India is front and center stage these days - the world is keeping a close eye on developments in India, on the economic front and also on the political front (as it relates to the economy). Last month, The Economist had a cover story feature about India's overheating economy, and now Businessweek is following that up with its own cover feature on India titled The Trouble with India. The article calls attention to one major drawback - inadequate infrastructure, including crumbling roads, jammed airports, and power blackouts. There is of course plenty of bureaucracy and red tape - getting things done is not easy. It cites examples of investments lost to China, Vietnam and other emerging countries. And add to all of that - corruption siphoning away large chunks of government budgetary allocations before they reach their intended goals.
A cover story like that is certainly unwanted publicity for the Indian economy .... but a reality check against the sugar coated stories of India Shining. The fact however remains that the Indian economy continues its march - the Indian Economy Blog has an excellent summary on whether the economy is sizzling or just right ...
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Wednesday, March 14, 2007
Tuesday, March 13, 2007
The power of expat money
India received $23.4B (yes billion!!) in remittances last year, the single largest player now - and the amount has more than doubled in the last five years.
Some staggering statistics:
No wonder the RBI is having fits trying to curb inflation ...
Some staggering statistics:
- Remittances account for 3% of India's GDP
- Remittances are more than both FDI ($4.7B in 2005-06) and FII ($12.5B in 2005-06) combined!!
- Source of all this money - about 111million migrants from India worldwide! (and to think that we still have more than 1 billion people still left over in India ...)
- Fate of these dollars: about 54% spent on family, 20% in bank accounts and about 13% invested in land and property
No wonder the RBI is having fits trying to curb inflation ...
Wednesday, February 28, 2007
Novartis v/s the Government of India
[Originally posted at Transport Phenomena]
In my freshman year in college, i had a course on "Perspectives in Society, Science and Technology". It was essentially an introduction to the social and ethical ramifications related to the technology as I started on getting a Chemical Engineering education. It dealt with situations such as pollution, plastics, DDT, cleaner pesticides, Rachel Carson's Silent Spring, severe mercury poisoning of Minamata Bay in Japan, the Bhopal disaster, and last, but not the least, the far reaching implications of the Indian Patent Act of 1970. The law had far reaching consequences for the Indian pharmaceutical industry. According to the law:
In other words, this act prevented issuance of product patents in India for pharmaceuticals and drugs, while only processes to make drugs could be patented. This led to the development of India's formidable generics industry, which could reverse engineer manufacturing processes with remarkable efficiency, without having to spend billions to discover the drugs - today, this industry is led by Dr. Reddy's Laboratories, Ranbaxy and Cipla.
While the act ensured that pharma industry in India was sheltered from the fierce competition from big pharma worldwide, India's entry to the WTO has changed all that. The WTO entry has resulted in the adoption of a new Indian Patent Act in 2005 - one which was supposed to spur the generics driven pharma sector from reverse engineering to innovation. While the rise in prices of new drugs was anticipated, it turns out that the new patent act seems to be very carefully designed to take into account the socio-economic situation in india and tries to enforce a lot of protections for the common individual to prevent big bad pharma from coming in and exploiting him. Kudos to the Indian government for ensuring this. I was not aware of this ...
In the aftermath of the new patent act has risen another controversy. Currently in the eye of this storm is the situation with Novartis' drug Glivec, which was denied a patent by the Indian Patent Office. The reason given was that the law does not allow patents for marginally modified drugs, which do not constitute a novel molecule or original invention. In response, Novartis has challenged the ruling and filed litigation against the Govt of India saying that some of the provisions of the new patent act be scrapped, because they violate WTO rules. Indian generic manufacturers are already selling generic versions of the drug at 10% of the price that Novartis was charging for Glivec.
Novartis has certainly stirred up a major situation, given how much the indian generics have managed to impact the availability of low cost drugs in third world economies. In fact - Indian generics companies supply 84% of the AIDS drugs that Doctors without Borders uses to treat 60,000 patients in more than 30 countries. Given this situation, its going to be very interesting (and important) to see how the judgement comes out in this case. The New England Journal of MEdicine has a very good 'Perspective' article on this - its a very good 'plain English' discussion on the situation. This issue has drawn a lot of attention in the pharmaceutical industry and among lawmakers around the world. US Congressman Henry Waxman wrote to the Novartis CEO Dr. Daniel Vasella saying “I do not dispute your right to apply for a patent or appeal a denial. I am concerned, however, that your attempt to influence domestic Indian law could have a severe impact on worldwide access to medicines.” He concluded his letter by urging Vasella, “to reconsider your position in this case.” He highlights the critical role played by the Indian generics industry in providing low cost drugs to the entire developing world, and making health care more affordable to a large number of people.
The case brings to the forefront an important issue - the role of governments in trying to protect the interests of their people seemingly in conflict with their role in driving innovation and development through the protection of intellectual property. Another fact highlighted is the strategy tried by large corporations to ensure that they reach their profit goals even at any cost, irrespective of the consequences. While I have clearly come across as a socialist in this matter, I don't quite disagree with Novartis' right to get appeal their patent denial or even the claim from pharma cos. that IPR protection is needed to spur innovation and improvements in treatments. I am actually quite supportive of the position that Waxman has taken about Novartis' challenge to the Indian law itself. I would however be quite keen to know how folks feel about this issue in general - esp Indians working in the pharma industry in the US.
The progress of the Novartis vs the Govt of India case will be closely watched all over the world, and the outcome will certainly have far reaching consequences on the future availability of low cost pharmaceuticals. I bet this will certainly be discussed in the "Perspectives in Society, Science and Technology" course for several years to come.
In my freshman year in college, i had a course on "Perspectives in Society, Science and Technology". It was essentially an introduction to the social and ethical ramifications related to the technology as I started on getting a Chemical Engineering education. It dealt with situations such as pollution, plastics, DDT, cleaner pesticides, Rachel Carson's Silent Spring, severe mercury poisoning of Minamata Bay in Japan, the Bhopal disaster, and last, but not the least, the far reaching implications of the Indian Patent Act of 1970. The law had far reaching consequences for the Indian pharmaceutical industry. According to the law:
In the case of inventions-
(a) claiming substances intended for use, or capable of being used, as food or as medicine or drug, or
(b) relating to substances prepared or produced by chemical processes (including alloys, optical glass, semi-conductors and inter-metallic compounds),
no patent shall be granted in respect of claims for the substances themselves, but claims for the methods or processes of manufacture shall be patentable
In other words, this act prevented issuance of product patents in India for pharmaceuticals and drugs, while only processes to make drugs could be patented. This led to the development of India's formidable generics industry, which could reverse engineer manufacturing processes with remarkable efficiency, without having to spend billions to discover the drugs - today, this industry is led by Dr. Reddy's Laboratories, Ranbaxy and Cipla.
While the act ensured that pharma industry in India was sheltered from the fierce competition from big pharma worldwide, India's entry to the WTO has changed all that. The WTO entry has resulted in the adoption of a new Indian Patent Act in 2005 - one which was supposed to spur the generics driven pharma sector from reverse engineering to innovation. While the rise in prices of new drugs was anticipated, it turns out that the new patent act seems to be very carefully designed to take into account the socio-economic situation in india and tries to enforce a lot of protections for the common individual to prevent big bad pharma from coming in and exploiting him. Kudos to the Indian government for ensuring this. I was not aware of this ...
In the aftermath of the new patent act has risen another controversy. Currently in the eye of this storm is the situation with Novartis' drug Glivec, which was denied a patent by the Indian Patent Office. The reason given was that the law does not allow patents for marginally modified drugs, which do not constitute a novel molecule or original invention. In response, Novartis has challenged the ruling and filed litigation against the Govt of India saying that some of the provisions of the new patent act be scrapped, because they violate WTO rules. Indian generic manufacturers are already selling generic versions of the drug at 10% of the price that Novartis was charging for Glivec.
Novartis has certainly stirred up a major situation, given how much the indian generics have managed to impact the availability of low cost drugs in third world economies. In fact - Indian generics companies supply 84% of the AIDS drugs that Doctors without Borders uses to treat 60,000 patients in more than 30 countries. Given this situation, its going to be very interesting (and important) to see how the judgement comes out in this case. The New England Journal of MEdicine has a very good 'Perspective' article on this - its a very good 'plain English' discussion on the situation. This issue has drawn a lot of attention in the pharmaceutical industry and among lawmakers around the world. US Congressman Henry Waxman wrote to the Novartis CEO Dr. Daniel Vasella saying “I do not dispute your right to apply for a patent or appeal a denial. I am concerned, however, that your attempt to influence domestic Indian law could have a severe impact on worldwide access to medicines.” He concluded his letter by urging Vasella, “to reconsider your position in this case.” He highlights the critical role played by the Indian generics industry in providing low cost drugs to the entire developing world, and making health care more affordable to a large number of people.
The case brings to the forefront an important issue - the role of governments in trying to protect the interests of their people seemingly in conflict with their role in driving innovation and development through the protection of intellectual property. Another fact highlighted is the strategy tried by large corporations to ensure that they reach their profit goals even at any cost, irrespective of the consequences. While I have clearly come across as a socialist in this matter, I don't quite disagree with Novartis' right to get appeal their patent denial or even the claim from pharma cos. that IPR protection is needed to spur innovation and improvements in treatments. I am actually quite supportive of the position that Waxman has taken about Novartis' challenge to the Indian law itself. I would however be quite keen to know how folks feel about this issue in general - esp Indians working in the pharma industry in the US.
The progress of the Novartis vs the Govt of India case will be closely watched all over the world, and the outcome will certainly have far reaching consequences on the future availability of low cost pharmaceuticals. I bet this will certainly be discussed in the "Perspectives in Society, Science and Technology" course for several years to come.
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