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INTERNATIONAL SYMPOSIUM ON GLOBAL PERSPECTIVE ON PHARMA & BIOTECH PATENTS

AN OVERVIEW OF PHARMA AND BIOTECH INDUSTRY AND KEY IPR ISSUES

By

PADMIN BUCHB. Pharm, MBA, CMC

Chief ConsultantGITCO LTD, Ahmedabad

April 19, 2007 Ahmedabad

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GITCO PATENT ASSISTANCE CELLGITCO 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

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GITCO PATENT ASSISTANCE CELLGITCO PATENT ASSISTANCE CELL

Patent AwarenessPatent CounselingPatent DraftingPatent Filing Twenty Seven Patents

filed so farInitiated by Government of

Gujarat

Patent AwarenessPatent CounselingPatent DraftingPatent Filing Twenty Seven Patents

filed so farInitiated by Government of

Gujarat

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Cash Subsidy By State GovernmentCash 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

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Pharma Industry : The Churn FactorsPharma Industry : The Churn Factors

The Product Patent New MRP based Excise VAT Revised Schedule-M Unequal Taxation in

states Price Control Dynamics of

International Market

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Indian Drugs and Pharmaceutical Indian Drugs and Pharmaceutical Industry - An OverviewIndustry - An Overview

Size :US$ 5.7billion(2005-06)(ASSOCHAM) Formulations @ 78%; Bulk Drugs @ 22% CAGR of 9.7 over last 5 years Growth of Export : 22%, Domestic Market 8% to

10% Exports estimated at US $ 3.5 Billions

Also Highly fragmented Industry ◄◄◄ Gujarat occupies a Prominent Position @ 40%

plus share

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Where Gujarat Pharma StandsWhere Gujarat Pharma StandsIndia has three distinct Pharma Clusters India has three distinct Pharma Clusters (Zones) of manufacturing bases.(Zones) of manufacturing bases.

Primarily Bulk Drugs, Some Formulations

Southern India (Chennai-Hyderabad Axis)

III

-do-Northern IndiaII

Bulk Drugs, Formulation & Merchant Exports

Western India (Mumbai - Gujarat Axis)

I

Product FocusRegionZone/ Cluster

Gujarat is primarily a formulation zoneGujarat is primarily a formulation zone

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INDIAN PHARMA : OVERVIEWINDIAN PHARMA : OVERVIEWStrengths:

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

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Outsourcing : Contract Research and Manufacturing

R&D - Different strategies for SMEs Herbal Products Contract Manufacturing Bio-technology Generic Products Patent free segments of North American &

Europe Many others - for a proactive industry Low cost - high quality manufacturing hub

OpportunitiesOpportunities

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BIOTECH SCENARIOBIOTECH SCENARIO(Courtesy:Biotechnology in Gujarat;Status Paper by GSBTM & (Courtesy:Biotechnology in Gujarat;Status Paper by GSBTM &

www.vibrantgujarat.com)www.vibrantgujarat.com)

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BIOTECH SCENARIOBIOTECH SCENARIO

Acknowledged as an economy leveler and a tool for socio-economic developmentNew Diagnostic toolsPrevention based healthcarePersonalised medical treatmentGenetic testing & medicines

Great contribution in Food & Agri sector Also environment friendly, energy efficient Driven by Innovation,Research & Enterprise

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GLOBAL SCENARIOGLOBAL SCENARIO

The Global Biotechnology market : $63 billion (2004-2005)

Compound annual growth rate @ 18% Market dominated by the United States The industry is rapidly maturing and is closer

to profitability The agriculture and food segment also

contributed significantly

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INDIAN SCENARIOINDIAN SCENARIO

Indian Biotechnology Industry growing @ 36.5 % Around 280 Companies and revenue of over USD

1.1 billion (2004-05) Western region contributes 49.60% Emerging vaccine hub: Vaccines constitute the

largest segment of the Indian Biopharma Industry India a competitive outsourcing destination for

high-end laboratory and diagnostic testing 200 Biotech Companies employed 25,000

scientists in R &DTotal manpower in Biopharma segment is

11,80040 National Research Institutes involving

15,000 scientists

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GUJARAT SCENARIOGUJARAT SCENARIO

Evolved from convergence of successful industries

Spin off / dedicated units of large diversified companies(Intas,Zydus,Bayer,Cadila Pharma,Alembic,Maps,Span,Concorde,etc.)

Dominated by health-care companies Product mix include:

BiopharmaceuticalsDiagnostic kits/equipmentsAnimal health-care productsPreventive medicines

Significant presence in agri-biotech Sector Has leading CROs : Quintiles, Lambda, Synchron,

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GUJARAT SCENARIOGUJARAT SCENARIO

40 biotech companies & 66 support organisations

Average annual turnover of the industry to the tune of Rs. 500-600 Crores

Investment worth Rs.200 crores between 2003-2007

Proactive role of the State Government(Dept.of Science & Technology and GSBTM)

Interphase among Industry,Academia,Research Organisations & Government

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Business Case: Biotech in GujaratBusiness Case: Biotech in Gujarat

Source: www.vibrantgujarat.comSource: www.vibrantgujarat.com

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The Patents (Amendment) Act 2005The Patents (Amendment) Act 2005(Indian Patent Act)(Indian Patent Act)

Key Provisions Relevant to

Pharma &

Implications

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Patent Act : Key ProvisionsPatent Act : Key Provisionsand implications : and implications :

Patentability CriteriaPatentability Criteria

Only Really New entity can be patented Difficult to seek Patent Extension on

the basis of moderate improvements Opportunity for early entry of Generics

in India Market Would benefit Generic Players

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Patent Act : Key Provisions & its ImpactPatent Act : Key Provisions & its Impact

Pre-Grant Opposition 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

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Impact Analysis : Immediate Impact Analysis : Immediate ImpactImpact

“Drugs based on Post-1995 molecules already being manufactured and sold in domestic market can continue … ……….. On payment of a reasonable royalty to the patent holder.

Such liability would accrue prospectively after granting Patent in India”

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Immediate ImpactImmediate Impact

Almost no existing products (launched before 2005 in India) in the market would have to be withdrawn.

Lack of clarity on “Reasonable Royalty”

Estimates : 2-4% of revenue from the product.

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Patent Litigations ThreatPatent Litigations ThreatMany Small Companies not aware of IP

issues

May face Litigations in future

Patent Litigations are very costly

Essential to perform Patent Analysis/

Mapping for newer drugs

Also while acquiring a company : IPR

Valuation

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In-Licensing OpportunityIn-Licensing Opportunity

Right given by Patent holderFor marketing and distribution of

Patented Drugs In return of Royalty or Profit sharing In-licensing to accelerate in next 3-4

yearsOpportunity for companies with strong

domestic presenceAlso for niche players with strength in

specific therapeutic segments

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Contract Manufacturing OpportunityContract Manufacturing Opportunity

Outsourcing (Formulations and Bulk Drugs) Market : US $ 40 billions

Estimated @ $ 900 millions in 2010 Contract Manufacturing in Domestic Market :

Rs.10,000 crores Opportunity for Pro-active Small and Medium

Units Plant set-up to be of standards required by

Market / Regulatory Agencies Higher Investment and Professional

Management Approach/Attitude

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To adopt to the new Patent Regime, new business models would be in focus

a) Contract Research b) Contract Manufacturingc) Co-marketing Alliances

Herbal products ?

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India can Do ItIndia can Do It

For India, possibilities are endless Large educational infrastructure

Over 200 UniversitiesOver 1500 Research InstitutesOver 400 PhDs a year8000 Pharma Graduates from 500 colleges

IPR laws and mechanism being strengthened Curriculum of Institutions being revised Knowledge is India’s Intellectual Property Required : business like approach from all Signs are Positive : India will do it

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India and Gujarat have the potential to emerge as the Major R&D and Contract Manufacturing Hub…...

… It surely will happen

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THANK YOUTHANK YOU Padmin Buch . . .Padmin Buch . . .

GITCO LimitedGITCO LimitedGITCO HOUSEGITCO HOUSEOpp: Sardar Patel StadiumOpp: Sardar Patel StadiumNavrangpuraNavrangpuraAhmedabad-380009Ahmedabad-380009Ph. No. (079) 26565333; 26569617; 26564618Ph. No. (079) 26565333; 26569617; 26564618Fax : 079-26565279Fax : 079-26565279E-mail : gitcoltd@eth.netE-mail : gitcoltd@eth.net