On Wednesday January 25, 2012, Forest City Science + Technology Group hosted the seminar “Doing Life Science Business in India” at the Illinois Science + Technology Park in Skokie, IL.
Presenters included: Dinesh Jain, CEO of Aagami, Inc., a life sciences consultancy; Dr. D’vorah Graeser, CEO of intellectual property firm Graeser Associates International, Inc.; Dr. Terry LaRocca of the IL Dept. of Commerce, and Ms. Debra Rogers of the U.S. Dept. of Commerce. Mr. Michael Rosen of Forest City Science served as moderator.
To commence the discussion on India, moderator Michael Rosen enumerated salient macro-economic and demographic information and spoke about the pharmaceutical market and key issues facing the country. The pharma market in India is projected to grow to $20 billion in 2015, up from $6 billion in 2005. Also by 2015 200 million people are expected to under heath insurance coverage, and 140 million will rise above the poverty level.
From his research, Mr. Rosen said that generic drugs dominate the Indian pharma market; only 10% of drugs have patent protection, although ‘branded generics’ from U.S. pharmaceutical companies enjoy a solid reputation. Chicago-based Abbott Laboratories is the largest pharma manufacturer in India in terms of market share.
According to the IMF, said Dinesh Jain, India is the third largest economy in the world in terms of purchasing power parity (PPP). There is a sizable number of relatively affluent people, roughly 120 million, that can afford what most Americans can. This is the market, Mr. Jain asserted, that life sciences firms should be looking at. That 120 million figure is larger, he points out, than any of the individual nations in the European Union.
India excels in science, technology and business, according to Mr. Jain, but suffers from poor infrastructure. It has the third largest pharma market in the world, and India’s top 20 pharma companies have a presence in North America, Japan and the EU.
As a life sciences consultant Dinesh Jain shared that, from foreign companies, Indian businesses are seeking partnerships with, or acquisitions of, firms in regulated markets, new drug delivery systems, compounds and technologies, manufacturing arrangements, and co-development opportunities, an area he has substantial experience in.
Understanding business culture in India is still a challenge, Mr. Jain points out, since there are relatively few books and reports on the subject, as compared to Japan. In his remarks both during his presentation and the roundtable discussion, he stressed the trust-based nature of Indian business relationships. It is simply not possible in India to do a million dollars in business and not know a person face to face, as it is the West.
The relationship quality of Indian business highlights a strength, Mr. Jain emphasizes. Because Indian firms want to do right by their clients, a contractor, for example, will put the time and effort into doing an effective job, even if does not specialize in a given area.
In a conversation with me after the seminar, he also pointed out that Indian firms also want to prove their capability, in terms of India’s recent entry into the global economic arena. I mentioned that I had been in India over 20 years ago as a youth volunteer, and he repeated a point he made during the seminar, that the country is undergoing massive and rapid change. I have heard that same observation from a number of people over the last ten years.
Regarding intellectual property in India, it’s as the saying goes – there’s good news and there’s bad news. D’vorah Graeser presented on the strengths of Indian law and potential pitfalls of patent applications.
Dr. Graeser pointed out that India and the United States, both being former British colonies, have a legal system based on English common law. The legal system is strong by international standards, albeit slow from an American viewpoint. And, Indian law does recognize all major forms of intellectual property, such as patents, trademarks, copyrights and trade secrets.
However, here’s the bad news. At present there is a whopping backlog at the Indian patent office of roughly 80,000 patent applications. The application process takes 5 to 7 years, and an applicant must file for an examination within 48 months of the earliest priority date, i.e. the date used to establish the novelty of a particular invention. Dr. Graeser’s advice: file early.
Dr. Graeser also described the “right to health” orientation in the Indian legal system. Whereas U.S. law views a healthcare patent as property issue, the Indian Supreme Court on the other had is highly concerned with access to health care. In addition, the Patents Act of 2005 in India finally established the right to patent a pharmaceutical, but does not extend patents to a new form of a known drug, such as salts, ethers or esters.
The case of Swiss pharma company Novartis has been before the Supreme Court since 2009, and is still unresolved. Novartis sued the Indian government over the patent application refused for Gleevic, a salt form of Imatinib.
Dr. Terry LaRocca is the trade specialist for Asia Pacific/India with the Illinois Department of Commerce. In his opening remarks he stated that, “it’s all about jobs,” and added that “exports and foreign direct investment” create jobs in Illinois. For exports, Illinois is the #1 state in the Midwest, and fifth in the nation for foreign direct investment. India is now the 15th largest export market for Illinois products.
The bulk of his office’s work, on the Web at http://www.ildceo.net/dceo/Bureaus/Trade/, is for small to medium companies seeking overseas business opportunities. During the roundtable portion of the event, Dr. LaRocca warned that “if you’re not willing to go there,” that is, travel to India to develop business, “you’re not going to be successful.”
Ms. Debra Rogers, trade specialist with the U.S. Dept. of Commerce, shared that the U.S. Commercial Service has 225 offices around the globe, with seven in India, employing a “feet on the street” approach to promote American exports. Her office provides free export counseling, as well as customized paid services for U.S. firms. Their website www.export.gov offers a number of resources to prospective exporters.
Ms. Rogers reiterated Terry LaRocca’s emphasis on jobs creation. In the 2010 State of the Union speech, President Obama announced the National Export Initiative (NEI), meant to double American exports over five years. Incidentally, the president mentioned NEI this week during the 2012 State of the Union.
Ms. Rogers also underscored her department’s success with the “Gold Key” program, which is a customized match-making service to find business partners in the country of interest.
For information on upcoming events, visit the Illinois Science + Technology Park website. Next month: “Doing Life Sciences Business in Brazil,” February 22.