Data protection: Threat or an opportunity?
Written by Pharma Express Pulse   
Thursday, 28 October 2004


Data protection: Threat or an opportunity?

Image Intellectual property, if protected from misuse and abuse can vest enormous advantage to the Indian pride, says Harinder S Sikka

India is considered the intellectual capital of the world. Most developed nations owe their growth, advancement and research to the Indian scientists and technocrats. Our country once was the one point destination of all invaders. While some took away material wealth, others grabbed our ancient scriptures and Vedas. Germany and Japan even have universities teaching and researching Sanskrit. India yet could not be emptied thanks to its gene bank that, like a bottomless ocean, continues to churn hundreds of scholars, scientists and technocrats.

Like a Phoenix, India re-emerged on the world map with the IT revolution. Waiting in the wings, the pharma industry, too, is competitively poised to take the giant leap forward. It faces no challenge whatsoever from the MNCs. The real threat, if any, comes from within and from those who have thrived in living behind the protection walls and are unable to see beyond their nose.

Post process patent of the 70s, the pharma industry has come of age and is beginning to be feared by the developed world as much as its IT industry. It is already worth USD $seven billion, growing at 10 per cent every year. It is the fourth largest in terms of volume and thirteenth in value. Its exports have crossed US $two billion, increasing by over 35 per cent over the last five years. Rated amongst the world’s top five manufacturers of bulk drugs, the pharma companies today control 75 per cent of India’s market share against 35 per cent in the early 70s.

It is a great irony yet that instead of drawing strength from statistics, the protectionists within are shivering at the very thought of Data Protection. Competition, together with the might of Indian intellect has predominantly been India’s main stay. Being the originator of zero, algebra, trigonometry and calculus, our country has always thrived as an innovator. Shushruta was the world’s first plastic surgeon. Budhayoma calculated value of ‘‘Pi’’ in the sixth century. In the legendary Tansen, we had a musician who could mesmerise the soul with his music.

Intellectual property, if protected from misuse and abuse can vest enormous advantage to the Indian pride. IT did that successfully and in 25 years changed world’s perception of India from being a country of snake charmers to earning forty five thousand crores in foreign exchange. Its seven-lakh workforce is liable to touch US $15 billion in the coming years and accounts for over 1/5th of India’s total exports. It is the confidence given to MNCs through Data Protection that over 100 of the Fortune 500 companies have set up R&D centres in India.

Post-licence raj, our country is beginning to unleash the potential. The benefits accrued seem large; they are yet only a proverbial tip of the iceberg.

Moser-Baer, Noida, is world’s third largest optical media manufacturer and the lowest cost producer of CD recorders. It produces them so efficiently that European competitors had to file anti-dumping case against the company. Moser-Baer fought on its own and won.

Fifteen of world’s major automobile manufacturers are obtaining components from Indian firms, estimating to be around US $15 billion in the next five years.

We are the world’s largest manufacturer of motorcycles. Rover, UK, one of the most prestigious auto manufacturers in the world, are importing over one lakh Indian manufactured cars.

Easton Martin, one of world’s most expensive car brands, has contracted prototype of its latest luxury sports car to an Indian based designer.

Ford India accounts for over 35 per cent of its sale since it began outsourcing in the year 2000.

India’s main strength lies in its Intellectual Capital that spreads across the technologies spectrum. We are the third country in the world to possess Super Computers, besides USA and Japan. We are also among six countries in the world that launched satellites. Our Insat system is the largest domestic satellite system in the world.

Trade of Indian medicinal plants has crossed over Rs 4000 crore. ‘‘Data Protection would mean throwing our industry to the wolves,’’ say the protectionists. Quite the contrary, success in auto components, IT, biotechnology and pharmaceuticals show that our industry stands to gain enormously. There is no denying the fact that we are quick learners and gain more from alliances. It is the combination of the above that have made India sitting pretty with an all-time foreign exchange reserve of nearly US $120 billion.

Instead of standing in front of IMF with a begging bowl, India is today providing loans to nearly a dozen countries, prepaying debts as also providing soft loans to the IMF. Bereft of the facts of India’s successes owing to intellectual capital, we have a think tank which, when not whining is just wailing.

The Time Magazine in its cover story ‘Attack of the Gene Pirates’ dated November 6, 1998 and subsequent editions discussed how the Intellectual Property of countries like India faced serious threat. Dr John Barton of the Stanford Law University in his study commissioned by the UK Government summarised TRIPs and Patents as an act that served only the developed world and worked adversely for developing nations. However, it is also true that the Indian pharmaceutical industry adapted admirably to the tough laws and thrived in those very countries where data protection laws are in strict compliance.

By January 2005, over 80 per cent drugs would be off-patent which would allow cheaper generic versions to be manufactured by the Indian companies at will. However, if India has to stand up on its own feet and meet challenges of newer diseases that are cropping up, it needs to innovate as also protect its innovation. Due to lack of protection to the data, less than one per cent of companies are investing under two per cent of their total turnover in research. A new drug costs anywhere between Rs 500-1000 crore overseas. India could produce the same at under Rs 200 crore provided it can raise the level of trust among the researchers as we being one on par with rest of the world.

Providing five years data protection that mandatorily lapses within twenty years life of a product patent, Indian companies could stand to gain enormously in both production of patented drugs in India as well as in clinical research. MNCs, too, could save billions of dollars in contracting research to India and utilising the Indian intellect. Above all, it shall accord the all-important platform to the Indian scientists based overseas to return to the soil. Data Protection envisaged by the developed world could yet prove to be a blessing in disguise.

The writer is senior president, Corporate, Nicholas Piramal India Limited

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