In healthcare, we can at best play catch-up with China

Dan Vasella, the chief executive of Swiss firm Novartis, which has been struggling for the last five years to secure the patent rights in India on Glivec, its therapy for a rare form of blood cancer called chronic myeloid leukemia, has spoken again on the alleged gaps in the Indian patent system.

In the interview to an Indian business daily, Vasella expressed disappointment over the slow movement of the Indian political system and the complexities of the decision making process as compared with China.

Vasella’s views on the Indian patent system may be contested as the Glivec case has gone through several rounds of litigations and finally landed in the Supreme Court, but his statements about the decision-making process in India do have a touch of truth.

Dan Vasella is one of the most well-known pharma chiefs and while many changes were effected in key positions in other pharma companies in the last year or so, the man who at one time rode Harley Davidson to work maintained his rank as the chairman and chief executive. He has perhaps dealt with many governments and understands, through his many years in the job, where to put his company’s money.

Novartis recently committed an investment of over a billion dollars in China for discovery research programmes and also identified that country as one of its key markets. The company grew at over 25% in China in 2008 and that gives enough traction for further investment over at least a 10-year horizon.

By making these moves, Vasella clearly favours China over India, though he has always been endeared by the potential in India. In making these investments, Dan Vasella may not have linked up with the efficiency of the Chinese patent system but appreciates with some “surprise” that “China has made tremendous progress in IP and is enforcing IP in pharmaceuticals.”

Vasella may not be alone in being partially inclined to China. Roche, Eli Lilly, Pfizer, Sanofi Aventis, GSK have all said that China is faster in implementing policies and more emphatic about reinforcing its healthcare systems. And so, most companies have set up research labs there or are willing to do more, while India has remained a good option to partner and be at an arm’s length.

Remember, China is in the middle of implementing a huge $125 billion health reformation plan, which aims to reach out to far-flung corners of the country while providing comprehensive medical insurance to a large part of the population. An industry official rightly remarked that corruption may be ingrained in the Chinese government system, but unlike in India, where corruption breeds red tape, work gets done in that country.

To compare India with China now may be inconsequential, though it feels good to be seen shoulder-to-shoulder with a fast-developing economy. Any industry official who has been to Shanghai or any of the industry zones in China knows how absurd it is to make a match with India but, may be, there is still some hope left.

Minister after minister has promised the Indian pharmaceutical industry an ideal system to encourage investments. They coax foreign visitors to infuse money in India, but do not for once realise how difficult the procedures are, or how ill-interested the officials.

Over the last decade or so, the Indian government has not budged an inch on critical policy issues like drug-price controls; there is no clarity on how data exclusivity issues will pan out; how well the regulations can gear up on early stage clinical trials for newly discovered programmes; what records can be shared on biological drugs in India; or how smooth the systems are to handle the scourge of fake or spurious drugs.

Many of these important issues have been held up in the parliament inconclusively,
reflecting the indifference that our representatives have for the subject. Health is one of the least important priorities for India and records prove the point.

Everyone knows that multinational companies need to put a foot in India to grow their sales, but that may not be the best way to attract attention or money. Newspaper reports now suggest that top Pfizer officials are visiting India soon. It will be proper for the concerned government departments to pitch for investments in India, but before doing that, they must ensure that something more than mere verbal promises is on offer.