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Love molecules, pharma wars

Why is Pfizer reluctant to manufacture Viagra in India?

Till a few years ago, when the familiar old man returned to the colony to spread his wares on the pavement, mothers veered daughters away to the other side of the road saying, Beti ghar chalo, nahin to ginseng aa jaayega (Girl, return home, else ginseng will materialise).

No more, says Uday Mor or Mor Medical Hall, Hyderabad. "I get nearly ten enquiries a day and at least two of them are from mothers, daughters, even mothers-in-law, calling to find if Viagra has arrived in the shop. It is amazing."

The first big event in the "rejuvenators" market happened in 1990 when Jeetendra appeared with his white pants on television, looking 50 and advertising for 30-Plus -- Revive Your Energy. This brought ginseng -- in reality a Korean root -- from the pavement to the shop.

Viagra is the next big event. It has made the euphemism superfluous and brought aphrodisiac to the normally uppity middle-class housewife.

According to another medical hall owner, earlier, the conversation would go something like this:

"Saab, kuch taaqat ki goli do na."

"Kya chahiye?"

"Aap samajhte, na. Din bhar kaam kar ke thak gaya hoon. Ab kuch chahiye gharwali ke liye."

("Sir, give me some pills for energy."

"What do you want?"

"You understand, don't you? I get tired working through the day. I now need something for the sake of my better half.")

Now it goes:

"Can I speak to the proprietor please?

"Yes?"

"Do you have Viagra?"

"No Ma'am."

"Do you know where I can find it?"

"No Ma'am. It has not been allowed by the Indian government yet." (Pause) "I see. Thank you. I'll call later."

Indeed, it looks like Viagra-hunters will have to wait for a while. Manufacturer Pfizer recently indicated that it would not introduce Viagra in the Indian market till the Indian Patents Act was amended in line with the World Trade Organisation guidelines. That is, till India changes over from the process patent to the product patent system.

Strictly speaking, Pfizer's entry is not really important for the Indian market. According to Alluri Srinivasa Rao, executive vice-president of Natco Pharma, "About 22 Indian companies already have the process for making the Viagra molecule - Sildenafil citrate. And that includes us."

At least two of them are confirmed to have sought clearance for making the drug for the Indian market -- Cipla and Dr Reddy's Labs. Dr Anji Reddy, chairman of Reddy's Labs, says: "I'm sure everybody has applied. Sildenafil citrate is not difficult to make."

And while clearances have not been given for selling the formulation locally, Cipla is already believed to have got permission to make the drug in bulk for exports.

That is one of Pfizer's main problems: all its patent protections in the world make no difference to Indian manufacturers, Indian law or the market.

This is because, currently, India recognises only process patents in the drugs and pharmaceuticals sector -- many people can make the same drug but with different processes. It is not the drug but the process that is protected from copying. Which is why the Indian pharma sector is riddled with industrial espionage, price-cutting and complete transparency of the wrong kind. An involuntary indecent exposure, so to say. Once any one company has a new product, everyone is bound to get it sooner or later.

Part of the problem arises from the process of applying for patents. Patent appliers have to provide all the data on their drug to the Drug Controller before they can be cleared for marketing. This includes the structure of the chemical, its testing methods, efficacy information and safety data. Once the data gets there, the product is open to everyone. And in the absence of a product patent, it is also open for anyone to make.

For a long time, Indian manufacturers re-engineered multinational drugs. That is, they analysed the product and found their own way to make it. Or, they scrounged on each other.

Things changed drastically in 1995, when Natco Pharma became a little enterprising and started filtering data from the US Federal Drug Authority's office. So when Glaxo released its breakthrough migraine drug Sumatriplon in the US, within three months Natco had released it in India. Says Rao, "It was perfectly legal. And suddenly, the difference in launch time between the US and India had been reduced from a few years to a few months."

But to make a drug, a lot more is required than just a knowledge of the molecule structure: methods of testing the drug, the safety data and its standardisation in terms of how it is to be filled, etc. By itself, this could take a company 7 to 12 years. The Drug Controller of India hasn't been very stringent on safety data, taking the view that if the US FDA has found it safe, it will be safe here too.

Sometimes, this theory can go wrong. For instance, some deaths were reported when cardiac patients took Sumatriplon. It was withdrawn by Glaxo and re-labelled with the proper contra-indications. Rao says Natco already knew about the contra-indications, had labelled it properly, and no such deaths were reported in India.

Which is why Pfizer is wary of filing a patent in India. Everyone already has the molecule structure. Pfizer's application will only give them all the other data for free.

Related to product patent is another problem peculiar to the Indian market: extremely low prices. Given the nature of its laws, despite little original research, India has all the 100 top molecules in the world, 95 per cent of all drugs made and the cheapest medicines. Discounting the spurious drug trade, it is a rosy picture for the Indian consumer. But the worst kind of news for multinational drug companies.

For instance, there is an anti-emetic for chemotherapy patients called Zofran. It costs $ 12 in the US (between Rs 500 to Rs 600 depending on the prevailing exchange rates). In India, however, it is available for, think again, Rs 4!

Similar costings have been done for Viagra. At US$ 10, it should cost between Rs 420 to Rs 500. "If it were made in India," says Srinivas Rao, "it would cost as low as Rs 30." Dr Anji Reddy goes a step further: "I think it should cost about Rs 15 or so for a 50 mg tablet."

In addition, OTC (over the counter) drugs have a large grey market. You don't need prescriptions to buy them and they can be taken overseas on the pretext of personal use. This can start a spate of reverse exports that would skew Pfizer's pricing policy very badly.

India also exports to many South American nations who have not yet signed the WTO agreement. Pfizer will have to fight the price battle there too.

For the moment, however, Indian authorities seem to be taking the view that more safety data is needed before they allow any Indian company to sell the formulation locally. That may be justified because a few Viagra-related deaths have been reported in cardiac patients in the US. Instead, the BJP government is offering Pfizer a five-year Exclusive Marketing Right. India has committed to change over to the product patent system by 2005 and the government's argument is that by the time the EMR expires, the new system will be in place.

However, Dr Simon Campbell, till recently the senior vice-president of medical discovery at Pfizer, has indicated that they would be happy with noting less than a 15-year EMR guarantee. The reasoning has not been disclosed.

There is a ray of light, though, for multinational drug companies. All such conflicts will end in 2005. India will become a product patent country and all drugs will be automatically protected. At least legally.

Ironically, however, just when the Indian pharma industry seems to be preparing for 2005 -- companies like Ranbaxy, Dr Reddy's Labs, Sun and Torrent are investing heavily in research and Ajay Piramal is on a buying spree -- there are others who are having second thoughts. If product patents come simultaneously with private insurance, health-care will suddenly become very expensive in India.

After all, Pfizer could hardly sell Viagra for $1 in India and $10 in the US. There will have to be some price parity. Either India moves to $10 or the price meets at $5 everywhere. In any case, re-engineering is out, scrounging is out and cheap medicine is out.

Kind courtesy: Sunday magazine

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