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Novartis revives an Indian experiment in China |
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By
R.N.Bhaskar
------------------------------- Could
it be a “do-unto-China-what-was-once-done-to-India”? <>In the first week of November, 2006, most observers of the pharmaceutical sector were pleasantly surprised at an announcement by Novartis, the fourth-largest pharmaceutical company in the world: that it would be investing around US$100 million in China. Surprisingly, this investment would not be for selling drugs and medical products – it is what most pharmaceutical companies do – but to set up a new research facility in Shanghai. Prima facie, it does not make sense. Why should any pharmaceutical company set up a research unit in a country where the legal underpinnings for protecting Intellectual Property Rights (IPRs) are weak? Wasn’t that the reason why Cisco had a spat with Chinese companies? And there are several articles on how China does not respect the IPR regime promoted by most developed countries in the world. <>After all, pharmaceutical companies work with molecules that could lead to a cure of some ailment or the other. They are extremely possessive about their IPRs and believe that this is the only way they can recover huge amounts of money that they invest in research and development. So why should Novartis be keen on investing huge amounts of money in China which almost everyone acknowledges to be weak on the IPR front?According to
Novartis, it hopes that its new facility in Shanghai will eventually
become one
of its three big research hubs, alongside Cambridge, Massachusetts, and
Basel
(Switzerland) — and ahead of its other facilities in Vienna, London, La
Jolla,
New Jersey, Tokyo and Singapore. Adds,
John Gilardi, Head Corporate Public
Relations, Novartis International AG, in an email communication to this
columnist, “the new Shanghai R&D site will focus on finding new
medicines
to help patients in Asia with diseases common to the region, hence the
initial
focus on liver cancer caused by hepatitis. This is a unique project in
that the
site will be led by Chinese scientists working for people of China and
this
region.” But there are
sceptics who scoff at such claims. They
find Novartis’ moves a mere echo of those made by its erstwhile
predecessor,
Ciba-Geigy. It may be recalled that
Novartis is the new entity that was the result of a merger between
Ciba-Gerigy
and Sandoz in 1996. It may also be
recalled that Ciba-Geigy had a subsidiary in India, Hindustan
Ciba-Geigy (HCG),
which had applied to the government some 40 years ago to start a basic
research
division in this country to focus on digestive tract and amoebic and
tropical
diseases. That made HCG one
of the three companies in India that were engaged in basic research –
the
government owned National Chemical Laboratories (NCL), Amabalal
Sarabhai
Enterprises (ASE) and HCG. ASE was the
first to close down after the demise of the visionary founder of the
group. HCG, around 15 years ago,
informed the government of its decision to shut shop.
When interviewed
on its decision to close the basic research centre, the HCG management
confirmed the following: (i) basic research is far too expensive and the returns from the pharma business in India too meagre. Even though the division was started in India with the best of intentions, HCG believed that it did not warrant further continuation of this research facility. The extensive land property at Goregaon, Mumbai, India, was subsequently sold at a very attractive price to a private developer (the Apte group). <>(ii) the lack of IPR
protection
in India was not conducive
to conducting research and developing new molecules in India; and
<> <>(iii) All information of the molecules found in India had been sent to Ciba-Geigy's laboratories in Basel, Switzerland, for being used to discover new drugs. Sceptics believe
that HCG’s parent in Basel thus got all the information it could about
tropical
diseases and about the compounds that are used to curing them using
traditional
remedies (often prescribed by oriental schools of medicine like
ayurveda and
unani). Any royalties that the company
would get from patents would accrue only to the parent, and not to the
Indian
venture. Sadly, the government of India has still
not formulated a policy on such
practices. And these
sceptics believe that, notwithstanding the claims of
Ciba-Geigy’s new avataar Novartis, this story will now be
repeated in
India’s northern neighbour. Obviously, what
happens next in China will be watched very keenly by all in the
pharmaceutical
business. |
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