugs under compulsory licensing or cross licensing, (c) invest in R&D to engage in new product development, (d) produce patented and other drugs on contract basis, (e) explore the possibilities of new drug delivery mechanisms and alternative use of existing drugs, and (f) collaborate with multinationals to engage in R&D, clinical trials, product development or marketing the patented product on a contract basis and so on. Besides these strategies, India’s strength lies in process development skills. This expertise utilised within the WTO framework with emphasis on quality standards will provide India a competitive advantage over other Asian countries.

To conclude we can anticipate more FDI nature of investment in India in the field of Pharma Sector?

It’s a question which requires more time to be answered, but we can draw inferences from the facts & data discussed above. As from the above discussion it is obvious that Pharma industry is high investment seeking industry, & the other most important fact about it is that it require enormous R&D. The new Patent regime brings both opportunities and challenges to the domestic pharma industry. Even larger Indian companies lack the financial muscle to be major international player in basic R&D, that involves discovery of new chemical entities (NCEs). They would be helped by the government's decision not to restrict patenting to NCEs. The Patent Ordinance issued recently defines the term patentability as per the TRIPS guidelines but does not exclude patenting of incremental inventions like new drug delivery systems, polymorphs etc, brightening the chances of Indian companies to benefit from the patent regime, but it may act as a disincentive for the international Pharma firms to invest in India.