Updated on 17 May 2012
Given the situation, Datamonitor expects significant industry consolidation, providing a good opportunity for MNCs to make acquisitions and expand their business in China, says Mr Ling Sun of Datamonitor Healthcare, China.
Intellectual Property Protection is another major issue in the emerging markets, such as India, China and Thailand. Mr Ling Sun says though the situation is improving, it is still troublesome for the MNCs. "Traditionally, MNCs have only launched off-patent drugs in China rather than going ahead with their branded products due to concerns over intellectual property protection. However, MNCs have begun to launch innovative drugs in China along with their launch in major global markets to try and gain first-to-market advantage," he says, adding that it makes robustness of intellectual property protection in China a key issue.
Although the situation regarding intellectual property rights has improved since China joined the World Trade Organization in 2001, the State Intellectual Property Office still does not provide patent extensions, and the updated 2008 patent law provides an infringement exemption for generic drug makers (meaning local generics manufacturers could begin manufacturing, though not selling generics before patent expiry of a product). "There are also indications that the data exclusivity provisions are not implemented in practice, although they are required by law (King & Wood, 2012). Compulsory licensing, counterfeiting and drug piracy also remain significant concerns for branded pharmaceutical companies in China," says Mr Ling Sun.
Most of the Asian high-tech start-ups with cutting edge technology need to build IP portfolios and the ownership of this portfolio plays a crucial role in increasing market value of the company. "Companies such as HistoIndex, which enter into research collaborations need to make great effort to own any foreground IP in a manner that is fair and equitable. That, at times, is a challenge by itself," adds Dr Noel Moore, chief executive officer, HistoIndex, a Singapore-based company.
Commenting on the recent decision of the Controller General of Patents of India and the Indian government to bust the monopoly of Bayer's anti-cancer drug Nexavar through compulsory licensing of Bayer's patent, Mr Rahul Dev of Tech Corp Legal LLP, says, "It has opened the field for the generic industry to follow suit and could well pave the way for availability of cheaper drugs for lifestyle diseases. In the near future, more generic companies could invoke the compulsory licensing clause of the Indian Patents Act. The landmark judgment by the Indian Patent Office is now being seen as a test case and it is almost certain that Bayer will go to court on this issue."
He says this will force MNCs that are keen on investing in the emerging markets to think twice about where to invest in the region.